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

Last Wednesday, a former bookmaker named James Giordano stood up in a Queens courtroom to be sentenced for promoting illegal gambling.

Giordano, 55, was indicted in 2006 for running a sports betting website in the Caribbean that banked millions of dollars in bets from dozens of U.S.-based bookies and thousands of individual gamblers. Just over three years later, the case was finally at an end.

The hearing was brief, a routine matter of the kind that takes place in courtrooms all the time, and the sentence—five months in prison—hardly seemed noteworthy.

James Giordano's poker playing got him into Bluff magazine.
Bluff magazine
James Giordano's poker playing got him into Bluff magazine.
Al Goldstein: “I thought porn wasn’t going to last.”
Newscom
Al Goldstein: “I thought porn wasn’t going to last.”
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

But for those who have followed Giordano's case, his sentencing was a characteristically ambiguous end to an epic battle being fought over your right to place a wager on the Internet.

It's a legal conflict that the United States is fighting all over the world with foreign countries that have repeatedly and angrily told off the American government. Other nations resent what they see as America's hypocrisy about what is, and isn't, the proper venue for placing a bet on a horse or a football team or a hand of poker, bringing us into conflict with entities as varied as tiny Antigua and the entire European Union.

There's no end in sight to that war, but the particular skirmish wrapping up last week at the Queens courthouse involved characters more close to home: a local bookie nicknamed Slippery Pete, another man whose career as a New York Mets scout ended indisgrace, a couple of reputed minor league wiseguys, some mouthy lawyers, and a colorful judge who, at one point, invoked Nevada's Bunny Ranch whorehouse to make a point.

The slate of players even includes the eccentric pornographer, Al Goldstein.

But in the starring role is a gentleman-bookie turned professional poker player who got his start watching bets laid down in the aisles of a Long Island supermarket. And you don't get from there to running a multimillion-dollar bookie joint in Costa Rica without some fast moves and moxie. So try to keep up.

In 1974, Jimmy Giordano was newly married. He had left college after one year and was looking for a course in life. His father-in-law planned to start a chain of pharmacies, and asked Giordano to manage the drug counter and the non-food aisles in a Pathmark supermarket to gain experience.

It was at the Pathmark that he first witnessed a curious ritual. Over the week, the produce manager took bets on boxing matches and football games from other employees. Every Wednesday, he'd make a phone call and then hand off the cash to a small, Italian-looking guy.

After watching this for a few weeks, Giordano says, he asked the produce manager a question: Why was he bothering to hand over the money? Why didn't he just handle the bets himself rather than call in someone else?

"It seems to me that if you eliminate the phone call, you can keep the money. That was my logic," Giordano says in the first news interview he has ever given.

He had found his calling. He ditched the pharmacy idea and went into business with the produce guy, starting a bookmaking operation of their own. Later on, he and another partner worked the business for another 11 years or so.

Despite the risk of arrest and jail, Giordano says he thought of his job as just that.

"My wife and I, we were clean-cut kids from South Merrick and South Bellmore, churchgoing. It just became a business. We never looked at it as being something terrible," he says. "You did your best to get your money, but we never got involved with thuggery or usury. We kept it clean."

Giordano's first arrest was in Suffolk County in 1991. He avoided jail time, but paid a fine.

Undaunted, he continued the business. By the mid-1990s, he had about 600 customers during football season. He was no schlub operating from a barstool, either; he rented space in an office building—there was no sign on the door—and used a phone system that rolled calls over so no one got a busy signal.

"I always had an aptitude for numbers," he says. "If you're going from here to there, I'll be able to tell you how many red cars you'll see. I'll give you odds that you might actually be willing to bet on."

In 1996, Nassau County authorities arrested him again. And again, he avoided jail time by pleading guilty and paying a fine.

But this second arrest, he says, gave him pause.

Firmly against the prospect of a third collaring, Giordano figured there had to be a better way. Internet gambling was in its infancy and promised a slick way to rake in a lot of cash. But, he insists, what drew him to it was the prospect of finding a way to do his work without the fear of incarceration.

On the Internet, and working in a country with different notions about gambling, Giordano figured there had to be a way to do things legally.

Proof that he wanted to do things as legitimately as possible? He points out that he hired Nassau County lawyer Peter Bee, a former mayor of Garden City, Long Island, to study U.S. law on online wagering before he set up shop.

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."

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."

The site had some interesting rules, steeped in the curious terminology of the betting world. PlayWithAl.com, for example, banned "syndicated gamblers, steam players, and wiseguys."

Martin Scorsese films have left little question about that last one. A syndicated gambler, on the other hand, is a professional bettor, who might have the resources to hire someone to hang around college campuses for inside information about the school's athletes. A "steam player" closely follows the syndicated gambler and bets as they do.

"These people are outright thieves," Giordano says. "They prey on bookmakers."

At one point, Giordano says, he had to fend off a group of Russian computer hackers who made a practice of breaking into servers and holding them for ransom. Employing armies of zombie computers controlled without their owners' knowledge, the hackers would take over servers, change passwords, and lock out a company from its own computers. Then they'd transmit a ransom demand.

In Giordano's case, he says, the thieves got control of three servers before his techs were able to block them out. "It was a nightmare, but we caught them before they could take control," he says. "It never got to the point of a ransom demand."

In 2003, he left St. Maarten and returned to the U.S., settling with his wife in Pinecrest, Florida, in a million-dollar home surrounded by a cream-colored wall, a green patina gate, and 12-foot columns. The Internet gambling business had turned out to be very lucrative indeed.

The couple opened a small office in the town and hired college students to act as customer service and marketing representatives for PlayWithAl.com. The computer servers remained in St. Maarten.

Giordano had been playing poker for years, but now he began competing in big-money Texas Hold 'Em tournaments. Over the years, he has competed against some of the game's biggest names—Phil Hellmuth Jr., Johnny Chan, Mike Matusow, and Jennifer Harman.

Bluff magazine listed Giordano as having won $120,000 between 2005 and 2007. In August 2006, he won first place and $50,000 in a poker tournament at the Bellagio Hotel in Las Vegas.

"At first, I got beat time and time again," he says. "You need patience and timing. It's not the hands you win that make you the money. It's the hands you throw away. If you have a pair of Queens, or an Ace and a King, be prepared to throw them away. It's OK to throw that hand away and win with a pair of eights five hands later."

But as he competed in that tournament at the Bellagio, Giordano was being watched—and not just by poker enthusiasts.

By 2003, around the time that Giordano moved to Florida, Internet gambling had grown from its modest beginnings into a major source of revenue not just for offshore companies, but for the countries where they were located.

A confrontation between those countries and the U.S. was inevitable.

That year, Antigua, where Internet gambling had been legalized, complained that U.S. law was damaging its economy. While American prosecutors denounced online betting as a scourge, some other governments saw it as legitimate international commerce.

Antigua filed a voluminous complaint with the World Trade Organization, which governs international trade through a series of complex treaties.

In 2004, the WTO sided with Antigua, ruling that the U.S. ban violated international treaties, and recommended that the U.S. Congress amend the 1961 Wire Act to allow Internet gambling.

The U.S. appealed, but lost. Most notably, the WTO found that the U.S. could not "invoke a moral defense" to its violation of trade rules because it already allowed a form of electronic gambling: off-track betting on horse racing.

The WTO gave the U.S. a year to comply with its ruling. The U.S. Justice Department came back with an opinion that basically said, "We are in compliance."

In June 2006, Antigua sought a ruling from another WTO panel that the U.S. had not complied. In March 2007, the panel once again ruled against the U.S., which meant that Antigua could now impose trade sanctions against the U.S.

In May 2007, the U.S., on its own, opted to take Internet gambling off its list of services within WTO jurisdiction. In effect, critics said, the U.S. was applying a double standard. It was an unprecedented move.

Other countries jumped on the Antiguan bandwagon, including Macao, Japan, India, Canada, Australia, Costa Rica, and, most ominously, the European Union, which called the U.S. ban "discriminatory." The EU asserted that Internet gambling was worth $14 billion, with the U.S. market about $4 billion of that.

And so, later that year, the WTO ruled that the U.S. had violated international trade rules and was now obliged to pay fines to the aggrieved countries.

The U.S. reached confidential settlements with the EU, Japan, Australia, and Canada in late 2007. In January 2008, Antigua and Costa Rica filed for arbitration before the WTO, and there the dispute sits.

Antigua wanted damages worth $3.4 billion, but in the end, they got only $21 million.

"Basically, they won the battle, but lost the war," says Joe Kelly, a professor of business law at SUNY-Buffalo. "The question remains, though, that if the U.S. doesn't honor their WTO commitment, what would stop some other country from doing the same thing?"

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.

In 2007 and 2008, the Boston Globe reported, the congressman received $48,300 in campaign contributions from poker interests—7 percent of his total individual contributions.

Frank has found an ally in former Republican senator turned big-time lobbyist Alfonse D'Amato, who signed on to represent the nonprofit Poker Players Alliance (PPA).

D'Amato called the Bush bill "ridiculous legislation": "They've curtailed the rights of millions of Americans," he declared. "The little guy, the person who maybe can't come to Las Vegas."

The PPA claims a million members, but much of its financing comes from the Interactive Gaming Council (IGC), a Canadian trade group made up of international Internet gambling companies and gaming software developers. (The IGC backs only casino games and poker, not sports betting.)

The group has spent some $4.5 million on federal lobbyists since 2006, records show. More than $1 million of that has gone to D'Amato's Park Strategies lobbying firm. The PPA has also doled out $132,000 in campaign contributions since 2007, which doesn't include spending on the state level.

Opponents of Internet gambling say that the speed of the game, the availability, and the amount that people can lose add up to a toxic combination. A study released a few years ago concluded that more than a million young people are using Internet gambling sites on a monthly basis.

"This is not a debate about social gambling, like a kitchen-table poker game," says Les Bernal, executive director of the group Stop Predatory Gambling. "This is about a business model that relies on addicted and heavily indebted people.

"I think there's a lack of understanding about how the predatory business model works," he adds. "The more you wager, the faster you do it, the quicker it gets out of control. You can play five or six hands at once. Should we really bring Las Vegas into our homes 24 hours a day?"

While Barney Frank, Al D'Amato, and others pushed to make Internet gambling legal, investigators pushed on with their probe of Giordano.

In May 2006, Giordano moved his offices from St. Maarten to Costa Rica. There, he located his operation in a set of warehouse buildings adjacent to telemarketing outlets owned by multinational corporations and travel agents. He had about 35 employees, most of them Costa Rican.

More than 200 Internet gambling companies are located in the Central American nation, whose government tolerates them as long as their bettors are located in other countries.

Giordano hired a Costa Rican law professor named Juan Carlos Montero to set up the company and payroll structure: "I am not going into a foreign country without being totally on the up-and-up," he says.

But six months after Giordano moved the business to Costa Rica, the jig was up.

Police officers in New York, New Jersey, Florida, and Las Vegas moved in, arresting Giordano and his wife at their Florida home, as well as 25 other people in other locations. Three companies were also charged.

Among the host of allegations were enterprise corruption—a law often used to prosecute reputed mobsters—money laundering, promotion of illegal gambling, possession of gambling records, and conspiracy.

Prosecutors also filed a $500 million civil forfeiture case.

Authorities claimed that Giordano's company booked more than $3.3 billion in sports betting wagers over 28 months. (Giordano says those numbers are preposterous.)

A series of search warrants were served in New York, Las Vegas, and Florida. The federal raid in Florida seized Giordano's house, $288,000 in cash, and the $50,000 in gambling chips from the Bellagio that he had won in the poker tournament. Authorities froze the Giordanos' Swiss bank accounts.

Queens District Attorney Richard Brown and Police Commissioner Ray Kelly held a press conference to announce the arrests.

Brown described the case as the first to occur after Bush signed the new gambling law, and the first to charge a Web designer and an offshore Internet company with involvement in a criminal enterprise. He accused the company of laundering "untold millions" through casinos, shell corporations, and bank accounts in Central America, Switzerland, and Hong Kong: "Internet gambling is a multibillion-dollar worldwide industry that for too long has operated with impunity," he declared.

Kelly, meanwhile, described the venture as "the largest illegal gambling operation we have ever encountered." He said that law enforcement had "smashed" it.

Blind quotes in the newspapers claimed the operation made payments to an acting organized crime boss, but that was never alleged in the indictment or proved in court.

The arraignment judge set bail at $5 million. Though he would successfully appeal that number, Giordano began 10 months of pre-trial incarceration at the Vernon C. Bain Correctional Center, a rusty 800-bed barge-turned-jail on the East River.

"I had never been incarcerated, and it was like hell," he says. "The guards don't treat you well, the bedding is terrible, the food is horrible. It was always freezing. The facility isn't designed for a long stay."

To pass the time, Giordano read books and newspapers. On occasion, he played poker with makeshift chips.

What followed were three years of legal wrangling that, at times, took comical turns.

At a bail reduction hearing in July 2007, Martin Schulman, a 15-year veteran of the bench, got into a remarkable exchange with prosecutors over the hypocrisies inherent in American gambling law. He repeatedly questioned prosecutor Gerard Brave, asking, for example, whether it would be legal for a Las Vegas casino to come to Queens and collect a gambling debt.

Brave said that was against the law.

"The only thing [in that example] that went on in Queens County was collecting a debt that occurred in Las Vegas," the judge said.

Brave insisted that would be a crime.

"The wager took place in Vegas; the debt occurred in Vegas," the judge pointed out. But the prosecutor wouldn't budge.

"What about the New York State Lottery and Mega Millions—are they promoting gambling?" the judge asked.

Brave said no.

"They are telling everyone, 'Please gamble,' " the judge pointed out.

"That's a legalized form of [gambling]," Brave answered.

"So it's legalized in Vegas. That's exactly my point," Schulman said.

Brave still wouldn't concede. "It is still advancing and profiting from gambling even though it happened where the conduct was legal," he said.

"Gambling is legal in Queens County when Aqueduct is open," the judge responded.

Then the judge took another tack, and proposed a hypothetical situation involving a Queens resident going to Nevada to patronize the Bunny Ranch, a well-known legal brothel once featured on a cable-TV series.

"What if the guy charges $10,000 worth of services of a prostitution ring and then stopped payment on a credit card. Do you mean they can't come here and sue in our courts because prostitution is illegal in New York?"

Brave replied, "I think we're getting far afield."

In the end, Schulman reduced Giordano's bail to $750,000, calling the original amount of $5 million "an abuse of discretion." Giordano left custody after 10 months in jail while his legal case grinded on.

His attorneys argued that the wiretaps should be suppressed because Queens investigators had no business listening in on Costa Rican deals that were legal in that country. Brown's office says a New York judge signed off on the warrant to search the computers in Costa Rica. The office didn't need approval from the Costa Rican government. One of Giordano's attorneys, Paul Testaverde, went after the judge, Stephen Knopf, in his criminal case, accusing him of conspiring with prosecutors to suppress Giordano's rights and, at times, raving at Knopf, telling him he should kick himself off the case "based on the outrageous actions of Your Honor in this case, based on the illegal actions of Your Honor."

Knopf ignored him.

But as 2009 unfolded, everyone in the case seemed to dread the prospect of a trial, which would have been lengthy and technically daunting. Knopf began pushing both sides to come to some kind of plea agreement. Testaverde faded to the background as other Giordano attorneys took control. One of them was Becher, who had been involved in one of the early Internet gaming companies, a firm based in Panama that was indicted by the feds in 1998. The company paid $1.2 million in fines.

"We had done everything to be transparent," Becher recalls. "We paid taxes, and we declared our earnings. And I think at the end of the day, the government realized there were legal hurdles to their case, with no law on the books specifically about Internet gaming."

With both sides eager for a deal, Giordano agreed to plead guilty to promoting gambling and accept a sentence that would put him in Rikers for about five months. He agreed to forfeit just over $1 million, and waived the right to seek another million seized from other defendants. His 26 co-defendants forfeited more than a million dollars. Some of them also got jail time.

Even though Giordano had already served 10 months in jail, he and his lawyers regarded the plea agreement as something of a victory. He kept his house. He did not have to go to state prison. "The case was a stretch to begin with, but, to use a poker analogy, the decision came down to whether to go all in and force a trial or fold," says Richard Willstatter, Giordano's lawyer in the plea negotiations. "He decided to fold and take a reasonable compromise."

But, if his case was so strong, why, in the end, did he plead guilty?

In an interview shortly before his sentencing, he explained that he was worried he wouldn't get a fair shake in Queens County. "They got a judge to allow them to search computers in a foreign country," he says. "They illegally obtained the information, and a judge upheld them. Am I going to wait to go to trial, lose, appeal, and spend another $100,000-plus? This is the problem I was facing. So I made a reasonable deal. I had put my family through enough."

Queens District Attorney Richard Brown says, "Mr. Giordano was the last of 30 defendants—including his own wife, daughter, and son-in-law—to plead guilty and to admit that they participated in an incredibly lucrative and illegal global gambling operation. . . . Unfortunately for Mr. Giordano, the law enforcement community is just as adept in using new technology to stop him and others involved in such criminal activity."

Giordano's clearly still bitter that he was indicted at all: "The Queens District Attorney is brash and arrogant. It's a little place between Manhattan and Long Island. They need headlines. I was their headline."

Three years of investigations, wiretapping, and another three years of court wrangling to put a bookie in jail for five months: It was a payoff only a sucker would bet on.

Becher believes that cases like Giordano's are more about asset seizures than about keeping the public safe.

"For local prosecutors, it's a chance to take down real money," he says. "It's not a deterrent. It's actually an incentive for people to do things the wrong way."

But Brown sees it as a sort of gateway crime, which justifies his long prosecution of Giordano. "History has taught us that illegal gambling has always been the bread and butter moneymaker for organized crime," he says. "Internet gambling has been compared by some to the crack cocaine epidemic of the late '80s and early '90s. It is highly addictive—it is easy to get hooked. It has been said of Internet gambling that 'You simply click the mouse—and lose your house.' Once you start, you can't stop."

As for the effort to legalize Internet gambling, Frank introduced the latest version of his bill in May 2009. By the end of July, the bill had dozens of co-sponsors in Congress, including Republican Peter King of New York as well as 10 Democratic reps also from this state.

The Frank bill would not allow sports betting, but it appears to allow all other kinds of wagering.

By the time Giordano left for his stint in jail, the bill had garnered 63 co-sponsors.

Meanwhile, the Treasury Department has agreed to postpone enforcement of the Bush Internet gambling law for another six months.

If Frank is successful, the major overseas firms will enter the U.S. market at once, and, more than likely, the big American casino companies will be right behind them.

"The switch is waiting to be flipped," Becher says.

So will Giordano return to the Internet gambling business once he is released from Rikers? No, he says.

"I'm out of it, looking for something else to do," he says.

While his indictment in 2006 was widely covered by the local press, there was only a single reporter at his sentencing last week. His wife and three relatives made up the rest of the gallery.

When his name was called, Giordano, dressed in a gray sweatsuit and fleece jacket, hugged his wife and said, "All right. I love you. Take care of yourself. For now, just put me out of your mind and live your life."

Twenty minutes later, he was escorted from the courtroom through a side door and was on his way to Rikers Island. At the door, he turned one last time to his family.

"Bye, guys," he said.

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