FOR IMMEDIATE RELEASE:
Monday - February 23, 2004
RALEIGH - United States Attorney Frank D. Whitney announced that WILMINGTON LODGE NUMBER 532 OF THE BENEVOLENT AND PROTECTIVE ORDER OF ELKS, WILMINGTON, NORTH CAROLINA, pled guilty in federal court in Raleigh on Monday, February 23, 2004, to conspiring to conduct an illegal gambling business.
The organization could receive a maximum fine of $500,000.00. In accordance with the terms of its plea agreement, the organization also will forfeit to the government $500,000.00. Chief U. S. District Judge Terrence W. Boyle will schedule sentencing at a later date.
A one-count Criminal Information filed by the United States Attorney's Office charged that from in or about 1985 and continuing until February, 1999, the WILMINGTON LODGE NUMBER 532 conspired to "conduct, finance, manage, supervise, direct, and own all or part of an illegal gambling business." According to the Information and evidence presented in court: The organization placed video poker machines on its premises, located at 5102 and 5122 Oleander Drive, Wilmington, and paid cash winnings to video poker machine players, *in violation of North Carolina General Statutes. The organization had an agreement with the owner/operator of Cape Fear Music Company, Inc., of Wilmington, N. C., (Garland B. Garrett, Sr. and later Garland B. Garrett, Jr.) that cash prizes would be awarded to video poker machine players, and income generated by the games would be split between the organization and Cape Fear, according to a set ratio. Income generated by the video games was used to pay organization employees' salaries, to purchase equipment for the organization, and to pay expenses of the organization. Evidence further showed that the organization took measures to conceal the source of cash generated by video games by destroying video poker machine generated payoff coupons, tally sheets, and other records related to video game gambling generated income.
Investigation of the case was conducted by the North Carolina Division of Alcohol Law Enforcement and the Federal Bureau of Investigation. Assistant U. S. Attorney Peter W. Kellen handled the case for the government.
News releases are available on the U. S. Attorney's web page at www.usdoj.gov/usao/nce within 48 hours of release.
*Note: When a gambling business is illegal under the laws of the state in which it is operating, it becomes a violation of federal law whenever (1) it involves five or more persons conducting the business, and (2) it operates for a period of more than 30 days or has a gross revenue of $2,000.00 or more in any single day. See Title 18, United States Code, Section 1955(a).