Two Ohio Men Sentenced for Operating Illegal Gambling Businesses and Tax Fraud Conspiracy

Two Ohio men were sentenced to prison today for tax, gambling, money laundering, conspiracy and obstruction crimes arising out of their ownership and operation of illegal gambling businesses.

Christos Karasarides Jr. was sentenced to serve 262 months in prison and three years of supervised release, to pay $5,541,520 in restitution to the United States and to forfeit his residence and $419,768 in cash.

Ronald DiPietro was sentenced to 112 months in prison and three years of supervised release and ordered to pay $4,763,520 in restitution to the United States. A jury previously convicted Karasarides and DiPietro.

According to evidence presented at trial, court documents and statements made in court, from 2009 through July 2018, Karasarides and DiPietro, who was then a Certified Public Accountant, operated multiple illegal gambling businesses together and with others including Skilled Shamrock and Redemption. At Skilled Shamrock, which operated slot machines, patrons gambled more than $34 million between 2012 and 2017 from which the business made more than $7 million in profits. Karasarides and DiPietro sought to conceal their ownership of the gambling businesses by using nominee owners and sham contracts.

Karasarides did not report or pay taxes on much of the income he received from Redemption and Skilled Shamrock. From 2012 through 2018, Karasarides did not report $2.3 million in such income or pay over $800,000 in tax.

Separately from Skilled Shamrock and Redemption, Karasarides owed the IRS millions of dollars in taxes from income he earned from another gambling business. DiPietro assisted Karasarides in thwarting the IRS’ efforts to collect the taxes owed by making false representations to the IRS – including by preparing tax returns for Karasarides – showing that Karasarides did not have the assets or income to pay his taxes. Evidence at trial also showed that Karasarides sought to make it more difficult for the IRS to seize his home by using a straw purchaser to disguise his ownership of it.

In total, Karasarides caused a tax loss to the IRS of $5.4 million and DiPietro caused a tax loss to the IRS of $4.7 million. 

Karasarides and DiPietro used the criminal proceeds of their schemes to purchase luxury vehicles, maintain country club memberships and buy and sell property. Karasarides also took several extravagant gambling trips during which he made millions of dollars of bets at legal casinos throughout the country. Karasarides and DiPietro also kept large amounts of cash or silver at their homes and other properties they controlled. For instance, law enforcement seized more than $150,000 in cash from Karasarides’ house and $239,000 in cash from a safe deposit box in the name of Karasarides’ son.

Karasarides attempted to obstruct the investigation into his conduct. After a witness received a grand jury subpoena, Karasarides directed that witness to lie to authorities. Karasarides also caused false documents to be created to obstruct the investigation. And in 2022, after some of Karasarides’ co-defendants had been indicted, Karasarides caused another individual to file tax returns that falsely claimed that the individual was a partner in a business when, in fact, Karasarides was the partner in the business.   

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Rebecca C. Lutzko for the Northern District of Ohio made the announcement.

IRS Criminal Investigation, the Department of Homeland Security’s Homeland Security Investigations, the Department of Treasury’s Office of Inspector General, the Stark County Prosecutor’s Office, the Ohio Casino Control Commission and Ohio Organized Crime Investigations Commission-Major Crimes Task Force are investigating the case.

Trial Attorneys Sam Bean and Hayter Whitman of the Justice Department’s Tax Division and Assistant U.S. Attorney David Toepfer for the Northern District of Ohio prosecuted the case.

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Source: Justice.gov