By Steve Weinstein
By Devon Maloney
By Tessa Stuart
By Alison Flowers
By Albert Samaha
By Jesse Jarnow
By Eric Tsetsi
By Raillan Brooks
Giordano's own legal morass began, as many of these things do, with an unrelated inquiry into an unrelated racket.
In 2004, narcotics cops were on the trail of some crooked pharmacists who were illegally selling prescription drugs like Oxycontin. Following that trail, investigators came across a nest of College Point wiseguys using a FedEx deliveryman to traffic in cocaine.
The investigators were then led to Frank Lobascio, a Long Island man later alleged to be a collection agent for Giordano's operation. Prosecutors amended the warrant from the drug case to open a new investigation into the gambling business.
Between July 2004 and November 2006, the search warrant allowed them to tap 30 phones and intercept tens of thousands of hours of conversations.
In August 2004, an undercover detective in a diner overheard a man named Steven Tarantino discussing payment of a gambling debt related to the Giordano website. Tarantino was a collection agent who reputedly had ties to the Lucchese crime family.
Prosecutors would later claim Tarantino plotted to kidnap a Queens man to force him to pay a gambling debt. Cops whisked the guy out of his house before anything took place, a law enforcement source said.
Without addressing the details of that allegation, Giordano says he knew Tarantino since he was a teenager. "If he went, he went on someone else's behalf," he says. "That guy was someone else's customer."
Investigators also had a confidential informant, nicknamed "Bob," place bets on PlayWithAl.com.
When investigators learned that Giordano was going to be in Nassau County for a wedding, they staked out his hotel. While he was out, they hacked into his laptop and copied the hard disk. Using "keystroke" technology—software that captures what a computer user has typed—the techs figured out Giordano's passwords for the computer servers in St. Maarten and, later, Costa Rica. They obtained a search warrant for those servers.
In a nondescript office building on Queens Boulevard, police and FBI techs hacked into Giordano's offshore servers and recorded, or "mirrored," every transaction. (Giordano's attorneys argued that this was overreaching for a local law enforcement agency to eavesdrop on international jurisdictions. Prosecutors pointed out that the monitoring was taking place in Queens.)
In March 2005, Miami-Dade police officers showed up at Giordano's Coral Gables office after receiving a report that one of the employees had sexually assaulted a woman. (The woman was later convicted of filing a false report.)
While they were in the office, officers noticed brochures and other documents that suggested they had come across a gambling operation, and called the FBI. Agents arrived the next day with a search warrant, and seized the computers and paper records.
It's unclear whether the raid had anything to do with the ongoing Queens investigation. But the timing, to Giordano, was curious. At any rate, he says, the Coral Gables office was not taking bets.
"We instructed them never to take a bet," he says. "They didn't even know how to take a bet. It was strictly customer service."
The feds took their evidence to the grand jury, and obtained the testimony of Gustavo Mojica, one of the employees. Mojica, court records show, said it was an Internet gambling operation with about 1,000 clients in the U.S., Germany, Canada, and elsewhere.
The timing could not have been worse for Giordano. After several years of legal uncertainty, the Bush administration was about to bring the hammer down on online wagering.
The Bush-backed measure punishing banks for transferring Internet gambling proceeds, tacked on to the massive Port Security Act in 2006, effectively banned online gambling in the U.S.
Supporters said the bill would save minors from the perils of online gambling. The National Football League was among the strongest supporters of the measure.
According to Giordano's Florida lawyer, Sandy Becher, the bill had an unintended effect: "You would just go to another payment gateway overseas," he says. "Meanwhile, that money leaves the U.S."
Once the Bush bill passed, Massachusetts Congressman Barney Frank began his own quixotic campaign in favor of Internet gambling. His stated reason was constitutional: He didn't believe the government had the right to regulate what people did in their own homes. With typical wry hilarity, he carried his campaign to the airwaves, appearing on one show after another touting his bill. He also wrote letters to the Treasury Department asking them not to enforce the law.
"This is the single biggest intrusion by the government that I have seen," he declared. "People should be free to do things on the Internet in their homes."
Appearing at a World Series of Poker Event, Frank pointed out the obvious contradiction in U.S. law: "There are all these footnotes," he said. "Sometimes, horse-race betting is OK; sometimes, bingo is OK."
The Frank bill, which has gone through a couple of versions since 2007, would set up a system in which anyone who wants to accept bets from people in the U.S. would have to be licensed by the Treasury Department, who would then be able to tax any proceeds from the business and issue fines of $25,000 to $100,000 to companies that violate the rules. The bill also protects banks from getting into trouble for performing financial transactions with these companies.