Illegal Internet cafes busted in Cuyahoga County; 10 people, 7 companies indicted

CLEVELAND - After eight months of in depth investigating Cuyahoga County Prosecutor Bill Mason announced the indictments of 10 people and seven companies that have been operating or working in conjunction with an out of state company involved in illegal internet sweepstakes cafes in Cuyahoga County.

Ohio law states that no person shall establish operate knowingly engage in conduct that facilitates any game of chance conducted for the profit or scheme of chance.

"It's illegal because you have to pay to play, the players have no influence over the outcome of  the game, the player receives a prize or something of value when they complete it,30  then they can turn that prize into more opportunities to keep playing," explained Cuyahoga County Prosecutor Bill Mason, "Internet sweepstakes cafes sell internet access time to onsite consumers for 25 cents per minute with added chances to win prizes or cash by playing the sweepstakes game on a computer terminal."

Mason said most of the machines found in the county are controlled by a New Jersey company called VS2 Worldwide Communications, LLC.

Since February 2008 the alleged criminals have amassed millions of dollars in Cuyahoga County alone. "Their profit of 48 million dollars represents only 25 percent of their cut of the proceeds from the illegal gambling  and internet cafes in Cuyahoga County alone," said Mason.

On Tuesday a Cuyahoga County grand jury returned a secret indictment against ten individuals and seven companies working with VS2. The indictments were unsealed after arrests were made.

Mason said that over the last four years these individuals have have perpetrated the expansion of the VS2 Gaming System into Ohio with the assistance of Ohio distributors and marketers of the system.

Alleged principal operators arrested were Phillip Cornick, Edward Kaba, and Richard Upchurch. Mason said these men and their co-horts George Georgekopoulos, Pete Georgekopoulos, Pete  Georgekopoulos, Christos Karasarides, and Christopher Maggiore were able to convince small businesses to operate their games as a sweepstakes  by telling them it's not illegal and unregulated. In addition, the distributors and marketers of the VS2 gaming system have benefitted from the assistance of local opportunists. Martin and Seil Sarcyk,  owners of Union Vending, which already had a significant number of Cuyahoga County's bars and restaurants as existing customers for their vending machines, jukeboxes, and arcade games, acquired many VS2 gaming system terminals from VS2 Worldwide Communications, LLC and VS2's partner company, P & E Technologies, Inc. The Sarcyk's, through their business, Union Vending, convinced several of their clients to add the VS2 gaming system terminals to their bars and restaurants. Two of these establishments were Good Time Charlies II and Mr. B's, both operating in Parma Heights.

Investigators said the money gained from Cuyahoga County was distributed from the business account of VS2 Worldwide Communications, LLC to various individual accounts owned by Cornick, Kaba, and Upchurch, to a  mysterious bank account in the Ukraine, as well as back to Ohio to the business account of Elite Entertainment DBA VS2 Marketing Group, an account controlled by Karasarides,  George Georgekopoulos, and Pete  Georgekopoulos.

The defendants and seven companies were indicted on counts of engaging in a pattern of corrupt activity, conspiracy, gambling, operating a gambling house, and money laundering.

Attorney General Mike Dewine said he went before state legislators with the illegal internet cafe issue last year, now the problem has grown even bigger. "We don't know who runs them we don't know who owns them we don't know if they have criminal records not have criminal records they are ripe for money laundering it's literally the wild wild est in the state of Ohio," he said.

Mason said he made the decision not to charge patrons who've been playing these games at the illegal cafes. Today they sent letters to the owners of the establishments ordering them to shut down to forego facing criminal charges. However, if they choose to remain open, Mason said they'll face legal consequences.

On your side, Shay Harris, NewsChannel 5.

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