Wednesday, February 07, 2007

Betonsports Plc, the British Internet sports book indicted in the U.S. on
charges of racketeering and violating interstate gambling laws, was found in
contempt of court for failing to answer those charges. U.S. District Judge
Carol Jackson today in St. Louis found the company in contempt for violating
a Dec. 28 order to appear in court. Prosecutors asked her to impose daily
fines on the company's officers until a representative comes forth.
Betonsports' St. Louis counsel Jeffrey Demerath called the judge's chambers
yesterday and ``told us he had been instructed by his client not to
appear,'' Jackson said. ``I clearly believe Betonsports' actions are
contumacious and disregard the court's order without any excuse.'' The
London-based company was indicted last summer, together with its founder
Gary Kaplan, then-Chief Executive Officer David Carruthers and nine other
individual defendants. Prosecutors are seeking the forfeiture of $4.5
billion. Reached by phone in his office this morning, Demerath, a partner at
Armstrong Teasdale, said he hadn't seen a contempt order from the court and
couldn't comment on today's proceedings. Carruthers and six other defendants
appeared in court on July 31 and entered not guilty pleas. Kaplan and two
other defendants are still at large. A not guilty plea was entered by the
court on the company's behalf on Jan. 11. Ginny Pulbrook, a London-based
spokeswoman for the company, did not return an after-hours phone message
seeking comment on today's contempt citation. In November, Demerath was one
of two corporate attorneys who signed a civil consent agreement with federal
prosecutors paving the way for Jackson to issue an order permanently banning
Betonsports from doing business in the U.S.
On the eve of the company's scheduled arraignment on the criminal charges
last month, Demerath also told the court his clients had instructed him not
to answer the charges. Betonsports' decision ``suggests that corporate
management is neither in a coma nor dead but, instead, contemptuous and
defiant,'' Assistant U.S. Attorney Michael Fagan said in court papers asking
Jackson to make the contempt finding. ``The defendant is the company,''
former Assistant U.S. Attorney James Montana said in a telephone interview
from his office in Chicago. ``It would be appropriate for the company to be
fined,'' he said. ``I don't understand how the court could impose fines on
officers or directors who are not a party to the lawsuit,'' he said. Now
chairman of the litigation practice group at Chicago's Vedder Price Kaufman
& Kammholz, Montana was formerly general counsel to casino operator, Bally's
Entertainment Corp. Montana said he didn't believe Jackson would grant
prosecutors' request to fine the officers. Fines against the corporation, if
unpaid, could eventually be converted to a money judgment held by the U.S.
and enforceable against Betonsports assets at least in the U.S. and possibly
abroad, he said. Betonsports suspended trading of its shares on the London
stock exchange on July 18, one day after the U.S. indictment was unsealed.
Last month the company was de-listed.