The Rise and Fall of Internet Sports Bookie and Poker Pro James Giordano

From Bluff magazine to court, James Giordano was wired for success until Queens prosecutors captured him in their web

Bee and his partner, Steve Eisman, came back with the written opinion that Giordano's business—based in a foreign country but doing business with American bettors—could face a legal risk, but much of the law was unclear: The 1961 Wire Act banned gambling across state lines, but it was unclear whether this prevented transactions from a foreign country.

Giordano says that he asked his lawyers to reach out to local prosecutors directly for further feedback.

"Steve gets back to me, and he says they told him, 'As long as he doesn't have a bookmaking operation in Long Island, best wishes,' " Giordano says. "Direct quote."

Government schizophrenia: While Rep. Barney Frank (below) works to legalize Internet gambling, prosecutors like Queens D.A. Richard Brown target it.
Courtesy Queens District Attorney’s Office
Government schizophrenia: While Rep. Barney Frank (below) works to legalize Internet gambling, prosecutors like Queens D.A. Richard Brown target it.
Newscom

It was an encouraging reaction, but it was also informal.

Buoyed by what Bee had found, Giordano moved with his wife to the Caribbean island of St. Maarten, which had legalized sports betting. He found a business partner and obtained a license through the government of the Netherlands Antilles. He opened his sports-betting business in November of 1997.

Giordano's initial website was a "cash post-up business." In a typical bookmaking arrangement, the bookie advances the gambler a line of credit, collects on the losses, and pays out on the wins. But in cash post-up, the gambler deposits an amount of money with the bookie and bets against that cash reserve. The bookmaker deducts the losses from that account, and deposits the wins.

But it wasn't easy signing up new bettors. Giordano says it cost him up to $100,000 a month in marketing and advertising to bring in 100 customers. "In the long run, it wasn't worth it," he says.

By 2000, the initial website had evolved into another site, "Play with Al" (PlayWithAl.com), and a new business model, known as "head count."

Who was Al? None other than pornographer and former Screw magazine publisher Al Goldstein, who, after a fairly legendary career as the anti–Hugh Hefner, lost his magazine in 2003, went broke, became homeless, and now, aged 73 and divorced five times, lives in the Rockaways.

In 1999, Giordano's son-in-law, Daniel Clarin, had started an Internet porn business, making videos in two legal houses of prostitution owned by Giordano's Caribbean partner.

They met Goldstein at a porn convention. Goldstein later flew to St. Maarten, where he had a short-lived brothel, and agreed to meet with Giordano while he was there.

"I wanted to get into [Internet gambling], because I thought porn wasn't going to last—like it was a patient with cancer," Goldstein tells the Voice.

"Goldstein was a genius, so beyond eccentric that I didn't know what the next word would be," Giordano says.

"Play With Al" was originally conceived as another porn site. But Giordano soon soured on the porn biz: "It's a real dirty business," he says. "This was not for me. I told Daniel that he could get involved in the Internet gaming business with me."

And that's how PlayWithAl.com became a gambling site, even though Al himself wasn't really involved.

"I always liked him, but we didn't end up in business together," Goldstein says.

The new site took a different approach. Giordano says the "head count" business worked like this: Individual bookies paid him $20 per bettor per week in exchange for Internet service, phones, tracking wins and losses, and, of course, setting odds—everything but placing the bets themselves. (On the side, he held on to his own betting clients, unrelated to PlayWithAl.com.) His idea was to become a kind of ISP for gamblers: He provided the services that others needed for the real action.

"I was not responsible for bets, I was not booking the bets, I was not profiting from the losses, I wasn't responsible for paying the customer or collecting from the customer," he says. "They were buying Internet and phone service. I was charging a service fee."

The two dozen bookies who used his service included Frank Falzarano, a former pro-baseball scout for the Mets and the Nationals; 72-year-old Ralph Piccirilli, a former maître d' with supposed connections to the Genovese crime family; and Peter Mastrandrea, known to his friends as "Slippery Pete."

Each of those men, and 23 others, would be indicted with Giordano, largely for acting as bookies and collection agents in the U.S.

Falzarano would later be indicted again in a separate Internet gambling case that sparked an internal probe by Major League Baseball and reportedly resulted in the firings of several scouts.

Another bookmaker, Don Clarke, started using Giordano's site two years after the two men met over a poker game in Las Vegas.

Giordano hired a U.S. company to build the website and two others to set up security measures. They also created an 800 number.

Clarin was the company controller. Giordano also employed his wife, Priscilla, and their daughter, Melissa.

Giordano used offshore banks, something that prosecutors later characterized as a dodge. But he says it all made perfect sense: "If you have an offshore operation, you deal with offshore banks," he says. "We weren't hiding anything."

Eventually, he says, he was making between $12,000 and $40,000 a week, serving 600 to 2,000 gamblers.

"When you went offshore, you became a professional," he says. "This became a professional business. One of the ways it established integrity was that you would never solicit the customers of one of the agents."

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