FOR IMMEDIATE RELEASE:
Wednesday - September 22, 2004
RALEIGH - DAVID R. (RICKY) GODWIN and his son, DAVID R. (RICKY) GODWIN, JR., pled guilty on August 15, 2003, to operating an illegal gambling business in the Eastern District of North Carolina, in violation of federal law and the North Carolina General Statutes.* DAVID R. GODWIN also pled guilty to structuring financial transactions in order to evade currency reporting requirements of the Internal Revenue Service. The charges and guilty pleas--part of an ongoing federal and state investigation into illegal video poker in North Carolina known as "Operation Double Black Diamond"--were announced at a news conference in Raleigh on Wednesday, September 22, 2004, by Frank D. Whitney, United States Attorney for the Eastern District of North Carolina; Gretchen C. F. Shappert, United States Attorney for the Western District of North Carolina; Kevin B. Kendrick, Special Agent in Charge of the Charlotte Division, Federal Bureau of Investigation; Charles E. Hunter, Special Agent in Charge of the Criminal Investigation Division, Internal Revenue Service; Michael D. Robertson, Director of the North Carolina Division of Alcohol Law Enforcement; and Charles R. Reavis, United States Marshal for the Eastern District of North Carolina.
The Criminal Informations and the Plea Agreements filed on August 15, 2003, had been under seal until Wednesday while the investigation proceeded.
DAVID R. (RICKY) GODWIN, 57, of 4985 Glendale School Road, Kenly, N. C., faces a maximum sentence of 15 years of imprisonment, fines totaling $750,000.00, and three years of supervised release (five years imprisonment, a fine of $250,000.00, and three years of supervised release on the gambling charge, and 10 years imprisonment, a fine of $500,000.00, and three years of supervised release on the structuring charge). In addition, he will forfeit to the United States $5,000,000.00 in currency, which represents the value of the money involved in his illegal gambling business and his unlawful structuring of currency transactions. Also, he will forfeit to the government 326 video game machines.
DAVID R. (RICKY) GODWIN, JR., 33, of 424 Batten Pond Road, Selma, N. C., faces a maximum sentence of five years imprisonment, a fine of $250,000.00, and a supervised release term of three years. Also, he will forfeit to the United States $200,000.00 in currency, which represents the value of real and personal property, including money, involved in his illegal gambling business.
The actual sentences will be determined in accordance with the United States Sentencing Guidelines and without parole. Chief U. S. District Judge Terrence W. Boyle has not scheduled a sentencing date.
According to the Criminal Informations and evidence presented in court, from approximately April, 1998, until June 17, 2002,DAVID R. (RICKY) GODWIN, a prominent businessman in Johnston County, assisted by his son, DAVID R. (RICKY) GODWIN, JR., was one of the largest operators of illegal video poker machines in the state, prior to a search of his business by the FBI, with assistance from NC-ALE and the U. S. Marshals Service. He illegally operated more than 300 video poker machines in more than 20 locations, under the business names of Raleigh Amusements and Godwin Music Company, two subsidiaries of his wholly-owned enterprise, RGB, Inc. Investigation by the FBI and IRS showed that GODWIN structured more than $5 million in deposits, including the proceeds of his illegal gambling enterprise, through his accounts at the Selma branch of First Citizens Bank and Trust Company.
"Operation Double Black Diamond," a five-year joint federal and state investigation, has already resulted in the convictions of Garland Bennett Garrett, Jr., former North Carolina Secretary of Transportation (sentenced to five months imprisonment/five months in a half-way house, a $5,000.00 fine, and two years of supervised release); his son, Garland Bennett "Trey" Garrett III (sentenced to two years probation and 120 hours of community service); Cape Fear Music Company, Inc., owned by the Garrett family (forfeited $750,000.00); Pedroland, Incorporated, operating as Silver Slipper Arcade, located in Robeson County, N. C., and Dillon County, S. C. (forfeited $400,000.00); Wilmington Elks Lodge #532 (fined $100,000.00 and forfeited $500,000.00); and James Bradley Reaves III (guilty plea entered, awaiting sentencing, will forfeit $400,000.00). The total forfeitures to date are $7,250,000.00--all proceeds of the illegal industry--illustrating the enormity of the problem. The investigation will continue.
While video poker gambling for cash pay-outs is a misdemeanor under North Carolina law, the large-dollar nature of illegal video poker (if it exceeds $2,000.00 in a single day) and/or its continuing nature (if it operates for more than 30 days) makes it a federal felony (18 USC 1955). In addition, knowingly receiving the proceeds of illegal video poker for the purpose of promoting the ongoing illegal enterprise constitutes the federal felony of laundering monetary instruments (18 USC 1956). Those aiding and abetting or conspiring to assist ongoing illegal video poker are as culpable as those actually operating the illegal enterprise.
The harm that can emanate from illegal video poker was demonstrated by some facts discussed at the recent sentencing of the Wilmington Elks Lodge in Judge Boyle's court. During the 15 years of operation of illegal video poker at the Elks Lodge, the lodge reaped about $1 million from video poker, and Cape Fear Music Company, Inc. (Garland B. Garrett's company) netted about $800,000.00. Meanwhile, at least two lives were ruined. One heavy user reportedly lost his business and residence due to large gambling losses. Another actually embezzled between $9,000.00 and $20,000.00 from the Elks Lodge to cover the losses he sustained.
Investigation of the case was conducted by the Federal Bureau of Investigation, the Criminal Investigation Division of the Internal Revenue Service, and the North Carolina Division of Alcohol Law Enforcement, with assistance by the United States Marshals Service. Assistant U. S. Attorney Dennis M. Duffy and Executive Assistant U. S. Attorney John Stuart Bruce are handling the case for the Eastern District of North Carolina. Former Assistant U. S. Attorney Peter W. Kellen supervised the investigation from its initiation until his recent retirement. Also, United States Attorney Gretchen C. F. Shappert participated in this investigation as an Assistant U. S. Attorney in Charlotte and is involved in the continuing aspects of the investigation in the Western District of North Carolina.
*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).
News releases are available on the U. S. Attorney's web page at www.usdoj.gov/usao/nce within 48 hours of release.