Wednesday, May 23, 2018

Owe Money to the #Mafia? #Mobsters Foreclose on Your Body, Not Your House, #OrganizedCrime Gambling is Here to Stay #OperationFreeRoll

On the same morning last week that Senate President Dominick Ruggerio mused on talk radio about a possible future with sports betting parlors dotting the state, James Petrella stood before a court magistrate and pleaded out to organized criminal gambling.

Ruggerio’s remarks came a day after the U.S. Supreme Court legalized sports betting.

Petrella’s change of plea came two years after Rhode Island’s last big underworld sports-betting bust, when, in April 2016, the state police arrested 20 people — including two minor-league baseball players — in “Operation Free Roll” and charged them in a multi-million-dollar bookmaking conspiracy.

While state lawmakers rush to take advantage of the high court’s ruling — Gov. Gina Raimondo wagered on its decision and included $23.5 million in anticipated sports betting revenue in her new fiscal budget — law enforcement officials, a former underworld figure and others say don’t bet on illegal gambling disappearing entirely.

Magistrate John F. McBurney III says there was no talk of irony or of the high court’s decision last week when Petrella, 33, of Narragansett, appeared before him in Kent County Superior Court and pleaded no contest to what may soon become a legitimate Rhode Island pastime.

Prosecutors alleged that gamblers used Petrella’s co-owned restaurant, Portside, along with the Cozy Grill, in Warwick, owned by Thomas Pilderian, to place and settle bets. Proceeds of the operation, says state police Lt. Col. Joseph Philbin, went to “remnants” of the Patriarca crime family, which for decades used bookmaking to finance its operation.

McBurney, a former state senator from Pawtucket and one-time member of the state Lottery Commission, says it’s too early to tell if legal sports betting will cut “into the organized crime element” and he sees fewer gambling cases before him.

He says he hopes the state “goes all the way” and legalizes all forms of sports betting now rather than take the “piecemeal” approach it used with casino gambling, first approving video-slots and only years later actual table games at Twin River Casino, in Lincoln.

For decades “there has been a lot of wringing of hands” about gambling, and consequently millions of dollars lost in state revenue, McBurney says, as lawmakers moved too cautiously with gambling at Twin River, and the video-slot parlor at Newport Grand Casino. Now that sports gambling has arrived, it’s time to go all in, McBurney says: “Whatever we can do to maximize what the Supreme Court has decided, we should.”

One former Providence mob associate, now in the federal Witness Protection Program, says underworld bookmaking will survive legal sports betting because of an exclusive benefit it offers gamblers: betting on credit.

Illegal bookmakers allow — in fact, encourage — their customers to bet on credit, he says; a simple phone call and the bet is made without any cash changing hands. That won’t happen with legal sports gambling, where customers will have to put money up front first to wager.

Often times the underworld gambler is already in credit trouble: “These guys don’t have credit cards,” the former mob associate said. “So when you’re a bookie, you want these guys to lose. Then they’re playing on credit and then they owe you. That’s how the mob infiltrates a lot of it. They get you in a position where you have to borrow money to keep your business going. That’s how you get in trouble.

“The mob is different from a bank, which will foreclose on your house if you owe them,” he says. “The mob forecloses on your body.”

State and local police say they spent months investigating the bookmaking operations at the Cozy Grill and Portside. They listened in on phone conversations as more than a thousand bets were made on everything from Providence College basketball to NASCAR races.

The bets were then often transferred to two online sports betting websites, based in Central America.

Steven O’Donnell was the state police superintendent during “Operation Free Roll,” and in his earlier years worked undercover as a bookie.

Nationally illegal gambling is a $150-billion industry and “statewide it’s a huge underground economy,” O’Donnell says. “I don’t know if anyone could put a figure on it, but over the years we’ve handled multi-million dollar bookmaking operations to the small-time ones. Ninety-nine percent of the ones we do are tied to traditional mafia.”

O’Donnell says, “I don’t really see how you take the organized crime element out of bookmaking” particularly since it operates on credit, players don’t need to report their winnings for tax purposes and the General Assembly may restrict legal sports gambling to Twin River in Lincoln and the company’s new casino, under construction in Tiverton, leaving ample room for illegal gambling to thrive.

“It will all depend what kind of legislation comes out of this,” he says, and how fast. He notes it took years for the state to grapple with its medical marijuana program and the lucrative black market that spun from it.

While lawmakers debate how to implement legal sports betting and professional leagues wrestle with how to protect the integrity of their games, O’Donnell wonders what college athletes will be told.

For years, O’Donnell says he visited Providence College, Bryant University and even the New England Patriots speaking with athletes about what area bars and restaurants to avoid and explaining how bookmaking works.

“What do you tell student athletes now that sports betting is legal?”

James Petrella was the last of the 20 suspects in “Operation Free Roll” to plead no contest to the charges, court records show. None went to prison. Petrella, like most of the others, received a suspended sentence and probation. His total fines came to $2,259.25

Thanks to Tom Mooney.

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