ironman verified complaint for forfeiture and agreement
TRANSCRIPT
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UNITED STATES DISTRICT COURT
MIDDLE DISTRICT
OF
FLORIDA
TAMPA DIVISION
UNITED STATES OF AMERICA
Plaintiff,
v
Case No.:
8:
15-cv-
$2,761,910 IN UNITED STATES CURRENCY
Defendant.
VERIFIED COMPL INT FOR FORFEITURE N
R M
In accordance with Rule G(2) o the Supplemental Rules for Admiralty or
Maritime Claims and Asset Forfeiture Actions, Plaintiff United States
o
America
brings this complaint and alleges upon information and belief as follows:
N TURE OF THE CTION
1. This is a civil action in rem to forfeit to the United States o
America, pursuant to 18 U.S.C. 981(a)(1)(C) and Rule G(2), $2,761,910
in
lottery proceeds received from the World Triathlon Corporation ( Lottery
Proceeds ) on the ground that the funds represent property which constitutes or
is
derived from proceeds traceable to a violation
o
18 U.S.C. 1955, or a
conspiracy to commit such offense. The Lottery Proceeds are thus property
constituting or derived from proceeds traceable to a violation o an offense
constituting specified unlawful activity (as defined in section 1956(c)(7) o Title
18) and subject to civil forfeiture to the United States pursuant to 18 U.S.C.
981
a) 1
)(C).
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JURISDICTION ND VENUE
2. This Court has subject matter jurisdiction over an action
commenced by the United States by virtue of 28 U.S.C.
§
1345, and over
an
action for forfeiture by virtue of 28 U.S.C. § 1355.
3.
This Court has in rem jurisdiction over the Lottery Proceeds
pursuant to:
a. 28 U.S.C. § 1355(b)(1)(A), because pertinent acts or
omissions giving rise to the forfeiture occurred within the Middle District of
Florida; and
b.
28 U.S.C. § 1355(b)(1 )(B), because venue properly lies
in
the Middle District of Florida pursuant to 28 U.S.C. § 1395.
4.
Venue is proper in the District Court for the Middle District of Florida
pursuant to 28 U.S.C. § 1355(b)(1), because the acts giving rise to the forfeiture
of the Lottery Proceeds occurred
in
this district.
5. Because the Lottery Proceeds are in the government s possession,
custody, and control, the United States requests that the Clerk of Court issue an
arrest warrant n rem upon the filing of the complaint, pursuant to Supplemental
Rule G(3)(b)(1). The United States will then execute the warrant on the property
pursuant to 28 U.S.C. § 1355(d) and Supplemental Rule G(3)(c).
THE DEFEND NT N R M
6. The World Triathlon Corporation (WTC) delivered the Lottery
Proceeds to the United States
on
May
11
2015. The Lottery Proceeds are
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currently being held by the United States in the United States Marshals Service
suspense account.
7.
The WTC has entered into a Consent Forfeiture Agreement with
the United States. See Consent Forfeiture Agreement attached hereto as Exhibit
A The WTC has agreed not to contest that the Lottery Proceeds represent
property which constitutes or
is
derived from proceeds traceable to a violation of
Title 18, United States Code, Section 1955, and that they are thus subject to
forfeiture to the United States pursuant to 18 U.S.C. § 981 a) 1 )(C). Exhibit A at
f
3. Additionally, WTC has agreed that it will not contest the civil forfeiture of the
Lottery Proceeds and waived its right to receive notice of this civil forfeiture
action.
/d
Therefore, the United States will not be sending WTC notice of this
civil forfeiture action.
B SIS FOR FORFEITURE
8.
Pursuant to Title
18,
United States Code, Section 1955, it
is
a crime
to conduct an illegal gambling business. An illegal gambling business
is
a
gambling business that:
a. Violates the law of a State in which it conducts business;
b. Involves five or more persons; and
c. Remains in continuous operation for at least thirty days; or
has gross revenue of $2,000
in
a single day.
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9. Lotteries are prohibited by the Florida constitution.
1
The
constitutional prohibition is also codified
in
statute. Fla. Stat. 849.09. Generally,
a lottery
is
a scheme that contains three elements: consideration, chance, and
prize.
10. Because the Lottery Proceeds represent proceeds
o
a violation of
18 U.S.C. § 1955, they are subject to forfeiture to the United States pursuant
to
18
U.S.C. § 981(a)(1)(C). Under Section 981(a)(1)(C), the United States is
authorized to civilly forfeit any property that constitutes or is derived from
proceeds traceable to a specified unlawful activity, as defined in 18 U.S.C. §
1956(c)(7). Specified unlawful activity, is defined in 18 U.S.C.
§
1956(c)(7) to
include offenses listed
in
18 U.S.C.
§
1961(1), which
in
turn includes conducting
an illegal gambling business
in
violation of 18 U.S.C.
§
1955.
11. As required by Rule G(2)(f), the facts set forth herein support a
reasonable belief that the government will be able to meet its burden of proof at
trial. Specifically, they support a reasonable belief that the government will be
able to show by a preponderance of the evidence that the Lottery Proceeds are
traceable to proceeds of an illegal gambling business violation.
12. Specific details of the facts and circumstances supporting the
forfeiture of the Lottery Proceeds have been provided by Special Agent Lynn M.
Billings of the Federal Bureau of Investigation who states as follows:
1
Article
10,
§
7
Fla.
Const.
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F CTS
13.
WTC
is a for-profit Florida corporation which
was
formed in 1989.
WTC
is headquartered in Tampa, Florida and conducts business in the state
of
Florida and elsewhere.
WTC
organizes, promotes, and licenses triathlon races,
including lronman triathlons,
in Africa, Asia, Australia, Europe, North America,
and South America. Each
year
in October,
WTC
holds the lronman World
Championship in Kailua-Kona, Hawaii. Since at least 2008, WTC has remained
in continuous operation and has employed more than five persons.
14. Generally, athletes gain entry into
the
lronman World
Championship in one of four ways: by earning a slot at one of the over three
dozen qualifying WTC lronman events held worldwide (slots are awarded to the
top age-group finishers), by being selected in the lronman Lottery,
by
being
selected in the lronman Legacy Program,
3
or by winning a slot through the
lronman World Championship
e ay
auction.
4
2
An
lronman Triathlon consists of a 2.4-mile swim a 112-mile bicycle ride and a 26.2-
mile
run.
3
The Iron man Legacy Program grants 100 of WTC's most loyal customers the
opportunity to compete in the lronman World Championship. One hundred Legacy
winners are chosen by WTC based on several criteria. To
be
eligible for selection
through the Legacy Program, athletes must have completed a minimum of 12 full-
distance lronman-branded races, have never raced
in
the lronman World Championship,
have completed at least one full-distance Ironman event in each of the two previous
years, and be registered for a full-distance lronman event in the year in which they seek
to compete
in
the lronman World Championship.
4
The lronman World Championship eBay auction provides athletes the opportunity to
bid on one or more slots to the lronman World Championship. The auction
is
conducted
by lronman Foundation, Inc. The winning bids get
an
entry into the lronman World
Championship event. Each slot begins with a minimum bid of $10,000.
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15. The lronman Lottery began in 1983, as a
way to
provide athletes
who did not qualify the opportunity to compete in the lronman World
Championship. Each
year
since approximately 1989, the
WTC
has conducted
the lronman Lottery, through which it has awarded athletes the opportunity to
compete in the lronman World Championship.
The
2015 l ronman Lottery entry
fee was $50, and the lottery was used to award 1 athletes the opportunity to
compete
in
the lronman World Championship.
6
Slots
for
the Lottery Program do
not sell out, but an athlete can only register for the lronman Lottery once per
year. For an additional $50, however, athletes can purchase membership in the
Passport Club which offers an increased chance of being selected through the
lottery. If an athlete registers
for
the lronman Lottery and joins the Passport
Club, he or she receives two chances to be selected. By paying the Passport
Club membership of $50 per calendar year, athletes double their chances of
winning the lottery.
7
Prior to that year, the lronman Lottery was conducted by the Hawaii Triathlon
Corporation.
6
Winners of the 2015 lottery were afforded the opportunity to purchase
an
entry at face
value ($850) to compete in the lronman World Championship, subject to the condition
that the selected individual first completes another lronman-branded race leading
up
to
the lronman World Championship
race.
7
In
2012
WTC
changed the way
it
selected lottery winners. Beginning that year,
athletes gained an increased chance of being selected for the Iron man Lottery based
on
the number of years that they
had
entered the lottery since 2004. For example, if
an
athlete
had
registered for every lronman Lottery from 2004 through 2012, his or her
chances of winning a lottery entry
to
the lronman World Championship would have
been
eight times greater than if
he
or she were registering for the first time. Additionally,
entrants were required to have consecutive entries, year-over-year, to maintain credit
from
previous years.
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16 WTC represented to athletes that it was unable to release exact
numbers with regard to the number of people who register for the lottery or the
chances of being selected.
17 The lronman Lottery contains the elements
o
consideration (an
entry fee of between $35 and $50, depending on the year), chance (winners are
randomly selected), and prize (the opportunity to compete
in
the lronman World
Championship). As such, the lottery violates Florida's anti-lottery law. See Fla
Stat. 849.09. Additionally, since WTC has remained in continuous operation in
Florida since at least 2008, and has employed more than five persons during that
time, WTC has violated 18 U.S.C. § 1955.
lronman ottery Proceeds
18 WTC received 10,939 entries for the 2013 Iron man Lottery, through
which WTC awarded 100 slots to the 2013 Iron man World Championship. Each
entry fee was $40.
In
addition, 4,337 individuals purchased a $50 membership
in the Passport Club which gave them a second chance of being selected
thought the Iron man Lottery that year. Thus, WTC received a total of $654,410
in Lottery/Passport Club entry fees paid to enter the lronman Lottery for the 2013
lronman World Championship. This $654,410 is proceeds traceable to a
violation 18 U.S.C. § 1955 and subject to forfeiture to the United States pursuant
to 18 U.S.C. § 981(a)(1)(C).
19 WTC received 12,292 entries for the 2014 lronman Lottery, through
which WTC awarded 100 slots to the 2014 lronman World Championship. Each
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entry fee was $50. In addition, 5,940 individuals purchased a $50 membership
in the Passport Club which gave them a second chance
o
being selected
thought the lronman Lottery that year. Thus, WTC received a total
o
$911,600
in Lottery/Passport Club entry fees paid to enter the lronman Lottery for the 2014
lronman World Championship. This $911 ,600 is proceeds traceable to a
violation 18 U.S.C. § 1955 and subject to forfeiture to the United States pursuant
to 18 U.S.C. § 981(a)(1)(C).
20. WTC received 14,254 entries for the 2015 lronman Lottery, through
which WTC awarded 100 slots to the 2015 lronman World Championship. Each
entry fee was $50.
In
addition, 6,889 individuals purchased a $50 membership
in the Passport Club which gave them a second chance o being selected
thought the lronman Lottery that year.
Thus, WTC received a total
o
$1,057,150 in Lottery/Passport Club entry fees paid to enter the lronman Lottery
for the 2015 lronman World Championship. This $1,057,150 is proceeds
traceable to a violation 18 U.S.C. § 1955 and subject to forfeiture to the United
States pursuant to 18 U.S.C.
§
981(a)(1)(C).
21. The winners
o
the 2015 lronman Lottery were announced on
March 17, 2015. Winners o the lottery are permitted to pay the $850 entry fee
for the 2015 lronman World Championship and participate in the race. So in
So in
effect
there were 21,143 entries for the 2015 lottery (14,254 lronman Lottery
entries and 6,889 Passport Club entries). Thus
the
odds of a first
time
lottery entrant
being selected were
less
than 1 in 200.
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2015, WTC made over $10,000.00 per slot it awarded via the lronman Lottery
(on top of the $850 registration fee).
lronman Valentine's Day Lottery and Gift
o
Kona drawing
22. In addition to the generallronman Lottery, WTC conducted two
other lotteries in 2014: the lronman Valentine's Day Lottery and the lronman
Gift of Kona drawing.
23. The lronman Valentine's Day Lottery was used to randomly select
one winner who was given the chance to compete at the lronman World
Championship
on
October
11,
2014. The entry fee was $50 and athletes could
purchase as many entries as they wanted. Registration for the Valentine's Day
Lottery opened
on
February 5, 2014, and closed
on
February 14, 2014. There
were 1,352 entries
in
the Valentine's Day Lottery and one winner. That lottery
alone grossed WTC $67,600. The lronman Valentine's Day Lottery contained
the elements of consideration
a
$50 entry fee), chance (the winner was
randomly selected), and prize a chance to compete at the lronman World
Championship). This $67,600 is thus proceeds traceable to a violation of 18
U.S.C. § 1955 and subject to forfeiture to the United States pursuant to 18 U.S.C.
§ 981
a) 1
)(C).
24. The lronman Gift of Kona drawing was used to randomly select
one winner of an opportunity to compete in the 2015 lronman World
Championship and a VIP package for two people on race day. The entry fee
was $50, and athletes could purchase up to ten entries. Registration for the Gift
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o Kona drawing opened
on
December 4, 2014, and closed on December 31,
2014. There were 1,423 entries in the Gift
o
Kona drawing and one winner.
That lottery grossed WTC $71,150. The lronman Gift
o
Kona drawing contained
the elements
o
consideration
(a
$50 entry fee), chance (the winner was
randomly selected), and prize (a chance to compete in the 2015 lronman World
Championship and a VIP package for two). This $71,150 is thus proceeds
traceable to a violation
o
18 U.S.C. 1955 and subject to forfeiture to the United
States pursuant to 18 U.S.C. 981(a)(1)(C).
25. In total, WTC grossed $2,761,910 from the 2013 lronman Lottery
($654,410), the 2014 lronman Lottery ($911 ,600), the 2015 lronman Lottery
( 1
,057, 150), the Valentine's Day Lottery ($67,600), and the Gift o Kona
drawing ($71,150). This $2,761,910
is
thus proceeds WTC received since
October 24, 2012 traceable to a violation o 18 U.S.C. 1955. Therefore, the
$2,761,910
is
subject to forfeiture to the United States pursuant to 18 U.S.C.
981 (a)(1 )(C).
ON LUSION
As required by Rule G(2)(f), the facts set forth herein support a reasonable
belief that the government will be able to meet its burden o proof at trial.
Specifically, for the reasons set forth above, probable cause exists to believe that
the Lottery Proceeds are traceable to proceeds
o
an illegal gambling business
conducted in violation
o
18 U.S.C. 1955. Therefore, the Lottery Proceeds are
subject to forfeiture to the United States pursuant to 18 U.S.C. 981(a)(1)(C).
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WHEREFORE, the United States requests that process be issued
against the Lottery Proceeds,
in
accordance with Rule G to enforce the
forfeiture, and that any person or entity having an interest therein be cited and
directed to appear and show cause why the Lottery Proceeds should not be
forfeited to the United States for disposition according to law; and that the United
States have such other and further relief as this case may require.
Dated: May 12, 2015 Respectfully Submitted,
A. LEE BENTLEY, Ill
United States Attorney
By: i
JAiJlESA. MUENCH
Assistant United States Attorney
Florida Bar Number 472867
400 North Tampa Street, Suite 3200
Tampa, Florida 33602
813) 274 6000 telephone
813) 27 4-6220 facsimile
E-mail: [email protected]
By:
Assistant United States Attorney
USA
NO. 141
400 North Tampa Street, Suite 3200
Tampa, Florida 33602
813) 27 4-6000 - telephone
813) 27 4-6220 - facsimile
E-mail: [email protected]
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VERIFIC TION
I Lynn
M.
Billings verify and declare under penalty o perjury that I am a
Special Agent with the with the Federal Bureau
o
Investigation and pursuant
to
28 U.S.C. 1746 I state that I have read the foregoing Verified Complaint for
Forfeiture
in Rem
and the matters contained therein are true to my knowledge
and belief.
I hereby verify and declare under penalty
o
perjury that the foregoing is
true and correct.
Executed this 12TH day
o
May 2015.
cial Agent Lynn
M.
Bill gs
Federal Bureau
o
lnve · ation
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CONSENT FORFEITURE GREEMENT
The United States of America and the World Triathlon Corporation, through
the undersigned attorneys, hereby agree
and
stipulate
as
follows:
1.
On
or before May 8, 2015, the World Triathlon Corporation shall pay
to
the United States $2,761,910 ( Lottery Proceeds ), representing the proceeds the
World Triathlon Corporation earned from its operation of lotteries
1
since October
24, 2012.
2.
The United States alleges that the Lottery Proceeds were derived
from
the operation of illegal lotteries, conducted
in
violation of Title
18,
United States
Code, Section 1955,
and
are therefore subject to forfeiture pursuant to Title 18,
United States Code, Section 981
a) 1
)(C).
3. The World Triathlon Corporation agrees not to contest that the Lottery
Proceeds represent property which constitutes or
is
derived from proceeds
traceable to violations of Title 18, United States Code, Section 1955,
and
that
they are thus subject
to
forfeiture to the United States pursuant to
18
U.S.C.
981(a)(1)(C), and it relinquishes any interest it might have
in
the Lottery
Proceeds.
4.
The World Triathlon Corporation consents to the civil forfeiture of the
Lottery Proceeds, including the entry of a final judgment of forfeiture,
and
hereby
waives any right to further notice
of or
to
contest any
judicial forfeiture
proceeding against the Lottery Proceeds. The waiver
to
contest the forfeiture
1 These lotteries include the lronman Lottery, the lronman Passport Club, the
lronman Valentine's Day Lottery, and the lronman Gift of Kona drawing.
EXEHIBIT A
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includes the waiver of any objection the World Triathlon Corporation may have to
the forfeiture, including, but not limited to, any objection that the forfeiture was
not noticed or commenced in a timely fashion or that it constitutes an excessive
fine. All right, title
and
interest to the Lottery Proceeds shall
be
condemned,
forfeited and vested in the United States, pursuant to 18 U.S. C.
§§ 981
a) 1 ) C)
and
18
U.S.C.
§
1955, free from the claim of the World Triathlon Corporation.
5.
The World Triathlon Corporation agrees to unconditionally release,
hold harmless, acquit, and discharge the United States of America, the United
States' agents and employees, and all law enforcement agencies from any and
all claims, demands, causes of actions or suits, judgments, damages, losses of
services, expenses of whatever kind
and
description, that might exist by reason
of or arising out of the forfeiture of the Lottery Proceeds.
6. The United States Attorney's Office for the Middle District of Florida
agrees not to bring criminal charges against the World Triathlon Corporation or
its current or past shareholders, directors, officers, employees, or contractors
and
to release, hold harmless, acquit,
and
discharge each such party from any
civil liability-related
to
conduct
that
is
both: (1) known to the
U.S.
Attorney's
Office for the Middle District of Florida at the time this agreement
is
executed and
2) related to the conduct giving rise to this agreement.
7. Neither World Triathlon Corporation's signing of this agreement nor its
Which conduct includes operation of the lronman Lottery and the lronman Passport
Club since 1983, and the one-time operation
of
the lronman Valentine's Day Lottery
and the lronman Gift
of
Kona drawing.
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forfeiture of the Lottery Proceeds
in
any way constitutes an admission of criminal,
civil or other wrongdoing.
8.
The United States
of
America and the World Triathlon Corporation
waive any and all claims or rights that they have or may have, pursuant to 28
U.S.
C. §
2412 (the Equal Access to Justice Act) or otherwise, for attorneys fees
or other costs involving the Lottery Proceeds arising out
of
the forfeiture action,
including the making
of
this agreement and the forfeiture detailed herein.
9
This agreement constitutes the final, entire, and exclusive expression
of
the parties agreement relating to the subject matter hereof,
and
supersedes
all prior or contemporaneous agreements, settlement proposals, negotiations,
and representations, written or oral, between the parties.
DATED: May
5
2015
Edward
R.
Sh hat,
Counsel for World Triathlon Corporation
Florida Bar
No.
152634
Jones Walker, LLP
201
S Biscayne Blvd, Suite 2600
Miami,
FL
33131
A. Lee Bentley, Ill,
United States Attorney
James
A.
Muench,
Assistant United States Attorney
Florida Bar No. 472867
400 North Tampa Street, Suite 3200
Tampa, Florida 33602
Assistant United States Attorney
USA NO.
141
400 North Tampa Street, Suite 3200
Tampa, Florida 33602