SAN DIEGO (AP) — Authorities raided two card clubs on Wednesday and made arrests in seven states as they dismembered a massive illegal gambling operation that allegedly ran card games out of Southern California mansions, took bets from Canada to Mexico and laundered $10 million through San Diego County card clubs and Las Vegas casinos.
Hundreds of federal and local agents raided Seven Mile Casino in Chula Vista and the Palomar Card Room in San Diego and seized more than $600,000 from player accounts and bank accounts, according to a statement from the U.S. attorney's office.
California's Bureau of Gambling Control issued emergency orders closing the card rooms immediately.
The clubs and their owners are charged with ignoring anti-money laundering laws, such as failing to report cash transactions over $10,000.
They were among 25 people indicted by a federal grand jury in San Diego in November. They face various charges ranging from conspiracy and illegal gambling to transportation for prostitution.
All but a handful of people were arrested Wednesday in Southern and Northern California, Arizona, Nevada, New Jersey, New Mexico, Pennsylvania and Iowa, according to the U.S. attorney's office, which will seek their extradition to San Diego.
Federal prosecutors contend that for at least two years, a bookmaking operation made millions through illegal offshore sports betting and other gaming websites and underground casinos at various locations, including rented mansions in the wealth San Diego County enclave of Rancho Santa Fe.
"Up to three times a week, some defendants held intimate high-stakes poker and blackjack games in extravagant settings that featured professional card dealers, prostitutes, chefs and waitresses," according to the U.S. attorney's office.
Four people pleaded not guilty Wednesday in San Diego to various charges involved with their alleged recruitment of clients for the gambling operation.
One defendant, Craig Kolk, works at an American Indian tribal casino at Barona, the San Diego Union-Tribune reported.
Kolk has known about the investigation for more than a year, his lawyer, Jeremy Warren, told the paper.
"The FBI should be protecting us from terrorists, not from someone hoping to make an inside straight," Warren said.
The lead defendant in the case is David "Fat Dave" Stroj of San Diego.
It wasn't immediately clear whether he was jailed. There was no public telephone listing for him in San Diego and it wasn't immediately known whether he had obtained a lawyer.
According to the U.S. attorney's office, Stroj allegedly "used financiers, a business manager, sub-agents, money runners, money couriers and debt collectors" to run a bookmaking operation that handled $2 million a month in bets and in one month last year netted him more than $500,000 in profits.
The warrant contended that Stroj had more than 360 clients and operated in San Diego, Los Angeles, Chicago, Las Vegas, South Carolina and Florida, as well as Toronto, Canada and Tijuana, Mexico.
Prosecutors contend that an estimated $10 million was laundered through bank accounts, shell companies, a Las Vegas bail bond business, the card clubs and the Wynn and Bellagio casinos in Las Vegas.
The casinos were not charged with any wrongdoing.
The bookmaking clients would write checks to the casinos or card clubs and the money would be placed in player accounts so it could be withdrawn in the form of cash or chips, authorities said.
A call to the Palomar club went unanswered Wednesday night.
A message left for a Seven Mile representative was not immediately returned. A casino statement said it looks forward to working with the "Bureau of Gambling Control to resolve all issues."