Hordo Law

Criminal Indictment: Negotiated Resolution

Summary of Indictment and Media Report :
Four Canadian citizens (C. Ayre; J. Phillip; D. Ferguson; D. Mahoney) and a Costa Rican company (Bodog Entertainment S.A., d/b/a/ Bodog.com) were indicted in February 2012 by a federal grand jury in Baltimore, Maryland. They were charged with being the founder and 3 operators who conducted an illegal gambling business involving online sports betting in Maryland between June 2005 and January 2012. They were also charged with conspiracy to commit money laundering by moving funds to accounts in Switzerland, England, Malta, Canada and elsewhere between those dates. It was alleged that the accused had paid more than $42M for marketing campaigns and had directed payment processors to send at least $100M to gamblers in Maryland by check and wire transfer. Government suggests its claims may be as much as $250M. Seizures of more than $66M had been made from payment processors based on indictments. In addition the Bodog.com domain had been seized and its operation suspended. The individuals each faced a maximum sentence on the gambling count of 5 years imprisonment and 20 years on the money laundering count. Bodog.S.A. faced fines of $500K on each count and forfeiture of its domain name.
Successful Resolution Summary:
After more than 5 years of negotiations both counts of the indictment against Ayre, Phillip, Ferguson and Maloney, as well as against Bodog Entertainment Group SA, were dismissed by the Maryland court on application by the U.S. government.

None of the indicted individuals was ever held in custody. None ever had to submit to questioning by attorneys for the U.S. government. None was ever required to be physically present in a U.S. courtroom.

The domain bodog.com was transferred from forfeiture “to Ayre or his designee” for a minimal amount.

Detailed Chronology of Negotiation:
  1. February 2012 - Vancouver criminal counsel retained to handle potential extradition requests: R Peck, Q.C. (Ayre and Phillip), D. Martin (Ferguson), and I. Donaldson, Q.C. (Maloney).
  2. March 2012 - U.S. Counsel retained to handle defense and negotiations: J. Henderson (San Francisco) for Phillip, Ferguson and Mahoney; B. Slotnick (New York) for Ayre, Negotiations begin with AUSA Kay.
  3. April 2012- R Hordo Q.C. retained by Ayre to monitor U.S. negotiations (strategy/developments) being conducted by Henderson/Slotnick as well as to defend any attacks on Ayre’s personal interests in B.C.
  4. November 2012 -Hordo’s role expanded to be lead negotiator for Ayre with responsibility to recommend reorganization of US/CAD counsel team.
  5. December 2012- B. Boss (Washington D.C. ) retained by Ayre to assist Hordo in negotiations concerning potential resolution of the criminal case.
  6. January 2013 - B. Slotnick’s active services suspended but kept available as/when needed. Boss becomes Ayre’s U.S defense counsel. Negotiations previously started by Henderson/Slotnick with AUSA Kay taken over by Hordo, assisted by Boss. Hordo begins discussions with Antigua government, and with Boss’ assistance, main DOJ and USTR.
  7. April-May 2013- U.S. counsel team further reorganized. Henderson’s retainer terminated. J. Ifrah (Washington D.C.) retained for Phillip, Ferguson and Maloney.
  8. September 2013- Bodog.com domain forfeited to U.S. without formal challenge. Negotiations continue into 2014.
  9. August 2014- Plea agreement in principle reached with AUSA Kay involving a $38M payment to be made to Antigua, the base of online gaming operations using Bodog.com, to compensate Antigua for revenues lost by activities lawful in Antigua where Ayre resides; $12M payment to be made to U.S.; Bodog Entertainment S.A. to plead guilty; and indictment counts against all individual defendants to be dismissed. Approved by DHS pending approval by U.S. Attorney (MD) R. Rosenstein.
  10. September 2014- Rosenstein refuses to approve a corporate plea in exchange for dismissal of individuals based on interpretation of DOJ resolution policy. As a consequence, negotiations continue into 2015.
  11. January 2015 to October 2016- negotiations result in a revised agreement, substantially similar to 2014 agreement, being prepared by Kay with express language that the payment to Antigua is to resolve a WTO claim against the U.S.. Hordo and Boss meet with senior officials from the Criminal Division and the Chief Deputy U.S. Attorney in Maryland. They also communicate with main DOJ in Washington to try to persuade them that the WTO provision constitutes “special circumstances” under DOJ resolution policy guidelines. Hordo and Boss are told that Deputy Attorney General Yates has given Rosenstein a green light to approve or disapprove the deal. Rosenstein does neither.
  12. November 2016- dramatic U.S. election result that will lead to different leadership at the DOJ and USTR (and customarily a new U.S. Attorney in Maryland). Hordo proposes to Kay a resolution that would involve a misdemeanor plea by Ayre in exchange for dismissal of the indictments against Ayre and the other defendants. Terms of this proposal are substantially similar to those finally agreed upon.
  13. December 2016 - Kay retires and his supervisor (E. Shea) assumes conduct of all matters.
  14. March 2017- Shea advises Hordo and Boss that his office will accept the 2016 proposed deal with some caveats. Major caveat is unwillingness to exchange indictment dismissals for Ayre’s plea to a misdemeanor in a plea agreement. Further negotiations follow to try to secure dismissals for the other indicted individuals.
  15. April 2017- Shea applies for leave to dismiss indictment counts against Phillip, Ferguson and Mahoney. Court approves those dismissals.
  16. June 2017- U.S. files a Misdemeanor Information against Ayre with a single count of”… being an accessory after the fact of transmission of gambling information”. Shea prepares a formal Plea Agreement that is then signed by both Ayre and the government. Ayre confirms in the Plea Agreement that he has never made and will not make any claim to the $66M seized by the government from payment processors.
  17. July 2017- $100K paid by successor company of Bodog Entertainment SA to government to stand as substitute property for the bodog.com domain. Court signs order granting consent motion by government authorizing substitution of property. Bodog.com is then transferred by government to “Ayre or his designee”.

    Ayre attends a telephone hearing with Hordo, from Hordo’s Vancouver law office. Boss attends in the courtroom in Baltimore. As agreed, Ayre pleads guilty to the misdemeanor count.

    Chief Judge Blake (USDC MD) approves the Plea Agreement and sentences Ayre to the agreed fine of $500k and imposes the greed 1 year non custodial sentence of unsupervised probation.

    The fine is paid immediately and four days later the government, enters an Order dismissing all indictment against both Ayre and Bodog Entertainment Group S.A..