Illegal sports betting operation leads to 11 charged with tax evasion

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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 said the defendants operated the Red44 sports betting organization, which they said utilized an offshore server located in Costa Rica for its activities. The 114-count indictment was filed in Birmingham and includes charges of tax evasion, conspiring to operate an illegal sports-betting organization and money laundering.

The indictment alleges that the organization accepted hundreds of millions of dollars in wagers from gamblers but that operators failed to pay millions of dollars in excise taxes.

Prosecutors estimated the organization made $75 million between 2019 and 2021 and failed to pay nearly $20 million in excise taxes.

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Prosecutors said the operation has its roots in Alabama with a man's sports-betting operation that eventually became Red44. Prosecutors said the gambling operation was illegal under state law.

An Illegal sports betting operation lead to 11 across the country charged with tax evasion on Friday. The Indictment says their organization accepted millions of dollars in wagers but failed to pay the excise taxes.

The 11 defendants are alleged to be senior agents in the Red44 organization or original founding members. Six of the defendants live in Alabama. The others are from Massachusetts, Nevada, Colorado, Tennessee and Georgia. Prosecutors said Red44 operated similarly to a multilevel marketing business where bookmakers were paid a percentage of their subagents’ profits.

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The case was investigated by the IRS and Homeland Security.