John Giannelli Sr., 66, of Danvers, pleaded guilty in U.S. District Court in New Hampshire last week to charges he laundered about $452,000 in proceeds from his illegal online gambling enterprise by using the business of one of his former gambling customers.
Giannelli, a former resident of Peabody, will be sentenced on January 3 for money laundering, operating an illegal gambling business, and five counts of impeding the administration of the Internal Revenue laws, according to a statement from U.S. Attorney John P. Kacavas.
At a change of plea hearing, prosecutors made an offer of proof that Giannelli operated an online sports betting business while he resided in Peabody, and later Kingston, N.H. controlling access to the site, granting access to numerous agents or partners, and monitoring the overall gambling activity, according to the statement.
Federal authorities said the money laundering charge was the result of a scheme in which Giannelli provided the business of one of his former gambling customers - a business which listed Giannelli as an employee - with cash proceeds generated by the gambling business. The business issued paychecks to Giannelli, making his income appear legitimate, and also generated false W-2 forms that Giannelli used to support tax returns filed with the IRS.
Federal officials did not provide the name of the business.
According to the statement, Giannelli laundered approximately $452,000 in proceeds through the business between 2003 and 2007.
Giannelli faces a statutory maximum penalty of 20 years on the money laundering charge, five years on the gambling charge, and three years on each of the tax charges.
The investigation was conducted by the Federal Bureau of Investigation and the Internal Revenue Service.