TRUSSVILLE — The investigation into a possible multi-million dollar illegal sports gambling conspiracy, tax evasion and money laundering scheme could lead to the seizure of 30 properties, many across Alabama, including several that make up the Trussville Entertainment District (TED).
The 114-count indictment reads like a Hollywood thriller. It includes millions of dollars in dirty money, switching hands in parking lots, restaurant bathrooms and high-end conferences where the alleged “boss” tells people how to stay clean in a high-stakes business.
According to the United States Department of Justice (USDOJ), 11 defendants, nearly half of them from Alabama, were indicted in connection to the management of the scheme. Of those 11 defendants, six are from Alabama, and they are the top four accused of managing the organization.
The scheme spanned over at least three years, although the exact date it started is unknown, prosecutors say. According to the indictment, the head of the operation is Timothy J. Pughsley, 51, of Birmingham. He started the bookmaking business at least 17 years ago, but it eventually became known as “Red44,” and more players have been added as “senior agents,” prosecutors say. He also invested in properties that are now on the seizure list.
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Nine of the properties listed within the TED include the properties where Ferus Artisan Ales, Mexicali Blues, Mr. West’s Asian Kitchen and Pinchgut Pies are operated. Another property listed that is within the TED is a restaurant that is owned by a lessee of that property.
Those properties are owned by prominent businessman Coby Lake. Lake’s attorney, Jay Smith, said Timothy Pughsley had been a “passive investor” in some of Lake’s dealings. He believes that’s why Lake’s properties are listed in the indictment.
“Tim Pughsley, who is a defendant in this indictment, is a passive investor in the entity that owns some of these properties,” Smith explained. “By passive, I mean he doesn’t have any operating authority over them or anything like that. He’s just a passive investor.”
Smith said he and his client are monitoring the case but are not concerned that it will impact operations at the TED.
“I can understand why people on the outside would be concerned, but I don’t think there’s any reason to be,” said Smith. “At least not from the perspective of the real property owners, Coby, and the city of Trussville itself.”
Smith said another investor in some of Lake’s businesses, Chris Donaldson, is also listed in the indictment, but with this particular case, he hasn’t identified a connection between Donaldson’s investments and this case.
“Obviously, the indictment didn’t have anything to do with Coby,” Smith added. “Except for the properties listed.”
Trussville Mayor Buddy Choat said the city is also monitoring the situation.
“I was made aware of the indictment over the weekend, and I’m aware of the properties listed in the indictment,” Choat said.
The investigation centered around Red44, a website where betters could place their bets on sporting events. According to the indictment, the website had an offshore server in Costa Rica. According to court documents, bettors generally placed bets on credit; no money was exchanged through the Red44 online platform.
“The Red44 Organization utilized bank accounts, PayPal, Venmo, CashApp, GooglePay, cash, and virtual currency to move gambling proceeds between bookmakers and bettors,” the indictment read.
The indictment states that investigators believe Pughsley was operating at the top of the organization and had others working as senior agents in Alabama, including Christopher Donaldson, Christopher Burdette and Nathaniel Burdette. The senior agents had people under them, including Joshua Gentrup, of Georgia, who would recruit and report back. However, another set of agents reported directly to Pughsley, according to the indictment. Among those were Jonathan Lind (bookmaker) and Thomas Zito (senior agent), also from Alabama. The others were Gary Rapp (senior agent) of Tennessee, Mark Giaouinto (senior agent) of Massachusetts, Matthew Voorhees (senior agent) of Colorado and David Richards (senior agent) of Las Vegas, Nev.
The indictment stated that some of the defendants held conferences each year, usually in August, to talk shop. Those conferences were held in Costa Rica, New York, San Francisco, Chicago, Nashville, and Houston.
During the conferences, Pughsley reportedly gave updates on profit and the number of people betting with Red44. Because of information obtained by investigators, they believe that since at least January of 2018, the “defendants have received large amounts of proceeds from an illegal gambling business that was owned, operated, and managed in the Northern District of Alabama.”
During the 2021 conference in Houston, Gentrup is accused of saying the organization was “not in the business of breaking kneecaps” to collect but that it used intimidation over the phone to ensure collection from bettors.
Specific events listed in the indictment include exchanges of cash. One of those exchanges happened in November of 2021 when prosecutors say Pughsley counted cash in Zito’s car in the parking lot of Saltgrass Restaurant on Highway 280. The other account happened on December 10, 2021, at a private party at Mexicalli Blues, in Trussville.
“Bookmakers in the Red44 Organization were invited to attend the party,” the indictment reads. “During the party, a bookmaker observed Defendant Rapp counting an approximately two-inch stack of $100 bills in the bathroom, and was later observed placing an envelope of cash into his girlfriend’s purse.”
The court documents state that in the event of a conviction of the offense charged in Count One of this Second Superseding Indictment, Defendants, Pughsley, Rapp, Giaquinto, Voorhees, Richards, Donaldson, Gentrup, C. Burdette, N. Burdette, Lind, and Zito, shall forfeit to the United States of America any property, real or personal, which constitutes or is derived from proceeds traceable to said violation. The list of properties includes handbags, a “Red44” necklace, other jewelry, vehicles, and 30 locations of real property, including homes, land and businesses.
Choat said he is trying to stay in communication with those involved to understand what the process is if the properties are forfeited. He said he is aware of just how serious the charges are.
Lake also owns the properties in Gulf Shores that is on the list. When asked if Lake was aware of the Red44 website, Smith said, “I have no clue. I doubt it.
“ … Whether or not Coby knew of a website, Red44, I have no clue. I didn’t know about it, but I have no idea, honestly. I don’t want to speak out of school here.”
Coby Lake is not listed in the indictment or in any of the detailed accusations that have been made public in the case.
The charges break down as follows:
Timothy Pughsley is charged with 38 counts of tax evasion, one count of conspiring to operate an illegal sports-betting organization, one count of conspiring to commit money laundering, and four counts of money laundering.
Christopher Burdette, 30, of Chelsea, Alabama, is charged with six counts of tax evasion, one count of conspiring to operate an illegal sports-betting organization, one count of conspiring to commit money laundering, and one count of money laundering.
Nathanael Burdette, 36, of Birmingham, Alabama, is charged with six counts of tax evasion, one count of conspiring to operate an illegal sports-betting organization, one count of conspiring to commit money laundering, and two counts of money laundering.
Jonathan Lind, 44, of Birmingham, Alabama, is charged with six counts of tax evasion, one count of conspiring to operate an illegal sports-betting organization, one count of conspiring to commit money laundering, and two counts of money laundering.
Thomas V. Zito, 57, of Vestavia, Alabama, is charged with six counts of tax evasion, one count of conspiring to operate an illegal sports-betting organization, one count of conspiring to commit money laundering, and one count of money laundering.
Christopher Donaldson, 46, of Trussville, Alabama, is charged with one count of conspiring to operate an illegal sport-betting organization and one count of conspiring to commit money laundering.
Gary L. Rapp, Jr., 44, of Lakeland, Tennessee, is charged with six counts of tax evasion, one count of conspiring to operate an illegal sports-betting organization, one count of conspiring to commit money laundering, and two counts of money laundering.
Mark Giaquinto, 50, of Upton, Massachusetts, is charged with six counts of tax evasion, one count of conspiring to operate an illegal sports-betting organization, one count of conspiring to commit money laundering, and two counts of money laundering.
Matthew D. Voorhees, 47, of Englewood, Colorado, is charged with six counts of tax evasion, one count of conspiring to operate an illegal sports-betting organization, one count of conspiring to commit money laundering, and two counts of money laundering.
David Richards, 38, of Las Vegas, Nevada, is charged with six counts of tax evasion, one count of conspiring to operate an illegal sports-betting organization, one count of conspiring to commit money laundering, and two counts of money laundering.
Joshua Gentrup, 36, of Athens, Georgia, is charged with six counts of tax evasion, one count of conspiring to operate an illegal sports-betting organization, one count of conspiring to commit money laundering, and two counts of money laundering.
An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
Hannah Curran with The Trussville Tribune contributed to this report.
To connect with the author of this story, or to comment, email erica.thomas@1819news.com.
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