The US Attorney in Wichita, Tom Beall, revealed Friday that two local men had pleaded guilty to gambling and tax related offences in a local federal court.
The prosecutions followed wire-tapping activity by law enforcement officials that targeted a number of Wichita businessmen and politicians.
Danny Chapman (67) pleaded guilty to one count of operating an illegal gambling business and one count of tax evasion, whilst Daven Flax (46) pleaded guilty to two counts of operating an illegal poker business and one count of making a false statement on a tax return.
According to court records, Chapman and Flax both were criminally charged Tuesday but their cases were filed under seal and only made public Friday.
Chapman in his plea agreement admitted to running an online sports betting operation from January 2013 to Feb. 10, 2017, where he acted as a bookmaker and had at least five people working under him. He also managed his own group of sports betters. Chapman and the people working for him would arrange for clients to place bets on sporting events using several gambling websites created and hosted in Costa Rica.
Chapman allegedly made more than $2,000 a day. To avoid paying nearly $345,000 in federal income tax on his illegal earnings, he bought vehicles with cash and registered them to other people, including a colleague and a nephew. He also bought money orders and cashier’s checks using his family members’ names.
Federal officials reportedly raided his home, and court records show that about $1.5 million in cash was seized. That included about a half million in cash from two safety deposit boxes in Las Vegas, as well as cash seized from two homes in Wichita and another $480,500 that Chapman and his attorney turned over to federal officials in March.
Authorities also seized collectible bills and gold coins, jewelry and $9,718 in Kansas Star Casino poker chips and 10 vehicles including two Porsches, three 1960s model Chevrolet Camaros, a 1963 Corvette and a Dodge Viper, court records show.
In his plea agreement, Flax admitted to running several illegal poker games in Wichita and taking a cut – or rake – from the amount of money bet in each hand. The games were by-invitation-only events held in homes or businesses and were not open to the public.
Flax used part of his cut to pay waitresses, dealers, caterers and others to work during the games and to rent the businesses where they were held. He kept the rest of the profits for himself or split it with people who helped him manage the illegal poker games.
He also admitted to working as a bookie in Chapman’s sports betting operation between at least January 2013 and Feb. 10, 2017, and that part of his income, investments and property were funded by that work.
Sentencing dates for the two men are pending.