Danvers Man Pleads Guilty to Running Illegal Gambling Operation
John Gianelli Sr. reportedly laundered $452,000 between 2003 and 2007.
A Danvers man who reportedly ran an online sports betting business pleaded guilty to money laundering, gambling and tax charges in U.S. District Court in New Hampshire last week.
John Giannelli St., 66, pleaded guilty on Sept. 27 to one count of money laundering, one count of operating an illegal gambling business and five counts of impeding the administration of Internal Revenue Service laws, U.S. Attorney John P. Kacavas announced Wednesday.
According to an offer of proof made by prosecutors at the change of plea hearing, Giannelli operated a computer based sports betting business while he lived in Peabody and Kingston, New Hampshire. He controlled access to a gambling site and granted access to that site to numerous agents or partners through the use of user identifications and passwords. Customers making sports wagers were able to gain access to the site through the agents or partners, and Giannelli was able to monitor the overall betting activity, according to the U.S. Attorney's Office.
The money laundering charges reported arose from a scheme in which Giannelli was listed as an employee on a former sports betting customer's business. He provided the business with cash proceeds generated from the gambling business, and in return, the business issued paychecks to Giannelli, making it appear that his income was legitimate. The business also generated false W-2 forms that Giannelli used to support tax returns filed with the IRS. Between 2003 and 2007, the U.S. Attorney's Office said Giannelli laundered approximately $452,000 in proceeds through this scheme.
Giannelli is scheduled to be sentenced on Jan. 3, 2013. He faces a statutory maximum penalty of 20 years on the money laundering charge, five years on the gambling charge, and three years on each of the five tax charges.
The investigation was conducted by the Federal Bureau of Investigation and the Internal Revenue Service.