Five men have agreed to plead guilty to federal crimes for their roles in an illegal Southern California sports betting operation that took wagers from professional athletes, authorities said Thursday.
The ring was led by Wayne Nix, 45, a former pitcher for the Oakland Athletics minor league baseball team who lives in Newport Beach.
Around 2001, Nix started using his professional sports contacts to build a gambling business, developing a client list that included unnamed professional athletes, the former ballplayer admitted in court papers.
It eventually expanded into a major enterprise that eventually employed three former Major League Baseball players as agents who recruited bettors. Password-protected accounts were set up for clients to place bets on a website run by Sand Island Sports, a company based in Costa Rica. Betting on the outcome of sporting events is legal in some states, but not California.
Nix acknowledged receiving $245.000 from a professional player and $4.000 from a Major League Baseball coach, in both cases to cover gambling losses in 2016. Both were unnamed in the court.
Another client placed a $5-million bet on the 2019 Super Bowl in Atlanta, where the New England Patriots defeated the Los Angeles Rams. A few weeks later, Nix agreed in a text exchange to reactivate the account of a sports broadcaster who told him he was refinancing his home mortgage so he could repay his gambling debts.
Nix said he also let the business manager of a professional basketball player bet up to $25,000 per NBA game.
The investigation was triggered in 2017 by two informants who provided information to the Homeland Security Investigations agency, according to an HSI application for a search warrant. One informant acknowledged that the goal of cooperating law enforcement was to avoid paying off the $6-million gambling debt.
A federal judge gave investigators permission to tap the phones of Nix and several other suspects, the warrant application says. The surveillance yielded multiple recordings of bets being placed. “Put $3,000 on Djokovic to win Wimbledon,” Nix told someone on a phone call in June 2019.
Nix and one of his partners, Edon Kagasoff, 44, of Lake Forest, agreed to plead guilty to conspiracy to operate an illegal gambling business. Nix also admitted that he failed to report $1.5 million in personal income on his 2017 and 2018 federal tax returns.
Court records did not specify whether any professional athletes used Nix’s business to bet on their own teams’ games. A spokesman for the US attorney’s office in Los Angeles declined to comment on the matter and said the investigation was continuing.
The charges come at a delicate time for America’s pro sports leagues, which have raced to embrace sports betting — and the billions that could flow from it — while trying to reassure fans that players and other insiders are not betting on games.
The four major North American leagues could generate $4.23 billion per year from legalized sports betting, according to the American Gaming Assn. Fans already can place bets at gambling operations inside stadiums and arenas from Phoenix to Chicago and Washington, DC
Teams and leagues say betting can keep fans involved with games. Betting online and or over the phone has become easier and, as one technology operator told The Times last month, “There’s a million pitches over the course of a season. You can bet on every one of them.”
The NFL this month suspended Atlanta Falcons wide receiver Calvin Ridley for at least one year after uncovering evidence that he had bet on NFL games.
Major League Baseball was made aware of the federal charges Thursday and is looking into the matter, a league official said.
The other three men who admitted to participating in the illegal betting ring were Howard Miller, 63, of Gardena; Kenneth Arsenian, 52, of Newport Beach; and Joseph Castelao, 56, of Rancho Palos Verdes.
Miller agreed to plead guilty to the operation of an illegal gambling business.
Arsenian pleaded guilty in January to the same charge, as well as filing a false tax return, money laundering and accepting money for illegal online gambling. Castelao, who owns the Sand Island Sports website, has pleaded guilty to operating an illegal gambling business.
Celebrity Financial, which ran the Sherman Oaks Check Cashing store in the San Fernando Valley, agreed to plead guilty to failure to maintain an effective anti-money laundering program, admitting that it cashed more than $18-million in checks from three clients of the betting ring.
Times staff writer Nathan Fenno contributed to this report.