U. S. targets Bodog founder, partners
Ex- Vancouver resident Calvin Ayre charged with money laundering
Internet gambling mogul Calvin Ayre, who taunted U. S. federal authorities from his luxury penthouse in Yaletown, has been indicted by a federal grand jury in Maryland for allegedly running an illegal sports gambling enterprise and conspiring to launder money.
Also indicted were three of Ayre’s associates who, until last year, operated out of a Bodog- related office at 333 Seymour St. in downtown Vancouver.
They are Vancouver chartered accountant James Philip ( also a director of Novagold Resources Inc.); former controller and head of e- commerce David Ferguson, who commuted to Vancouver from his home in Kelowna but is now believed to be living in London; and media buyer Derrick Maloney.
The indictment was filed a week ago and unsealed by the U. S. Attorney’s office in Baltimore on Tuesday. None of the four men has been arrested.
If any are currently on Canadian soil, they risk arrest and extradition by Canadian authorities.
U. S. federal prosecutors are alleging that, from at least June 2005 to January this year, the four defendants:
• Conducted an illegal gambling business involving online sports betting.
• Transferred at least $ 100 million from Bodog’s accounts located in Switzerland, England, Malta, Canada and elsewhere to pay winnings to gamblers in Maryland and elsewhere in the United States.
• Spent $ 42 million through an unnamed media company to advertise directly to gamblers based in the United States.
“Sports betting is illegal in Maryland, and federal law prohibits bookmakers from flouting that law simply because they are located outside the country,” U. S. Attorney Rod J. Rosenstein stated in a release.
In a concurrent action, the U. S. Department of Immigration and Customs Enforcement seized the Bodog. com domain.
What effect the seizure will have on Bodog’s business is not clear. Bodog. com had already been directing customers to a
I see this as abuse of the U. S. criminal justice system for the commercial gain of large U. S. corporations.
CALVIN AYRE
BODOG. COM FOUNDER
new site, Bovada. lv. And by all appearances, it’s business as usual for the Canadian website, Bodog. ca.
On his website, Calvinayre. com, Ayre lashed out at U. S. authorities: “I see this as abuse of the U. S. criminal justice system for the commercial gain of large U. S. corporations,” he stated.
“It is clear that the online gaming industry is legal under international law and in the case of these documents it is also clear that the rule of law was not allowed to slow down a rush to try to win the war of public opinion.”
Each of the four men face a maximum sentence of five years in prison for allegedly conducting an illegal gambling business, and 20 years for the alleged money- laundering conspiracy.
Prosecutors are also seeking forfeiture of any and all assets that the defendants derived from their allegedly illegal enterprise.
Ayre, now 50, was born in Lloydminster, Sask. He was the son of a pig farmer. In Grade 6, he moved with his parents to Salmon Arm, where he spent his formative years.
In 1987, he was implicated in a marijuana- trafficking ring. He was not charged, but his father and brother- in- law received lengthy jail terms. In 1996, he got into trouble with the B. C. Securities Commission and was suspended from the B. C. securities market for 20 years. That suspension is still in effect.
In 1996, he began developing online gambling software, initially through a private company and later through a company listed on the OTC Bulletin Board in the United States, where his suspension did not apply. That company eventually folded and the assets ended up in Ayre’s hands.
In 2002, Ayre re- emerged with Bodog ( named after a former pet dog). He set up his servers in Costa Rica and beamed into the United States. He split his time between a luxury compound in San Jose and a luxury penthouse in Yaletown. He fostered a playboy/ bad boy image and promoted his personal credo of “gamblin,’ drinkin’ and carryin’ on.”
Gamblers flocked to his site. By 2006, Bodog — much to the consternation of U. S. authorities — had become the largest online sports betting business in the world. Ayre was featured on the cover of Forbes magazine’s annual list of billionaires. Fittingly, the article was entitled “Catch me if you can.”
At that juncture, the U. S. Department of Justice began a series of high- profile arrests of gambling officials who dared to step on U. S soil.
Knowing he was a targeted man, Ayre moved his business from Costa Rica to the relatively safer jurisdiction of Antigua and stopped travelling to the United States.
He set up a customer call centre, Triple Crown Customer Service, in Burnaby. It covered 35,000 square feet and employed about 200 people. A sister company called Riptown Media ( later Fiver Media) occupied two floors at 333 Seymour St. and employed close to 250 people.
But Ayre still wasn’t safe. As the U. S. Justice Department turned up the heat, the possibility that Canadian authorities would arrest him at the behest of American authorities loomed larger.
In June 2009, after the U. S. Internal Revenue Service seized $ 24 million US from Bodog accounts at U. S. payment processors, Ayre shut down his Burnaby operation, scaled back his Vancouver office, and announced he had sold the business to the Morris Mohawk Gaming Group, which runs hundreds of gambling websites from the Kahnawake reserve near Montreal.
Ayre insists that he no longer operates the Bodog gambling site, and that his activities are limited to licensing the Bodog brand and technology, but many industry observers believe he is still in control.