An admitted bookie from California pleaded guilty Friday to illegal gambling and money laundering after agreeing to testify at trial against Teddy Mitchell, of Oklahoma City.
Richard Allen Hancock, 67, will be sentenced later.
He told an Oklahoma City federal judge in his plea paperwork that he entered into a plea agreement with prosecutors “to atone for my misconduct and begin a better life.”
In late January, Hancock turned over to federal agents a black duffel bag containing more than $1 million in cash, the FBI said. Hancock had stored the money bag at a lockbox business in Newport Beach, Calif.
“He's agreed to tell the truth, and that's what he did today,” said his attorney, John Coyle. “He wants to go in a different direction for the balance of his life.”
Mitchell, 58, is awaiting trial on a federal indictment that accuses him of making millions of dollars by hosting illegal high-stakes poker games at his Oklahoma City home and by illegally taking bets on sporting events.
Mitchell's attorney contends Mitchell is a professional gambler who believed he was acting legally.
The gambling case has attracted widespread public attention because Mitchell's wife, Julie, 34, was brutally beaten to death in their home in November 2010.
Teddy Mitchell was traveling out of state at the time. One of his sons found the body in a bedroom closet. Police have not arrested anyone in the death.
In court Friday, Hancock admitted he was involved with Teddy Mitchell in an illegal offshore Internet sports betting business. He also admitted sending checks from betting clients to Gortation Management, a Costa Rican shell company.
“I was a bookmaker,” he told U.S. District Judge David Russell in a clear voice.
He said he had eight to 10 subagents who worked under him. He described Mitchell as an agent “of mine with customers in Oklahoma.”
“I want to say I began in 2004,” Hancock told the judge.
In court affidavits, the FBI says that Internet gambling has become a multibillion-dollar illegal business.
“Many bookies in the United States who illegally accept sports wagers have begun using an Internet gambling website to manage the gambling activity of their clients, thus becoming ‘agents' of the Internet gambling website,” FBI Special Agent Francis J. Bowles Jr. reported in one court affidavit.
“In return for using a gambling website, a bookie agrees to pay the owners of the website a percentage of the losses they collect from their gambling clients,” the agent reported.
First to plead guilty
Hancock was indicted, along with Mitchell, in September. Also indicted were two of Mitchell's sons, his best friend and four other men.
Hancock, of Yorba Linda, Calif., was the first of the nine men to plead guilty. Others are expected to reach deals with prosecutors, too.
Hancock had faced four felony counts in the indictment. Under his agreement, he pleaded guilty to two felony counts in a new charge.
He faces up to five years in prison and a $250,000 fine on the first count — involvement in an illegal offshore Internet sports betting business.
He faces 10 years in prison and a $250,000 fine on the money laundering count.
Hancock must forfeit $1,450,000 to the federal government. He will be given credit for the $1,039,575 he already turned over to FBI and Internal Revenue Service agents in California in January.
His attorney, Coyle, said, “The use of the Internet in sports gambling is the way almost all sports gambling is conducted throughout the rest of the world. Unfortunately, it's illegal in the United States.”
The attorney said a few states, though, are allowing Internet gambling. “It's evolving,” he said.
Mitchell does not deny being involved in sports wagering. His defense attorney said Friday that Mitchell believes he acted legally because he bought a gambling stamp at the advice of the IRS.
“The IRS has what's called a gambling stamp. They told him … if he would do that and report all his income it was legal,” defense attorney Scott Adams said.
“That's what he did. He did it for 15, 20 years. … Why do they have it, and why do they tell you to buy it and report all your income and everything's fine … and then all of a sudden they say, ‘No, it's illegal?' It's our position they told him to do it and he did exactly what he was instructed to do.”