O.C. man must pay $3M and go on probation for illegal sports betting operation

Edon Kagasoff, a 45-year-old Orange County man from Lake Forest, was sentenced on Wednesday to six months probation and ordered to forfeit $3 million for helping run an illegal bookmaking business that former L.A. Dodgers outfielder Yasiel Puig was also allegedly caught up in.

Kagasoff pleaded guilty last year to a federal charge of conspiring to run the gambling operation.

The owner of the online gambling business and website pleaded guilty on April 11, 2022 and admitted the business was illegal under California law because it involved at least five people, operated for at least six years, and often had gross revenue of well over $2,000 on a single day.

Four cases and related plea agreements were unsealed on March 10, 2022 against:

• Wayne Nix, 45, of Newport Coast, a former minor league baseball player, who was charged with one count of conspiring to operate an illegal sports gambling business, and one count of filing a false tax return;
• Edon Kagasoff, 44, of Lake Forest, Nix’s longtime partner in the operation, who was charged with one count of conspiring to operate an illegal sports gambling business;
• Howard Miller, 63, of Gardena, who was charged with one count of aiding and abetting the operation of an illegal sports gambling business by assisting in the collection and payout of gambling proceeds related to the Costa Rica-based website; and
• Celebrity Financial LLC, dba Sherman Oaks Check Cashing, which was charged with failing to maintain an effective money laundering program related to it cashing at least $18 million in checks from the illegal sport gambling business at its San Fernando Valley check cashing store.

Representatives of Celebrity Financial appeared in court on March 28. Nix made his first court appearance Wednesday afternoon, and he is scheduled to formally enter his guilty plea on April 11. Miller has agreed to appear in court this afternoon, and Kagasoff has agreed to appear in court on Friday.

The Justice Department also announced that earlier in March of 2022 that the court unsealed cases against two other defendants:

• Kenneth Arsenian, 52, of Newport Beach, who pleaded guilty on January 26 to four charges: operating an illegal sports gambling business, filing a false tax return, money laundering, and accepting a financial instrument for unlawful internet gambling; and
• Joseph Castelao, 56, of Rancho Palos Verdes, the owner of the gambling website – Sand Island Sports – who pleaded guilty on March 15 to operating an illegal gambling business.

According to the court documents made public in March of 2022, Nix began operating a bookmaking business about 20 years ago. Through his contacts in the sports world, Nix developed a client list that included current and former professional athletes, and he employed three former Major League Baseball players to assist with the business.

Kagasoff joined Nix in the gambling operation around 2014, and they used an online infrastructure and calling center operated by Sand Island Sports to create accounts for bettors, according to court documents, which note that Nix and his associates paid winning bets and retained nearly all of the money collected from bettors.

Nix’s plea agreement outlined specific incidents related to the betting scheme, including receiving payments for gambling losses from a professional football player, a Major League Baseball coach and a baseball analyst. The plea agreement also discusses a bettor who wagered $1 million a year with Nix’s operation, a $5 million bet on the 2019 Super Bowl, and a sports broadcaster who told Nix he was going to refinance his home to pay off gambling debts.

In relation to the tax count against him, Nix admitted receiving $1,466,947 in income that he failed to report on his 2017 and 2018 federal income tax returns. In his plea agreement, Nix agreed to pay all back taxes due for those years – a total of $1,248,429, which includes the back taxes, penalties and interest. Nix also agreed to forfeit to the government nearly $1.3 million seized in February 2020 from two bank accounts and two brokerage accounts he controlled.

When Arsenian pleaded guilty in January, he admitted failing to report to the IRS more than $2.8 million in income for the years 2015 through 2018. Arsenian has agreed to pay $1.1 million in back taxes, plus additional penalties and interest. Arsenian also agreed to forfeit $341,459 in United States currency seized from his residence in February 2020.

In its plea agreement, Sherman Oaks Check Cashing admitted that it encouraged customers to bring large business checks – far in excess of the $10,000 that normally triggers a Currency Transaction Report (CTR) to federal authorities – and employees of the company told customers that it would not file CTRs. As a result, many of its customers brought checks that were proceeds of unlawful activity, including two customers of the gambling operation who cashed at least $18.35 million in checks. Sherman Oaks Check Cashing admitted that it made at least $500,000 in profits by engaging in this activity. In its plea agreement, the company agreed to pay a $500,000 fine, which is the maximum penalty under the law.

Puig, 32, who most recently played professional baseball in South Korea, will go on trial next January in downtown L.A. on one federal count each of making false statements and obstruction of justice.

Prosecutors allege that Puig began placing bets on sporting events in May 2019 through a third party. Bets were funneled to Sand Island Sports, a Costa Rica-based online sportsbook, according to the U.S. Attorney’s Office.

Homeland Security Investigations (HSI) and IRS Criminal Investigation conducted the investigation in this matter. The HSI agents are part of the El Camino Real Financial Crimes Task Force.

Assistant United States Attorneys Jeff Mitchell of the Major Frauds Section and Dan Boyle of the Asset Forfeiture Section are prosecuting these cases.