updated 3/30/2007 6:43:36 PM ET 2007-03-30T22:43:36

BetOnSports gambling Web site founder Stephen Kaplan was arrested late Wednesday in the Dominican Republic, according to a federal prosecutor.

U.S. Attorney Catherine Hanaway is prosecuting a case against BetOnSports PLC in St. Louis federal court. Kaplan is named in a 22-count criminal case as the company’s top official.

Hanaway said Kaplan was arrested at a hotel in Santo Domingo by the Dominican National Police, the U.S. State Department and the FBI.

“This was a worldwide search, and thanks to the assistance of many law enforcement agencies this fugitive will soon be back in St. Louis to face the charges against him,” Hanaway said in a statement.

BetOnSports Chief Executive David Carruthers remains under house arrest in a suburb of St. Louis. He was arrested in July, shortly after Hanaway unsealed the criminal indictment against the London-based company, which is publicly traded.

The case has been closely watched by the online gambling industry, which generates about $6 billion annually in the United States.

Jeffrey Demerath, an attorney representing BetOnSports in St. Louis, said he had no comment on Kaplan’s arrest or the criminal case Friday.

A U.S. judge in Puerto Rico ordered Kaplan to remain in custody Friday as authorities seek to return him to St. Louis to face racketeering charges.

Hanaway’s spokeswoman Jan Diltz said a hearing on Kaplan’s detention will be held in Puerto Rico on April 4th.

The indictment charges Carruthers and Kaplan with felony racketeering and fraud. The charges are filed using a 1960s-era law known as the Wire Act that prohibits placing bets on sports events over the phone.

Originally designed to crack down on mobsters, the law has become a tool for U.S. prosecutors to charge offshore Internet gambling operations.

Hanaway’s office and BetOnSports reached a settlement in November that permanently bars the company from accepting any bets from gamblers in the U.S.

While the settlement ended a civil case Hanaway filed against BetOnSports, it has no effect on the criminal case.

The federal indictment against Kaplan alleges that he founded an illegal gambling operation in New York in 1992. After being caught, he moved his operation overseas and opened BetOnSports offices in Costa Rica between 1996 and 1997, according to the indictment.

During an interview with The Associated Press this summer, Hanaway said Kaplan and others in the online gambling business purposely structure their companies to make prosecution more difficult.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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