Luchese Bust Latest in Costa Rican Gambling Crackdown

Six members and associates of the Luchese crime family were arrested this past May 26 for running an illegal online gambling operation that allegedly generated $13 million from September 2015 to March 2016.

"Boopsie" allegedly ran Luchese gambling operation.
The six, who hail from Brooklyn, Queens and Staten Island, face various charges in a 37-count indictment for running the racket, which enabled bettors to place wages on various professional and collegiate sporting events. All payments were wired to an off-shore location.

"These defendants are charged with running a lucrative gambling ring that took in millions of dollars in bets and stretched all the way to Costa Rica," Brooklyn District Attorney Ken Thompson said. "We’ve now shut down this illegal enterprise that was controlled by organized crime and will fully prosecute those who have been indicted.”

The defendants are Eugene “Boopsie” Castelle, 56, of Staten Island; Anthony Grecco, 62, of Howard Beach, Queens; Gaetano “Tommy” Zuccarello, 67, of Bensonhurst, Brooklyn; Theodore (“Teddy”) Vasilakis, 40, of Rego Park, Queens; Ioannis “John” Dinos, 67, of Astoria, Queens; and Vincent Mormile, 54, of Staten Island.

They were arraigned in Brooklyn Supreme Court before Justice Danny Chun, with each facing a variety of charges, including conspiracy, gambling and money laundering.

The defendants were ordered held on bonds ranging from $25,000 to $250,000; they face up to 25 years in prison if convicted of top-count charges.

Grecco faces additional charges in a separate indictment comprised of three counts of first-degree criminal usury for loansharking. If convicted, he faces the most time -- up to 15 years for each count. (This is where the terms consecutively and concurrently can mean a lot.)

From September 1, 2015 to March 15, 2016, the defendants used www.stakestake.com to facilitate betting on all kinds of sporting events, including football, basketball, baseball, hockey, soccer and horse racing. Website members were given a username and password that enabled them to place bets on either the website or by calling a toll-free phone number.

Castelle, a reputed Luchese crime family soldier, "was the de facto leader of the enterprise and received payments for his authority and for protection from rival criminal enterprises," the Brooklyn DA said.

Grecco ran the day-to-day management, controlling access to the website and making payments to the “wireroom” for the Costa Rican-based website, www.stakestake.com, according to the indictment. He also supervised and monitored activities of the operation's clients, including his own personal customers. He also set up weekly meetings in Brooklyn and elsewhere, where the mobsters could pay or collect from customers.

Zuccarello, Vasilakis, Dinos and Mormile each maintained a “sheet” of bettors with the enterprise and contacted Grecco for high-level activities, like opening and closing accounts. Each member of the group earned money by collecting a percentage of losing wages placed by their bettors.

The indictment additionally charges Grecco with money laundering because he paid the wireroom every six weeks to finance the "per-head” fees charged for each active betting account.

The separate indictment charges Grecco with running a loansharking operation by which he lent money to three individuals, charging  interest rates that exceeded 25%.

Costa Rica is a popular choice for illegal gambling websites. As noted, in the eyes of the law, online gambling was a gray area, though Congress has since moved to enact laws to make it a shade darker. The Unlawful Internet Gambling Enforcement Act (PDF), for example, bars the transaction of "unlawful Internet gambling" funds through banks.


The crew allegedly split the Bensonhurst drug trade with the Bonanno-affiliated Bath Ave. Crew.


The Act's wording was somewhat fuzzy --- though betting on sporting events and races across state lines clearly is illegal. Mobsters, seeing opportunity, swiftly started setting up websites in Costa Rica (PDF)—one of several South American and Caribbean countries where online sports betting is legal—to process online bets placed back home in New York. Then in 2008, the Queens District Attorney charged the Gambino family with offshore illegal sports and casino-style gambling operations.

The Bonanno and Genovese crime families set up similar operations in Costa Rica in the following years -- making the Lucheses only the latest to be busted for running a such an enterprise.



Castelle had previously served time in federal prison after a racketeering conviction stemming from a Lucchese loansharking operation in Brooklyn which he helped supervise.

In 1997, he was accused of bribing guards at the Metropolitan Detention Center in an attempt to smuggle pounds of mozzarella, veal, eggplant, sopressata, provolone, olives and pepperoni for incarcerated mobsters. The charges in that case were ultimately dismissed.

He also faced murder charges back when the mob still killed people.


Bensonhurst Crew's "Reign of Terror"
In November 2000, the so-called "Bensonhurst Crew," which included "Boopsie" Castelle, faced murder charges, as the New York Times reported.

Joseph Tangorra, Joseph Truncale, Castelle, Lester Ellis, Robert Greenberg, John Castellucci and Scott Gervasi were members of the group charged with the October 1988 murder of Victor Filocamo, who police found shot in the head and stuffed inside the trunk of a white BMW parked on 73rd Street in Bay Ridge, Brooklyn. He was supposedly slain inside a mob social club located in Bensonhurst.

A source told me the murder went down because Filocamo was indeed a suspected informant.

One night Filocamo, Castelle, Tangorra and others were playing cards in a social club formerly located on 13th Avenue and 73rd or 72nd Street, the source couldn't recall which (found an interesting website about the area).

George Conte, then a Luchese capo, abruptly entered the storefront and shot Filocamo
in the head, telling the others: "Clean this sht up."






The murder charges were part of a broad racketeering indictment against the seven reputed Luchese crime family members, who also were charged with other crimes, ranging from loan sharking to drug dealing to arson to extorting neighborhood shopkeepers for tribute payments, using brute force and arson if necessary.

The crew allegedly split the Bensonhurst drug trade with the Bonanno-affiliated Bath Ave. Crew.

From 1987 to 2000, Tangorra, aka "Joey Flowers," and "Boopsie" supervised the Bensonhurst Crew, which ran illegal gambling dens and loan-sharking operations throughout southern Brooklyn, the indictment said. The crew has also been accused of an attempted murder.

Investigators have said that this crew was formerly helmed by Luchese captain George Zappola, or "Georgie Neck."

Zappola was then years into a 22-year sentence in a federal prison in Brooklyn when in 1996, he arranged to have his sperm smuggled out of the MDC with the help of a corrupt prison guard. Although the sperm eventually reached a Manhattan fertility clinic, the woman meant to carry Zappola's child changed her mind -- and cooperated with federal agents.

The Bensonhurst crew's lawyers were dismissive of the government's accusations. ''If these defendants represent a high level of organized crime figures,'' said one defense lawyer, ''then America is safe.''

They all finally accepted plea deals -- though they first had to wait for "Joey Flowers" to cop to being the triggerman in an attempted murder, for which he was sentenced to 16 years.

As part of the guilty plea entered at Brooklyn federal court, Tangorra, then 52, admitted to the 1992 shooting of Henry Motta over an unpaid debt (he survived the shooting), as well as dealing cocaine for 15 years.

The Luchese crime family’s Bensonhurst Crew, to protect turf, instigated "a reign of terror, using arson, threats of violence and even murder."

Tangorra, in copping the plea, avoided prosecution for two other murder conspiracies that were part of the racketeering indictment, including the 1988 slaying of suspected mob informant Filocamo.

“It was a hard negotiated plea, which effectively resolved any alleged criminal conduct my client engaged in over the last 20 years,” said defense lawyer Larry Bronson, who negotiated the plea with Assistant U.S. Attorney William Gurin and Assistant District Attorney Patricia McNeill.

District Judge Allyne Ross accepted guilty pleas from “Boobsie” Castelle, his brother John “Big John” Castellucci, and reputed wiseguy Joseph “JoJo” Truncale, 71, on racketeering charges, including drug trafficking, extortion, illegal gambling and loansharking.

Sentences ranged from 3½ to eight years.


Illegal Gambling Sites Lead to 46 Arrested
"It’s been a busy week on the illegal online credit betting front, as US prosecutors rush to file charges so they don’t have to interrupt their Memorial Day weekend," a gambling news site reported shortly after the holiday.

The Wednesday prior to that weekend New Jersey officials announced the arrest of 46 individuals connected with an illegal credit betting operation that utilized a Costa Rica-based password-protected website. 

"The gang reportedly involved over 50 agents processing in-person cash transactions with around 320 bettors in the New York/New Jersey area. Bergen County acting prosecutor Gurbir Grewal claimed the operation processed wagers worth “tens of millions of dollars” per year.

The ring was allegedly led by Robert D’Alessio.

"Not to be outdone, Thursday saw Brooklyn District Attorney Ken Thompson announce charges against six men allegedly affiliated with another Costa Rica-based online credit betting operation."

That was the Luchese crew led by "Boopsie."







Costa Rica's Online Gambling Industry Feels the Heat
Costa Rica's booming online gambling industry began in the late 20th century, experiencing its heyday by 2006.

What amounted to a multimillion-dollar industry "lives partially in the shadows for various reasons; the most important being the constant pressure applied by law enforcement and prosecutors from the United States, " one reported noted. "After more than a decade of lucrative turbulence, however, the online gambling industry in Costa Rica is starting to show signs of strain."

Results of a journalist's investigation into illegal online gambling based in Cosa Rica:

As recently discussed in the Costa Rica Star, the film Runner Runner -starting Ben Affleck and Justin Timberlake, is being co-opted by the American Gaming Association (AGA) as part of their efforts to discredit online poker in Costa Rica by portraying the industry in a very negative light. The intent of the AGA is to adopt Runner Runner as a sort of boogeyman to help them legalize online poker in the United States. The AGA’s motive is clearly monetary, and it undermines the efforts of entrepreneurs in Costa Rica who developed an industry that produces billions of dollars each year.

Internet casinos and other online gambling outfits arrived in Costa Rica and just before the turn of the century. Costa Rica is not a pioneer in this regard. The Caribbean island nation of Antigua was the first to pass legislation that granted licenses to online casinos back in 1994. By 1999, there were a couple of hundred online gambling operations generating nearly a billion dollars in annual revenue, and the U.S. quickly moved to pass the Internet Gambling Prohibition Act. At this point, entrepreneurs from the U.S., the United Kingdom, Canada, and Israel turned their attention to Costa Rica.

Many online gambling operations are still based in Antigua, but entrepreneurs became interested in Costa Rica despite the lack of laws allowing Internet games of chance. Close ties with the U.S. had already facilitated a burgeoning call center and outsourcing industry in Costa Rica, which proved very valuable to the establishment of online casinos and sportsbooks. From a legal standpoint, entrepreneurs did not find barriers; plus, they had the added advantage of being able to move their proceeds to overseas accounts and thus avoid taxes in Costa Rica. 
The early years of the 21st century were essentially the golden age of online gambling in Costa Rica. Sports bookies and poker entrepreneurs from the U.S. were delighted to be able to operate in relative freedom and in a cultural ambiance that was not that far removed from their country. 
Even though Antigua is home to nearly 5,000 U.S. citizens who appreciate the island’s adoption of English as its official language, online gambling pioneers felt more comfortable in Costa Rica. 
To a certain extent, online gambling entrepreneurs knew that surveillance of their activities would continue in Costa Rica, but they never expected that enforcement of the Internet Gambling Prohibition Act of 1999 would follow them here. 
From 2000 to 2004, U.S. federal law enforcement agents executed arrest warrants in Costa Rica of individuals allegedly involved in online sportsbook operations. In some cases, law enforcement officers waited for some individuals to land in a U.S. airport as they made money runs; but, in other occasions they were arrested in Costa Rica and quickly extradited. Online gambling entrepreneurs were deeply disappointed to learn that U.S. agents could so easily trample the sovereignty of this country. 
In 2005 and 2006, two of the biggest global brands in online gambling and lifestyle were subject to spectacular raids by U.S. law enforcement in Costa Rica. Never mind that these brands did not operate in the U.S., and that their principals were not U.S. citizens: They were accused of money laundering and violations of that country’s Wire Act. 
These billionaire brands decided that Costa Rica’s unwillingness to exercise her sovereignty against the U.S. was detrimental to their business, and thus they left our country for European jurisdictions where they have remained ever since. The departure of these two brands was immediately felt as hundreds of Ticos lost their jobs and supporting businesses closed. 
To make matters worse, the administration of President George W. Bush signed into law an even more restrictive law: the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA). Shareholders of brands that remained in Costa Rica reacted negatively to the passing of UIGEA with a massive stock sell-off. By 2009, the U.S. Department of Justice was targeting individual players by freezing accounts and filing money laundering charges. In 2011, the Black Friday raids on the remaining online poker brands in Costa Rica were the last straw for many players in insiders. 
More than two years have passed since Black Friday, and the online gambling industry in Costa Rica has shrunk considerably. In the sportsbook world, the proliferation of Pay-Per-Head (PPH) business models has consolidated sports wagering down to just a few call centers. Bookies with U.S. clients can make use of these PPH services and run their underground business from a smartphone. 
The abrupt exit of major brands, the insufferable tenacity of U.S. law enforcement and internal disagreements have fragmented the Internet gambling industry in Costa Rica. 
The recent warning to Costa Rica by credit ratings agency Moody’s with regard to the fiscal reform plan is moving government officials to take it up again. Fiscal reform would not only increase taxes across the board, it would also prompt online gambling operations in Costa Rica to register with a regulatory agency and be levied a higher rate of tax. 
Online gambling industry insiders in Costa Rica are very much aware of how the country is changing in general. They notice the quick adoption of FATCA and FBAR, the jealous scrutiny and sheer difficulty of banking transactions, the proliferation of fast-food restaurants, the growing number of vehicles on the road, the condominium towers going up, the consumer price inflation, the widespread use of the English language, and the constant presence of U.S. law enforcement in Costa Rica. Suddenly, they feel almost the same as they did before they chose to seek refuge in our country, and now they are seeing incentives to go back.





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