ATLANTA – As football season begins, IRS Criminal Investigation (CI) is informing sports fans that as they root for and place money on their favorite teams, engaging in illegal gambling, could lead to criminal charges ranging from money laundering to tax evasion.
“With professional football being the most popular sport in the United States, this is a good time for us to highlight the issue of illegal gambling,” said Demetrius Hardeman, Acting Special Agent in Charge, IRS Criminal Investigation, Atlanta Field Office. “Those who participate in sports betting must ensure they are doing so legally and should review the laws in their states pertaining to it.”
Between 2021 and 2023, CI initiated more than 100 investigations into illegal gambling activity totaling more than $178 million. Of these, 89 cases resulted in indictments, with a 96% conviction rate for prosecuted cases. The average prison sentence for adjudicated cases was 23 months.
In January, eleven people received a 114-count indictment stemming from their management of a multi-million dollar wagering excise tax evasion scheme involving an illegal sports-betting organization. Among the counts in the indictment is tax evasion which the illegal sports-betting organization failed to report approximately $19.8 million. More than $20 million was seized by CI.
Seven of the defendants are from the Atlanta Field Office’s area of responsibility which covers Alabama, Georgia, Louisiana, and Mississippi.
• Timothy J. Pughsley, 51, of Birmingham, Alabama, 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.
• 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.
The other five defendants are from Colorado, Massachusetts, Nevada, and Tennessee. An indictment contains only charges. A defendant is presumed innocent unless and until proven guilty.
Individuals who engage in sports betting activities are required to report their winnings on their annual tax return using Form W-2G. Additionally, the IRS encourages individuals to keep detailed records of all gambling transactions, including bets placed, winnings received, and losses incurred.
Sports enthusiasts who are unsure about their tax obligations or have questions about reporting gambling income are encouraged to consult tax professionals or visit the official IRS website for guidance. Ignorance of the tax law does not exempt individuals from their responsibilities. For more information on reporting gambling income and other tax-related inquiries, please visit IRS.gov.
The Atlanta Field Office covers Alabama, Georgia, Louisiana, and Mississippi.
IRS CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. IRS-CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.