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Courts and Crime


N.J. cos. that supplied internet cafes admit to criminal charges in Ohio
VS2 and associates also agree to stay out of the state
by WKSU's M.L. SCHULTZE


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M.L. Schultze
 
A half dozen internet cafes were raided in April, and the companies that supplied their software and hardware have admitted to criminal charges.
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A New Jersey company has pleaded guilty to racketeering charges and has promised to stop trying to do business in Ohio. WKSU’s M.L. Schultze reports that it’s one more big blow to the dwindling hopes of internet cafes throughout the state.

LISTEN: First the referendum failure, now the guilty pleas

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For years, internet cafes and sweepstakes parlors insisted they weren’t gambling fronts. But Ohio Attorney General Mike DeWine, Cuyahoga County law enforcement officials and even an appeals court disagreed. And a half-dozen of the cafes were raided in April. The hardware and software at many of those cafes were supplied by VS2 Worldwide Communications and P&E Technologies.

Now those two companies and three men associated with them have pleaded guilty to charges of attempted racketeering, gambling and possessing criminal tools.

Joe Frolik of the Cuyahoga County prosecutor’s office says the companies also agreed to leave Ohio.

“What they did say in court is that they believe what they were doing was legal but that, with the failure of the ability to get a referendum on the ballot they would have left Ohio anyway, so that this was just basically a business decision to cut their losses. We always believed that the law was on our side, that this was a criminal enterprise, this was illegal gambling that they were facilitating.”

A tough year
The referendum Frolik is referring to is the failed attempt to get an issue on the November 2014 ballot that would have overturned a new state law that forbids the cafes from paying out any cash—period – and prizes must be worth less than $10.

Dan Tierney, a spokesman for the attorney general office, says it was important to pursue the criminal case even under the old law because there’s always someone looking for a new way to run a gambling business.

“We see new types of games every so often that they’ll put a computer out there and say, ‘Well it’s not a slot machine, it’s this.’ And our job as law enforcement individuals is to make sure those claims are true. And if they’re not and if they’re violating the gambling laws of the state of Ohio, we’ll have investigations and prosecutions such as the one we saw with VS2."

VS2 could not be reached for comment. About a dozen other smaller cases connected with the internet cafes raided in April are pending and have hearings scheduled in Cleveland next week.

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