Father, mother & son plead guilty to running illegal sports gambling operation
BEAUMONT – A Beaumont businessman, his wife and son pleaded guilty to federal violations in the Eastern District of Texas, U.S. Attorney Joseph D. Brown said Tuesday.
Larry Earnest Tillery, 69; Judy Kay Tillery, 62; and Brian Tillery, 46, appeared in federal court before U.S. Magistrate Judge Keith F. Giblin to enter their pleas:
- Larry Tillery pleaded guilty to engaging in monetary transactions in property derived from specified unlawful activity and tax evasion.
- Judy Tillery pleaded guilty to structuring of financial transactions to evade reporting requirements.
- Brian Tillery pleaded guilty to engaging in monetary transactions in property derived from specified unlawful activity.
Information presented in court revealed Larry Tillery was engaged in the business of accepting illegal wagers on sporting events from 1985 until April 2017. It was his primary occupation during that time.
Tillery owned and operated Daylight Motors, a used car dealership, and Lamar Capital, a holding company for Daylight Motors, and used these two companies as a front to launder illicit proceeds from his illegal gambling enterprise.
Tillery used a website to receive and track wagers from his betting clients, allowing his bettors to place wagers on sporting events, including professional and collegiate basketball, baseball and football games.
Judy Tillery assisted her husband in laundering cash proceeds of his illegal bookmaking activities by depositing cash into her personal bank account at Beaumont Community Credit Union and then writing checks to bank accounts controlled by her husband.
She structured these cash deposits in amounts under $10,000 to evade federal currency transaction reporting requirements.
Brian Tillery, Larry Tillery’s son, aided the bookmaking enterprise by collecting money from sports bettors and making payments to bettors on behalf of his father; checking the online wagers on a regular basis to keep Larry Tillery aware of what bets were placed on which games; accepting illegal gambling funds from Larry Tillery, making wire transfers to pay illegal gambling debts for Larry Tillery; and mailing packages of currency in excess of $10,000 via the Postal Service at the request of Larry Tillery, which was derived from illegal gambling activities.
Larry Tillery knew that despite the fact he was violating Texas state and federal law, federal law nonetheless required him to register as a bookmaker with the Internal Revenue Service and to file monthly excise tax returns to report total wagers he accepted during the month. Tillery also knew he was required to pay gross wagering excise taxes of 2% on wagers he accepted each month. But, Tillery failed to report or pay any taxes to the IRS based on the wagers he accepted each month.
During September through November 2016, Larry Tillery accepted at least 450 wagers totaling $5,060,150. These wagers are subject to the 2 percent federal gross wagering excise tax and Larry Tillery evaded gross excise wagering taxes of $29,717 in September 2016, $34,423 in October 2016 and $37,063 in November 2016 for a three month total of $101,203.
Between 2011 and 2016, Tillery accepted at least $52 million in illegal wagers on sporting events. Tillery did not report these wagers to the IRS or pay gross excise taxes.
The gross wagering taxes that resulted from wagers Larry Tillery accepted between 2011 and 2016 total $1,040,000. This tax due figure includes $101,203 in gross wagering excise taxes listed above in this document for wagers accepted in September-November 2016.
The investigation traced 125 financial transactions in excess of $10,000 derived from illegal gambling that utilized the federal banking system. These financial transactions totaled more than $32 million between 2010 and 2016.
As part of the plea agreement, Larry and Judy Tillery are agreeing to forfeit $1,738,455 in cash seized during the investigation; numerous luxury watches and pieces of jewelry; and several professional sports memorabilia items. They have also agreed to a money judgment of $32,758,541, representative of illegal wagers the Tillery sports gambling enterprise during the relevant time period.
“The Tillerys ignored state and federal gambling laws, and profited tremendously from a criminal enterprise,” Brown said. “We intend to collect every bit of the money judgment that will be issued against them, and we expect Larry Tillery’s prison sentence to send a message to those who profit from illegal bookmaking.”
“For more than 30 years this family operated one of the largest illegal sports gambling and money laundering operations in the U.S.,” said Assistant Special Agent in Charge Mary Magness, Homeland Security Investigations Houston. “Today’s pleas underscore HSI’s commitment to aggressively investigate financial crimes and bring offenders to justice.”
As part of his plea agreement, Brian Tillery agrees to forfeit $241,176 in U.S. currency seized during the investigation and a residence valued at about $600,000 located on Christina Court in Beaumont. He has also agreed to a money judgment of $700,000.
Under federal statutes, Larry Tillery faces up to 10 years in federal prison. Judy Tillery and Brian Tillery each face up to five years in federal prison.