Former Owner of Ohio Gambling Supplies Store Sentenced to Prison for Running Illegal Gambling Operation, Tax Fraud and Witness Tampering
The former co-owner of R&J Partnership Ltd., doing business as Reece’s Las Vegas Supply (RLVS), a gambling supplies store located in Dayton, Ohio, was sentenced today to serve two and one-half years in prison, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
Reece Powers II, 76, was sentenced today to serve 30 months in prison following his guilty plea on March 31 to multiple federal offenses, including conspiracy to operate an illegal gambling business, operating an illegal gambling business, conspiracy to defraud the Internal Revenue Service (IRS) and witness tampering. Powers was also sentenced to three years of supervised release following his prison sentence and ordered to pay a $400 special assessment, with restitution to be determined at a later date. The charges were part of an indictment unsealed on Sept. 26, 2014. The other defendants charged in that indictment and in related cases, including Douglas A. Sanders, Jason S. Pulaski, Michael E. Gedeon, Jenifer Williams, Walter F. Dyer, Virgil D. Rockwell and Allen G. Beck, were each sentenced yesterday and today after pleading guilty to illegal gambling, obstruction of justice and tax fraud offenses.
According to court documents and statements made in court, between February 2004 and May 2011, Powers oversaw the recruitment of local non-profit charitable organizations to sponsor poker fundraisers that included casino-like card games, such as Texas Hold’em tournaments. Powers entered into arrangements with the charitable organizations to control all of the funds generated from the poker fundraisers.
These poker fundraisers were exempted from the general prohibition against games of chance under then-existing Ohio laws, subject to the requirement that all the funds received from the games of chance, after deducting only prizes paid out and necessary expenses sanctioned under law, be transferred to the charitable organization for their sole benefit and use. Powers, with the help of his co-conspirators, took a portion of the money generated from the poker fundraisers and used those funds to pay the events’ workers, among other things, in violation of Ohio law and federal gambling laws.
Powers provided false accountings to the charitable organizations of the funds received from the events and skimmed a portion of the money. Powers either supervised or personally distributed illegal cash payments to his co-conspirators and employees who worked as card dealers, cashiers, chip sellers, pit bosses, tournament directors and managers. Powers and his co-conspirators also falsely held themselves out as uncompensated volunteers at the poker fundraisers.
In 2009, Powers and Beck, a former business broker, conspired to defraud the IRS in attempting to sell RLVS. Beck previously pleaded guilty to a conspiracy charge. In Powers’ effort to evade taxes, Powers and Beck arranged the sale to make it appear as if the business and its associated real estate was sold for an amount less than its actual sale price.
In February 2010, Powers also tampered with a witness testifying before a federal grand jury by instructing the witness to testify falsely that the witness and other RLVS staffers did not get paid for working at the poker fundraisers. Pulaski, Gedeon, Williams and Dyer each pleaded guilty to committing obstruction of justice by falsely testifying before a federal grand jury that they were uncompensated volunteers at the poker fundraisers.
In addition to Powers’ sentence, U.S. District Judge Timothy Black of the Southern District of Ohio sentenced the other defendants as follows:
Sanders was sentenced to serve 12 months and one day in prison and three years of supervised release, and ordered to pay a $200 special assessment;
Pulaski was sentenced today to serve 12 months and one day in prison and three years of supervised release, and ordered to pay a $200 special assessment;
Gedeon was sentenced to serve one day in prison and three years of supervised release to include two months of home incarceration, and ordered to pay a $200 special assessment;
Williams was sentenced to serve one day in prison, three years of supervised release to include six months of home incarceration and 50 hours of community service, and ordered to pay a $200 special assessment;
Dyer was sentenced to serve one day in prison and three years of supervised release, and ordered to pay a $3,000 fine and a $300 special assessment;
Rockwell was sentenced to three years of probation, and to pay a $1,000 fine and a $100 special assessment; and
Beck was sentenced to three years of probation and 100 hours of community service, and ordered to pay a $500 fine and a $100 special assessment.
Acting Assistant Attorney General Ciraolo commended the special agents of the IRS-Criminal Investigation, who investigated the case, and Assistant Chief Jorge Almonte and Trial Attorneys Christopher P. O’Donnell and Austin L. Furman of the Justice Department’s Tax Division, who prosecuted the case. Ciraolo also thanked U.S. Attorney Carter M. Stewart of the Southern District of Ohio for the substantial assistance provided by his office.
Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found on the division’s website.