BoS founder Kaplan must pay $36m in US taxes

BoS founder Kaplan must pay $36m in US taxes

Friday, July 31, 2015
Gary Kaplan has lost his long-running appeal over taxes

BetonSports (BoS) founder Gary Kaplan has lost an appeal over $36m (€32.4m) in taxes and penalties owed in the US.

Kaplan, who was jailed in the US in 2009 for his role in running the illegal operation that was believed to turn over $1bn per year before closing in 2006, claimed that a forfeiture of $43.65m covered his taxes owed for 2004 and 2005.

Kaplan, now 56, pleaded guilty in 2008 to conspiracy, racketeering conspiracy and violating the Wire Wager Act, with a judge at the US District Court in St Louis sentencing him to 51 months in federal prison and the forfeiture.

Kaplan insisted that his plea deal barred the US government from pursuing the back taxes — $25.5m for 2004, $11.2m for 2005 — and that the statute of limitations had run out on the government's ability to collect.

The US Tax Court last year ruled that Kaplan's plea deal was unambiguous in leaving him open to civil tax proceedings, and the three-judge panel on the 8th US Circuit Court of Appeal this week agreed.

Kaplan and BoS chief executive David Carruthers were indicted in St Louis in 2006 on federal counts accusing them of running an illegal gambling operation. 

During sentencing in 2009, Michael Reap, acting US Attorney, said Kaplan had netted $100m when BoS floated on the FTSE AIM. He added: “Kaplan's business model itself was built on a wager that the US could not and would not enforce its anti-sports book laws to reach Kaplan . . . Kaplan lost that wager.”

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