The former co-owner of R&J Partnership Ltd., doing
business as Reece’s Las Vegas Supply (RLVS), a gambling supplies store located
in Dayton, Ohio, was sentenced today to serve two and one-half years in prison,
announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice
Department’s Tax Division.
Reece Powers II, 76, was sentenced today to serve 30 months
in prison following his guilty plea on March 31 to multiple federal offenses,
including conspiracy to operate an illegal gambling business, operating an
illegal gambling business, conspiracy to defraud the Internal Revenue Service
(IRS) and witness tampering. Powers was
also sentenced to three years of supervised release following his prison
sentence and ordered to pay a $400 special assessment, with restitution to be
determined at a later date. The charges
were part of an indictment unsealed on Sept. 26, 2014. The other defendants charged in that
indictment and in related cases, including Douglas A. Sanders, Jason S.
Pulaski, Michael E. Gedeon, Jenifer Williams, Walter F. Dyer, Virgil D.
Rockwell and Allen G. Beck, were each sentenced yesterday and today after
pleading guilty to illegal gambling, obstruction of justice and tax fraud
offenses.
According to court documents and statements made in court,
between February 2004 and May 2011, Powers oversaw the recruitment of local
non-profit charitable organizations to sponsor poker fundraisers that included
casino-like card games, such as Texas Hold’em tournaments. Powers entered into arrangements with the
charitable organizations to control all of the funds generated from the poker
fundraisers.
These poker fundraisers were exempted from the general
prohibition against games of chance under then-existing Ohio laws, subject to
the requirement that all the funds received from the games of chance, after
deducting only prizes paid out and necessary expenses sanctioned under law, be
transferred to the charitable organization for their sole benefit and use. Powers, with the help of his co-conspirators,
took a portion of the money generated from the poker fundraisers and used those
funds to pay the events’ workers, among other things, in violation of Ohio law
and federal gambling laws.
Powers provided false accountings to the charitable
organizations of the funds received from the events and skimmed a portion of
the money. Powers either supervised or
personally distributed illegal cash payments to his co-conspirators and
employees who worked as card dealers, cashiers, chip sellers, pit bosses,
tournament directors and managers.
Powers and his co-conspirators also falsely held themselves out as
uncompensated volunteers at the poker fundraisers.
In 2009, Powers and Beck, a former business broker,
conspired to defraud the IRS in attempting to sell RLVS. Beck previously pleaded guilty to a
conspiracy charge. In Powers’ effort to
evade taxes, Powers and Beck arranged the sale to make it appear as if the
business and its associated real estate was sold for an amount less than its
actual sale price.
In February 2010, Powers also tampered with a witness
testifying before a federal grand jury by instructing the witness to testify
falsely that the witness and other RLVS staffers did not get paid for working
at the poker fundraisers. Pulaski,
Gedeon, Williams and Dyer each pleaded guilty to committing obstruction of
justice by falsely testifying before a federal grand jury that they were
uncompensated volunteers at the poker fundraisers.
In addition to Powers’ sentence, U.S. District Judge Timothy
Black of the Southern District of Ohio sentenced the other defendants as
follows:
Sanders was
sentenced to serve 12 months and one day in prison and three years of
supervised release, and ordered to pay a $200 special assessment;
Pulaski was
sentenced today to serve 12 months and one day in prison and three years of
supervised release, and ordered to pay a $200 special assessment;
Gedeon was
sentenced to serve one day in prison and three years of supervised release to
include two months of home incarceration, and ordered to pay a $200 special
assessment;
Williams was
sentenced to serve one day in prison, three years of supervised release to
include six months of home incarceration and 50 hours of community service, and
ordered to pay a $200 special assessment;
Dyer was sentenced
to serve one day in prison and three years of supervised release, and ordered
to pay a $3,000 fine and a $300 special assessment;
Rockwell was
sentenced to three years of probation, and to pay a $1,000 fine and a $100
special assessment; and
Beck was sentenced
to three years of probation and 100 hours of community service, and ordered to
pay a $500 fine and a $100 special assessment.
Acting Assistant Attorney General Ciraolo commended the
special agents of the IRS-Criminal Investigation, who investigated the case,
and Assistant Chief Jorge Almonte and Trial Attorneys Christopher P. O’Donnell
and Austin L. Furman of the Justice Department’s Tax Division, who prosecuted
the case. Ciraolo also thanked U.S.
Attorney Carter M. Stewart of the Southern District of Ohio for the substantial
assistance provided by his office.
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