IGC Says US Justice Department, Judge Stacked Deck Against Entrepreneur Jay Cohen Resulting in Unfair Conviction

VANCOUVER, CANADA (IGC & AnteUp) - Following a one-sided trial in which the defense was denied even minimum standards of fairness and due process, the United States Justice Department yesterday obtained a conviction of online entrepreneur Jay Cohen in U.S. district court for violating the 1961 Wire Act.

VANCOUVER, CANADA (IGC & AnteUp) - Following a one-sided trial in which the defense was denied even minimum standards of fairness and due process, the United States Justice Department yesterday obtained a conviction of online entrepreneur Jay Cohen in U.S. district court for violating the 1961 Wire Act.

Sue Schneider, the Chairman of the Interactive Gaming Council, stated: "We are disappointed that the Justice Department decided to pursue this case, even though Jay Cohen was operating a licensed and regulated gaming establishment and causing harm to no one. However, our disappointment is dwarfed by the Council's concern about the Orwellian tactics that the prosecutors used to obtain this conviction. Not only was Mr. Cohen precluded from offering a substantive defense, the judge in the case would not even let the jury have a complete or accurate copy of the Wire Act upon which to
base their decision. This type of 'convict now and find facts later' prosecution should be troubling for all members of the Internet community."

Schneider continued: "Cohen's defense was based upon a reasonable and literal reading of the criminal code, as well as the fact that he was licensed and supervised by gaming regulators in the sovereign nation of Antigua. However, Judge Griesa prevented any hint of such a defense from being presented to the jury. By putting Cohen in a legal straightjacket, the judge almost assured the prosecution of a conviction and denied him due process and other civil rights.. Nevertheless, even with such bias from the bench, it is clear that, the jury struggled with the fundamental question of Cohen's innocence, taking more than two full days to deliberate before reaching its conclusion."

During its deliberations, the jury asked for a copy of the Wire Act (18 U.S.C. sec. 1084) to determine whether Cohen's actions were indeed criminal. The judge sent to the jury a copy of the statute, but had the provision of section 1084, which contained a legal defense for Cohen, removed without any trace. Jurors were not even told that parts of the statute had been removed. Faced with an incomplete statute - one lacking the defenses approved by Congress - the jurors had no choice but to convict.

IGC Vice Chairman Albert Angel added: "This case should not be interpreted as a black mark on the interactive gaming industry as a whole. It is widely understood in the legal community that nearly four-decade old Wire Act does not apply to casino-style gaming conducted on the Internet."

While Cohen's conviction is extremely troubling, it is based on a law that applies strictly to sports wagering by telephone and in which there is no mention of the Internet at all. Had prosecutors attempted to indict licensed and regulated online casino operators (as opposed to Cohen and World Wide Sports Exchange), the outcome would have been far different.

"The IGC fully backs Mr. Cohen because we believe he is the victim of a biased prosecution and trial. We urge him to appeal this unfair outcome so that his case does not become a precedent for overzealous prosecutors in the future," said Angel.

U.S. Wins First Offshore Internet Gambling Case
Monday February 28
reprinted from Yahoo. Click here for full story.

NEW YORK (Reuters) - The U.S. government's efforts to stem illegal Internet betting activity outside of its borders got a boost on Monday when a federal jury for the first time convicted a man for running an offshore online sports gambling operation.

Jay Cohen, 33, a co-owner of World Sports Exchange based in Antigua, was convicted by a Manhattan federal jury for operating a sports betting business that illegally accepted bets and wagers on sporting events from Americans over the Internet and telephones.

He was the first of 22 defendants to stand trial in the government's initial prosecutions brought under the federal Wire Wager Act.

That law makes it a crime to use telephone lines in interstate or foreign commerce to place sports bets. It also outlaws the transmission of information that helps gamblers bet on sporting events and contests.

Prosecutors allege that the defendants have tried to skirt U.S. law by running their operations from jurisdictions that allow gambling, including Curacao, Panama, the Dominican Republic, Antigua and Costa Rica.

Cohen, who lives in San Francisco, faces a possible maximum prison term of five years on one count of conspiracy to violate the Wire Wager Act and two years on each of seven other related charges. He is scheduled to be sentenced on May 23 before U.S. District Judge Thomas Griesa.

According to evidence presented at the two-week trial, Cohen's company solicited Americans through an enticing Internet address www.sex.com and through a toll-free telephone number.

Prosecutors said Cohen's business also advertised in U.S. newspapers and magazines. The ads told U.S. customers they could open a betting account with the company, wire money to fund the account and then bet on American sporting events and contests.

Prosecutors said undercover FBI agents accessed the Internet sites and found information about betting on the outcomes of professional and college sporting events, such as basketball, hockey, baseball and football games.

The undercover agents then opened accounts by transferring money via Western Union. They placed wagers on the games from computers and telephones in New York.

Cohen and the other 21 defendants were indicted in 1998 for their involvement in offshore sports betting operations. Ten of the defendants previously pleaded guilty in the case and seven are still fugitives.

Among those who refuse to return to the United States is Cohen's colleague Steve Schillinger, vice president and director of wagering for World Sports Exchange.

Schillinger told Reuters late last year that the company does not believe that what it is doing is illegal and that the U.S. government does not have jurisdiction over World Sports Exchange because it is not based in the United States.

He said the operation takes annual bets of $100 million to $200 million.

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