$7M Sports Betting Software Scheme Leads to Likely Prison Sentence for Alleged Utah Fraudster
Posted on: October 19, 2020, 11:52h.
Last updated on: October 20, 2020, 09:31h.
A Utah man has pleaded guilty to taking part in an allegedly fraudulent multi-million-dollar athletic wagering software plot via a business identified as Sindakit Software LLC. He now faces a 10-year sentence in prison.
![Christopher D. Hales faces a 10-year prison sentence](https://www.casino.org/news/wp-content/uploads/2020/10/Huber1-142x83.jpg)
Christopher D. Hales, age 39, of Lehi, Utah, entered the plea last week in Utah federal court to wire fraud conspiracy and money laundering conspiracy charges. The illicit plan led “investors” to lose at least $7 million, prosecutors revealed.
The investors were promised their money would be turned into winning wagers by using the firm’s software. But the allegedly fraudulent enterprise did not have a proprietary sports betting software or even an algorithm, prosecutors said.
Hales allegedly cooked up the plot with an unnamed coconspirator in 2018, when Hales was in a halfway house for a sentence from an earlier fraud case, according to a statement from Utah US Attorney John W. Huber.
Investors Told Software Could Beat the House
Under the plot, Hales and the coconspirator allegedly conspired to defraud investors by encouraging them to invest in the software that was supposed to lead to lucrative wagers on athletic events. Hales claimed the software could even “beat the house,” Huber said.
Hales also promised investors that 100 percent of their money would be used to place online sports bets, prosecutors said.
But Hales allegedly used much of the funds for his or his coconspirator’s personal use. Or, it was allegedly used to pay “winnings” to early investors in a Ponzi scheme, prosecutors said.
Part of the investors’ money also was used to pay commissions to company representatives who were trying to attract new investors, prosecutors said.
Hales also claimed he would match all money put up by investors. Instead, he took out a line of credit with the sports betting website and used the line of credit to hedge bets, prosecutors said.
Hales additionally promised the sports betting operation provided investors approximately a 10 percent return per week, prosecutors said. He further claimed there were interested buyers who wanted to purchase the software for tens of millions of dollars, prosecutors add.
But prosecutors explained that no buyers made such offers and disputed the high rate of return.
In reality, the plot involved alleged laundering of investor money through transfers in and out of the Sindakit Software financial account, prosecutors explained.
Financial statements given to the investors were false, prosecutors said. They were inflated because of the line of credit and manipulation, prosecutors add.
Prosecutor Calls Hales Serial Schemer
“Utah has an outsized fraud problem, and these allegations illustrate the conduct of a serial schemer,” John Huber said in his statement about the case.
A judge once told Christopher Hales he was addicted to defrauding people,” Paul Haertel, an FBI agent based in Utah, added in the statement. “The reality is that most fraudsters have no remorse or conscience, and they often reoffend.”
The recommended 10-year sentence still needs to be approved by a federal judge. Hales previously was sentenced to prison for an earlier crime.
In 2011, after Hales was convicted of bank fraud in connection with mortgage fraud, Hales was sentenced to 90 months in federal prison, Huber said. Hales was also ordered to pay $12.7 million in restitution.
While on supervised release in 2016, he violated terms of his release. Hales was then sentenced to another 30 months in prison.
Following his release from federal prison in 2018, he was assigned to the halfway house in Salt Lake City.
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