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‘Madoff’-style sports betting scheme leads to poker star’s arrest

In a move one industry watcher likens to the Bernie Madoff scandal, former World Series of Poker bracelet winner Cory Zeidman has been charged with conspiracy to commit wire fraud, mail fraud and a money laundering conspiracy as part of a sports betting fraud scheme from which he operated. Long Island and Florida, according to A press release issued by the United States District Court for the Eastern District of New York.

The two-count indictment was unsealed on Wednesday, and 2012 WSOP bracelet winner Zeidman was arrested later that morning in Florida.

“As alleged, Zeidman defrauded his victims, stole their life savings and persuaded them to empty their retirement accounts to invest in his bogus sports betting group, all so he could spend it on an international vacation, a residence of several million dollars and poker tournaments,” U.S. Attorney Breon Peace said in the statement. “Today’s indictment reminds us all to beware of so-called investment opportunities that claim having inside information, because it really is a gamble not worth taking.”

According to the indictment, Zeidman led a group that placed advertisements on national radio stations. The ads encouraged people to call the service for sports betting advice, and Zeidman and company gave their picks – for a fee – and told potential winners on the other end of the call that they were insured. to win. . From telling people the games were fixed to assuring them they had inside information from team doctors or TV executives, Zeidman and his team allegedly defrauded bettors out of $25 million. dollars over a period from 2004 to 2020.

Bernie, Cory … Cory, Bernie

“He is, in my opinion, like the Bernie Madoff of sports betting,” said Florida-based sports betting and gaming attorney Daniel Wallach. “This is a so-called Ponzi scheme, cheating the elderly and others out of their nest eggs and essentially cheating them out of their money under false pretenses based on the fiction that there was a guaranteed rate of return. “

According to the federal government, many people lost their savings in the case.

“As alleged, Zeidman preyed on individuals who were tricked into believing he had inside information that would lead them to easy money. In reality, he was selling only lies and misinformation – scamming millions of victims along the way, leaving their lives in financial ruin and their bank accounts empty,” Ricky J. Patel, Acting Special Agent in Charge of Homeland Security Investigations at New York, told Release. “HSI will continue to work with our partners to follow the money and tackle complex financial investigations to bring to justice fraudsters like Zeidman, who fund their lavish lifestyles by concocting ways to bamboozle innocent people when their only real goal is to fill their pockets with sick people. -received money.

Time to regulate handicappers?

Wallach also sees this indictment as a potential black eye for the still nascent world of legal sports betting.

“Not everyone can tell fact from fiction,” Wallach noted. “A savvy investor would be able to detect this, but not all laypersons are able to understand that a scheme like this could not be legitimate.”

Wallach, in fact, goes further and thinks touts and handicappers should be regulated, just like their financial brethren.

“The public must always be protected,” Wallach said. “Tots and handicappers should be subject to some level of state-by-state regulation. As legal sports betting expands to over 30 states, in addition to requiring operators, providers and vendors to adhere to certain regulatory guidelines, I believe the handicapping industry and touts should fall under the hit of gambling agencies. Touts and handicappers operating completely outside of a regulatory framework pose a risk to the industry and the good reputation the industry is trying to develop.

A silly little tidbit in this messy story is that Zeidman used an assortment of aliases throughout the alleged ordeal, including “Steve Nash.” Whether Zeidman claimed to be the current Brooklyn Nets coach and former Phoenix Suns point guard was not said in the indictment. Other pseudonyms used included Richard Barnes, Walter Barr, Mr. Carlyle, Ray Palmer, Rick Cash, Elliot Stern, Gordon Howard, David Coates, Simon Coates, Paul Knox, Mark Lewis and Joel Orenstein. Some of the company names used by Zeidman were Gordon Howard Global, Ray Palmer Group and Grant Sports International.