02/25/2009 12:00AM

Guilty plea in IRG investigation

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One of two defendants in a case linked to the defunct offshore rebate shop International Racing Group has pleaded guilty to two felony charges of conducting an illegal gambling business and money laundering, according to court documents.

Sentencing for the defendant, Jeffrey Jelinsky, has been scheduled for May 29 in U.S. District Court in Nevada. The plea agreement states that prosecutors are recommending that Jelinsky serve a 21-month prison term, be subject to three years of parole, and forfeit all assets linked to the illegal gambling business.

Jelinsky and his brother Michael were charged with three felony counts by the U.S. attorney in Nevada in a criminal information document filed with the district court on Feb. 18. The plea agreement states that the brothers operated an illegal gambling business from Nevada during 2006 and 2007 in which they took wagers from individual bettors from more than a half-dozen states and either placed those wagers through offshore accounts, laid off the bets through their own accounts, or booked the wagers themselves.

The forfeited assets included three accounts at IRG with total deposits of almost $1.5 million. IRG was closed in early 2008 after its parent company, Youbet.com, said that betting through the shop had plummeted. Youbet.com had earlier acknowledged that Nevada authorities were investigating several of its customers and had seized customer accounts.

Michael Jelinksy has not entered a plea yet. The court documents state that Jeffrey Jelinsky's plea agreement will be invalidated if his brother pleads not guilty.