ROCHESTER, NY—U.S. Attorney William J. Hochul, Jr. announced today that Nathan Paetsch, 32, of Spencerport, NY, who was convicted of transmission of wagering information and structuring transactions to evade reporting requirements, was sentenced to five years’ probation to include eight months home detention, and 400 hours of community service by Chief U.S. District Judge Frank P. Geraci.
The defendant has already forfeited $165,000 including $22,725 in lieu of a 2011 BMW X5, $76,941 in lieu of his interest in his residence at 25 King Fisher Drive, Spencerport, and $67,197 in lieu of his interest in a residence at 218 Palmetto Dunes Circle, in Naples, Florida. The court also ordered Paetsch to satisfy a $100,000 money judgment.
Assistant U.S. Attorney Robert A. Marangola, who handled the case, stated that Paetsch’s was involved in an illegal gambling business with Joseph Ruff, his brother Mark Ruff, both of Connecticut, and Paul Borrelli of Rochester. The gambling operation involved sports betting through multiple offshore Internet gambling websites.
Specifically, Paetsch used wire communication facilities, including cellular telephones, to transmit in interstate and foreign commerce, bets, wagers and information which assisted in the placing of bets and wagers with the illegal Internet gambling business on sporting events and contests. The defendant’s involvement included transmitting information over cellular telephones to assist professional hockey players and others he recruited to place bets. Paetsch’s transmissions entitled him to receive money or credit as a result of bets and wagers. The information transmitted by the defendant crossed state lines as well as the international boundary of the United States. The information provided by Paetsch included usernames and passwords to accounts for bettors to place Internet wagers, odds on sporting events, credit limits and balances of bettors, making arrangements for the collection of cash payments from bettors in Canada, New York, New Jersey, Pennsylvania, and Florida, and bank account information to conceal payments for gambling debts owed from wagers placed with the illegal gambling business.
With respect to the structuring charges, on multiple occasions between January 2010 and June 24, 2014, Paetsch withdrew and deposited transactions from accounts at financial institutions, including but not limited to First Niagara Bank, in amounts less than $10,000. The defendant was aware that as a domestic financial institution, banks are obligated by law to report transactions in excess of $10,000. At the time that he made the transfers, Paetsch intended to evade the reporting requirements because he knew the funds involved proceeds of the illegal Internet gambling business.
Mark Ruff and Joseph Ruff were convicted and sentenced to nine years and 41 months in prison respectively. Paul Borrelli was also convicted and is awaiting sentencing on September 8, 2015 at 3:00 p.m. before Judge Geraci.
The sentencing is the culmination of an investigation conducted by the Organized Crime Drug Enforcement Task Force, which includes the Federal Bureau of Investigation, Internal Revenue Service, under the direction of Shantelle P. Kitchen, Special Agent in Charge, New York Field Office, Rochester Police Department, under the direction of Chief Michael Ciminelli, Drug Enforcement Administration, under the direction of Special Agent in Charge James J. Hunt, New York Field Division, Bureau of Alcohol, Tobacco, Firearms, and Explosives, under the direction of Special Agent in Charge Delano A. Reid, New York Field Division, Greece Police Department, under the direction of Chief Patrick Phelan, the Webster Police Department, under the direction of Acting Chief Joseph Rieger, and Monroe County District Attorney’s Office, under the direction of District Attorney Sandra Doorley.