Family gets fed time for money laundering
A Beaumont businessman, his wife, and son have been sentenced for federal violations in the Eastern District of Texas, announced U.S. Attorney Stephen J. Cox last week.
Larry Earnest Tillery, 70, Judy Kay Tillery, 63, and Brian Tillery, 47, all of Beaumont, pleaded guilty on June 25, 2019 to federal charges and were sentenced today by U.S. District Judge Thad Heartfield.
Larry Tillery pleaded guilty to engaging in monetary transactions in property derived from specified unlawful activity and tax evasion. Today he was sentenced to 33 months in federal prison. Tillery was ordered to pay restitution in the amount of $1,000,040.00 and to forfeit approximately $2 million in cash, jewelry, and sports memorabilia that were proceeds of his illegal gambling enterprise. A money judgment of $32,758,541.00 was also ordered by the court.
Judy Tillery pleaded guilty to structuring of financial transactions to evade reporting requirements and was sentenced to serve two years federal probation. Judy Tillery shares the forfeiture judgment with her husband.
Brian Tillery pleaded guilty to engaging in monetary transactions in property derived from specified unlawful activity and was sentenced to two years of federal probation. Brian Tillery was ordered to forfeit approximately $245,477.00 and a residence on Christina Court in Beaumont with an appraised value of approximately $600,000.00 that was determined to be proceeds of the illegal gambling enterprise. Additionally, a money judgment of $700,000.00, which represents the proceeds of the illegal gambling enterprise.
According to information presented in court, Larry Tillery was engaged in the business of accepting illegal wagers on sporting events from 1985 until April - 2017. 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.
Larry 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 assisted her husband in laundering cash proceeds of his illegal gambling activities by depositing cash into her personal bank account at Beaumont Community Credit Union in Beaumont, Texas, and then writing checks to bank accounts controlled by her husband. Judy Tillery structured these cash deposits in amounts under $10,000 in an attempt to evade federal currency transaction reporting requirements.
Brian Tillery, Larry Tillery’s son, aided the bookmaking enterprise by collecting money from sports bettors; making payments to bettors on Larry’s behalf; checking the online wagers on a regular basis to make Larry aware of what bets were placed on which games; accepting illegal gambling funds from Larry and making wire transfers to pay illegal gambling debts for Larry; and mailing packages of currency in excess of $10,000 – derived from illegal gambling activities – via the United States Postal Service at the request of Larry.
Larry Tillery knew that despite the fact he was violating Texas state and federal law, federal tax 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. Larry also knew that he was required to pay gross wagering excise taxes of 2% on wagers he accepted each month, but he failed to report or pay taxes to the IRS based on the wagers he accepted each month. From September through November of 2016, Larry Tillery accepted at least 450 wagers totaling $5,060,150. These wagers are subject to the 2% federal gross wagering excise tax, and Larry 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, Larry Tillery accepted at least $52 million in illegal wagers on sporting events. Larry 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.
The investigation traced a total of 125 financial transactions in excess of $10,000 derived from illegal gambling that utilized the United States banking system. These financial transactions total $32,383,841 and occurred between 2010 and 2016.
“These sentences imposed today on the Tillery family demonstrate the Department’s commitment to hold criminal enterprises accountable,” said U.S. Attorney Stephen J. Cox. “Illegal gambling activity and tax evasion will not be tolerated in the Eastern District of Texas.”
“Today’s sentencing and forfeiture order are the culmination of a six-year multi-agency criminal investigation into one of the largest illegal sports gambling and money laundering operations in U.S. history,” said Mark Dawson, special agent in charge of Homeland Security Investigation (HSI) Houston. “Working together with our federal partners, we have successfully disrupted the Tillery family criminal enterprise and sent a message that we are united in our efforts to investigate and prosecute financial crimes.”
“Most individuals file truthful and accurate tax returns voluntarily and pay their fair share of taxes," said Gerardo Gomez, Acting Assistant Special Agent in Charge, IRS Criminal Investigation. "IRS Special Agents will continue to investigate individuals like Mr. Tillery, who gain illicit profits and evade their taxes at the expense of law-abiding taxpayers.”
This case was investigated by Homeland Security Investigations and the Internal Revenue Service, Criminal Investigation, and is being prosecuted by Assistant U.S. Attorney Joseph R. Batte.
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