5Dimes Reaches a $46.8 Million Settlement with DOJ for Illegal US Operations

5Dimes, a renowned Costa Rican sportsbook operator, has agreed to pay over $46.8 million as a settlement to the U.S. Department of Justice after evidence of unlawful sports betting operations, wire fraud, and money laundering was found against the leading online gaming brand.

The announcement was made by William M. McSwain the United States Attorney for the Eastern District of Pennsylvania (EPDA), following the conclusion of a criminal investigation into the internet sports betting company.  According to information published by the EPDA, 5Dimes and Laura Varela agreed to forfeit over $30 million in cash, assets, and memorabilia and paid another $15 million upfront to facilitate the settlement.

Laura Varela, a Costa Rican citizen is the widow to William Sean Creighton, the founder of 5Dimes who was tragically kidnapped and murdered back in 2018. Before his murder, Creighton exclusively controlled the operations of 5Dimes, and he and his sports betting company had been under investigation by the EPDA and the Department of Homeland Security since around May 2016. Creighton and his company had long been suspected for a range of offenses including illegal gambling, wire fraud, and money laundering; charges that eventually led to the hefty settlement.

Use of Third-Party Processors to Illegally Operate in the US

From the probe which continued after the kidnapping of Creighton, it was discovered that since at least 2011, 5Dimes or rather 5D Holdings Ltd had been conducting illegal gambling operations in the US, effectively raking in proceeds to the tune of more than $46.8 million to date. Moreover, the sports betting company acted in violation of the law by making deliberate efforts to conceal the source of the gambling proceeds via third-party payment processors (TPPPs).

These TPPPs were used to charge the credit cards of customers playing with 5Dime – payments that would have otherwise been rejected by the credit card companies in the US. Payouts on the other hand would be paid back to bettors through bank accounts registered under shell companies controlled and operated by Creighton.

Will 5Dimes Be Allowed Back into the US Regulated Market?

During Creighton’s lifetime, Varela was never part of the managerial team of 5Dimes, and at no occasion did she ever involve herself in the running of the company either. Additionally, even though Varela assumed responsibility of 5Dimes after her spouse’s catastrophic murder, she never exercised any authority over the company’s daily operations.

She later sought to resolve the federal investigation in a bid to start operating 5Dimes in compliance with US regulations, going as far as completely withdrawing the company out of the US market as an offshore entity by the 25th of September. As part of the settlement, 5Dimes and Varela have been absolved of any crimes that were committed before 30th September 2020.

And now, Varela has already established a brand-new identity for the company as 5D Americas LLC and she has even expressly indicated that her company is exploring how it can make a comeback into the USA, but as a legal gambling brand. Even though the settlement argues that the operator is now suitable for taking part in lawful gaming operations, the decision to allow 5Dimes to transition into the US regulated markets is now left to gaming regulators across gambling legal states. For sure, given that 5Dimes is just from accepting bets from Americans illegally, it will be interesting to see how its re-entry bid unfolds!