Metro Roundup: 11 Indicted in tax evasion, money laundering scheme; Trussville properties in indictment

A federal grand jury indictment has charged 11 defendants from across the United States in a multimillion-dollar wagering excise tax evasion scheme, and multiple Trussville properties are listed in the indictment.

 A 114-count indictment filed in U.S. District Court charges the defendants as being involved in management of a multimillion dollar wagering excise tax evasion scheme involving an illegal sports-betting organization.

According to the indictment, Timothy Pughsley of Birmingham began operating a bookmaking business at least 17 years ago. The organization eventually became known as “Red44,” and bookmaking and betting activities occurred online via an offshore server located in Costa Rica. Defendants named within the indictment are alleged to be senior agents in the Red44 organization or original founding members.

Regarding the tax counts against the defendants, the indictment alleges that the organization was estimated to have accepted hundreds of millions of dollars in wagers from bettors from 2019 through 2021. In 2019, the Red44 organization was alleged to have earned a gross profit of $14,930,787. The excise tax owed to the Internal Revenue Service, or two percent of total wagers placed by bettors, would be $6,882,460.46 for 2019 alone. In 2020, the organization had income of approximately $24 million. The excise tax owed to the IRS for this year would total approximately $6 million. Further, in 2021, the organization had income of approximately $36 million. The excise tax owed to the IRS for 2020 would total more than $7 million.

Here is a list of those charged and the charges they face: 

• Timothy J. Pughsley, 51, of Birmingham is charged with 38 counts of tax evasion, one count of conspiring to operate an illegal sports-betting organization, one count of conspiring to commit money laundering, and four counts of money laundering.
• Christopher Burdette, 30, of Chelsea is charged with six counts of tax evasion, one count of conspiring to operate an illegal sports-betting organization, one count of conspiring to commit money laundering, and one count of money laundering.
• Nathanael Burdette, 36, of Birmingham is charged with six counts of tax evasion, one count of conspiring to operate an illegal sports-betting organization, one count of conspiring to commit money laundering, and two counts of money laundering.
• Jonathan Lind, 44, of Birmingham is charged with six counts of tax evasion, one count of conspiring to operate an illegal sports-betting organization, one count of conspiring to commit money laundering, and two counts of money laundering.
• Thomas V. Zito, 57, of Vestavia Hills is charged with six counts of tax evasion, one count of conspiring to operate an illegal sports-betting organization, one count of conspiring to commit money laundering, and one count of money laundering.
• Christopher Donaldson, 46, of Trussville is charged with one count of conspiring to operate an illegal sport-betting organization and one count of conspiring to commit money laundering.
• Gary L. Rapp, Jr., 44, of Lakeland, Tennessee, is charged with six counts of tax evasion, one count of conspiring to operate an illegal sports-betting organization, one count of conspiring to commit money laundering, and two counts of money laundering.
• Mark Giaquinto, 50, of Upton, Massachusetts, is charged with six counts of tax evasion, one count of conspiring to operate an illegal sports-betting organization, one count of conspiring to commit money laundering, and two counts of money laundering.
• Matthew D. Voorhees, 47, of Englewood, Colorado, is charged with six counts of tax evasion, one count of conspiring to operate an illegal sports-betting organization, one count of conspiring to commit money laundering, and two counts of money laundering.
• David Richards, 38, of Las Vegas, Nevada, is charged with six counts of tax evasion, one count of conspiring to operate an illegal sports-betting organization, one count of conspiring to commit money laundering, and two counts of money laundering.
• Joshua Gentrup, 36, of Athens, Georgia, is charged with six counts of tax evasion, one count of conspiring to operate an illegal sports-betting organization, one count of conspiring to commit money laundering, and two counts of money laundering.

Nine properties included in the indictment are located within the Trussville Entertainment District, including addresses where Ferus Artisan Ales, Pinchgut Pies and Mexicali Blues are located. The properties are to be forfeited due to at least one of the defendants in the case being a past investor in the group that owns the properties. It is not believed that operations of the affected properties will be disrupted right now. 

IRS Criminal Investigations and Homeland Security Investigations investigated the case. Assistant United States Attorneys Catherine Crosby, Kristen Osborne, and Ryan Rummage are prosecuting the case.

An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.