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Two men plead guilty for operating illegal poker games in New York

19th August 2013 7:27 am GMT

Two defendants have pleaded guilty for their roles in the operation of high-stake illegal poker games in New York City.

William Barbalat and Kirill Rapoport pled guilty before US District Court Judge Jesse Furman last week.

Barbalat pled guilty to travelling in interstate commerce in aid of an unlawful activity, the operation of an illegal poker game, while Rapoport pled guilty to conducting an illegal gambling business.

The men were charged in April earlier this year as part of a 34-defendant indictment charging members and associates of two Russian-American organized crime enterprises with various crimes including racketeering, money laundering, extortion, and various gambling offenses.

Barbalat and Rapoport are the second and third defendants to plead guilty in the case, following a guilty plea by Hollywood producer Bryan Zuriff last month.

Manhattan US Attorney Preet Bharara said: “For three years, William Barbalat and Kirill Rapoport oversaw illegal gambling enterprises in the Southern District of New York. With their pleas, we move closer to holding to account all those who participated in this wide-ranging network of criminal conduct linked to organized crime.”

According to the indictment, Barbalat and Rapoport each ran a high-stakes illegal poker game in New York City from 2010 through 2012, and 2012 through 2013, respectively.

At these games, the pots frequently reached tens of thousands of dollars or more, with operators of the games, including Barbalat and Rapoport, collected percentages of the pots known as “rakes.”

Each of the poker games employed at least five or more people to assist with the operation of the games, payments of debts, and collection of debts.

In pleading guilty Barbalat and Rapoport each face a maximum sentence of five years in prison and three years of supervised release.

As part of his plea agreement, Barbalat agreed to forfeit $150,000 to the US government, while Rapoport agreed to forfeit $250,000.

Both men are scheduled to be sentenced by Judge Furman on December 16th and 18th respectively.

Meanwhile US Attorney Preet Bharara also announced Friday the settlement of a civil forfeiture action against a six-story Chinatown building in New York City, appraised at approximately $17m which had been used for illegal gambling operations.

The settlement between the US and the owner of the building, Won & Har Realty followed a ruling by US District Judge Harold Baer Jr that the building was subject to forfeiture because it had been used in furtherance of illegal gambling and Won & Har was not an innocent owner.

According to public documents filed in Manhattan federal court, for at least the two years prior to the filing of a civil forfeiture complaint in May 2012, the building consistently hosted a group of illegal gambling operators offering various gambling options including pai gow poker and computer-based slot machine games.

For nearly a year after a search conducted by law enforcement in 2011, which resulted in the seizure of hundreds of thousands of dollars in gambling proceeds, illegal gambling continued to be conducted openly in the building, within full view of any passersby in the building’s public hallways. In addition, a large sign advertising gambling was displayed on the front of the building.

In its ruling, the Court rejected Won & Har’s “innocent owner” defence, finding that despite Won & Har’s knowledge of the ongoing gambling in the building, the company failed to take all reasonable steps to terminate the illegal conduct.

The Court cited Won & Har’s failure to investigate whether gambling was continuing in the building in drawing the conclusion that Won & Har was wilfully blind to the illegal use of its building.

As a result of the settlement, Won & Har will forfeit the building to the US government. The US will sell the building, retain 65 per cent of the proceeds of the sale after accounting for the costs of selling the building, and return the remainder of the proceeds to Won & Har.

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