11 were arrested in an illegal operation for sports betting

BIRMINGHAM, Ala. (AP) — Federal prosecutors said Friday that 11 people across the country have been charged with tax evasion and other crimes in connection to an online sports betting organization.

Prosecutors claimed that the defendants were the operators of Red44, a sports betting company. They also said that the Red44 used an offshore server in Costa Rica to conduct its operations. Birmingham’s indictment includes 114 charges, including tax evasion, conspiracy to operate a illegal sports-betting company and money laundering.

Indictment claims that the company accepted wagers of hundreds of millions from gamblers, but that operators did not pay millions in excise tax.

Prosecutors said the company made $75 million between 2019-2021 and that it failed to pay almost $20,000,000 in excise taxes.

Prosecutors claim that the operation is rooted in Alabama, where it was started by a man who ran a sports-betting business. This eventually evolved into Red44. Prosecutors claimed that the state had made it illegal to operate a gambling operation.

They are all alleged to have been senior agents within the Red44 organisation or original founder members. Alabama has six of the seven defendants. The other defendants are from Georgia and Nevada. Prosecutors said Red44 operated similarly to a multilevel marketing business where bookmakers were paid a percentage of their subagents’ profits.

The IRS and Homeland Security investigated the case.