Jury Returns Guilty Verdict in East Texas Internet Gambling Conspiracy

BEAUMONT, TX—Three defendants have been found guilty by a jury in a wide-scale Internet gambling conspiracy in the Eastern District of Texas announced U.S. Attorney John M. Bales.

Phillip Dell Clark, 55, of Big Spring, Texas; Daniel Patrick Davis, 42, of Treasure Island, Florida; and Cecil D. Stephens, 73, of Burnet, Texas, were convicted on July 9, 2010, of conspiracy to operate an illegal gambling enterprise following a 10-day trial before U.S. District Judge Thad Heartfield. Clark and Davis were also convicted of two counts of operating an illegal gambling enterprise and two counts of money laundering. Stephens was also convicted one count of operating an illegal gambling enterprise and one count of money laundering.

The defendants agreed to a forfeiture money judgment of $640,000 as well as forfeiture of several bank accounts containing about $80,000 cash and several vehicles.

According to information presented in court, a joint investigation revealed that from April 2007 to September 2009, the defendants operated a multi-million-dollar gambling enterprise through computerized gambling machines using sweepstakes to attract patrons under the guise of Internet cafes and e-business centers in Port Arthur, Beaumont, Nederland, and Henderson, Texas. Clark and Davis owned and operated Dolphin Internet in Port Arthur, Davis operated the Nederland Internet Café in partnership with others, Clark and Stephens owned and operated the Double Click in Henderson, and Davis and Stephens operated the Henderson Sweepstakes in Henderson. The Dolphin Internet and the Nederland Internet Café were shut down after search warrants were executed on July 2, 2008, and the Beaumont location closed shortly thereafter. Search warrants were also served on the Double Click in Henderson in March 2009 which led to its closure. A search warrant in September 2009 also led to the closure of the Henderson Sweepstakes. The defendants were indicted by a federal grand jury on Oct. 7, 2009, and charged with federal gambling violations.

The defendants face up to five years in federal prison for each conspiracy count, up to five years for each operating count, and up to 20 years for each money laundering count. Sentencing dates have not yet been set.

This case was investigated by the Texas Attorney Generals' Office, the Jefferson County Sheriff's Office, the Port Arthur Police Department, the Nederland Police Department, the Rusk County District Attorney's Office, the Henderson Police Department, the Dallas Police Department's Vice Squad, and the FBI. This case was prosecuted by Special Assistant U.S. Attorney David Glicker and Assistant U.S. Attorneys Robert L. Rawls and James Peacock.