Connecticut Men Indicted in $3 Million Online Gambling Fraud Scheme
Federal authorities have charged two Connecticut men in connection with an alleged $3 million online gambling fraud scheme. Joseph R. Labriola, 60, of Wallingford, and Edward J. R. Smith, 50, of North Haven, are accused of operating an illegal sports betting ring and defrauding participants out of substantial funds. The indictment details a multi-year operation that allegedly siphoned millions from unsuspecting gamblers.
Alleged Scheme and Operation
According to court documents, the illicit sports betting operation ran for nearly six years, specifically between July 2017 and March 2023. It allegedly involved an online platform where participants could place bets. Labriola is identified as the “lead manager” of this enterprise. His role reportedly included overseeing the operation and managing the overall illicit business.
Smith, on the other hand, is accused of acting as a “bookie” and a “money collector” within the organization. Gamblers allegedly deposited funds into the scheme through various methods, including cash payments, checks, and wire transfers. These transactions funneled money into the illegal betting ring.
The Core of the Fraud Charges
The crucial aspect of the allegations involves the fraudulent nature of the scheme. It is alleged that Labriola and Smith failed to pay out winnings to successful bettors. Instead, these funds were reportedly diverted for personal expenses. They also allegedly used the money to pay off other gamblers, creating a cycle of non-payment and misappropriation. This alleged practice forms the basis of the wire fraud charges against them, highlighting the deceptive practices within the online gambling fraud scheme.
Charges and Potential Penalties
Both men face serious federal charges. Labriola is charged with:
- One count of conspiracy to commit wire fraud.
- One count of wire fraud.
- One count of conspiracy to operate an illegal gambling business.
Smith faces charges of:
- One count of conspiracy to commit wire fraud.
- One count of conspiracy to operate an illegal gambling business.
The penalties for these offenses are significant. Conspiracy to commit wire fraud and wire fraud each carry a maximum prison sentence of 20 years. Conspiracy to operate an illegal gambling business could result in up to 5 years in prison. Additionally, both men could face substantial fines and be ordered to pay restitution for the alleged damages caused by their actions.
Ongoing Investigation and Legal Process
Labriola and Smith were arrested and have since been released on bond. They have not yet entered pleas to the charges against them. It is important to note that an indictment represents an accusation by a grand jury and is not evidence of guilt. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by a collaborative team of law enforcement agencies. These include the Federal Bureau of Investigation (FBI), the Internal Revenue Service – Criminal Investigation (IRS-CI), and the New Haven Police Department. This multi-agency effort underscores the seriousness of the charges and the extent of the alleged criminal activity.
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