Monday, July 24, 2006

The surprise airport arrest of a prominent UK internet gambling executive
this week is a counter-productive application of US law that ignores complex
international trade issues, says Larry Gaydos, partner in the White Collar
Defense/Antitrust Practice Group at Haynes and Boone, LLP. "Selectively
targeting foreign businessmen who are respected in their own country to
sensationalize the issue is unfair to the individuals and our friends in the
international community," says Mr. Gaydos, who has extensive experience in
white collar criminal defense, foreign trade, and general criminal matters.
"Long-term, it may also have adverse consequences on US business. If the
tables were reversed, I am sure the US would be outraged." Along with the
recent extradition of three UK bankers to face Enron- related charges in
Houston, the arrest of BetOnSports.com executive David Carruthers at
Dallas-Fort Worth International Airport Sunday night has prompted many in
the UK business and legal communities to cry foul. As the New York Times
pointed out this week, "Now, many fear that the same controversial
extradition treaty could be used to force British online gambling executives
to stand trial in the United States." Understandably, gaming stocks on the
London Stock Exchange have been severely impacted.

But, Mr. Gaydos says, the two cases are actually quite different in legal
foundation. The British banker extraditions involved wire fraud, but
encompassed conduct that would be a crime in most countries. The supporting
FBI affidavit used in the extradition proceedings properly sets out a
"probable cause" case, he says.

The Carruthers arrest, however, is problematic because the activity
involved -- online gambling -- is legal in the UK.

"The issues involved are complex international issues involving trade and
broader issues about the international policing of the Internet," Mr. Gaydos
says. "The many problems associated with both these international issues
require international solutions. The US attempt to do an end-run through a
publicized arrest like this is legitimately perceived as arrogant and
probably counter-productive to the mutual international goal of solving a
growing problem."