Rebecca S. Green | The Journal Gazette
Four months after state gaming agents raided a local internet café, the businesses owners and some employees are charged with running a professional gambling racket and money laundering.
In late December, Indiana Gaming Commission agents raided Lincoln Plaza Internet Sensations in New Haven and Wrigley Field Bar and Grill, removing a total of 51 machines after two undercover investigations.
On Friday, Allen County prosecutors charged Fort Wayne residents Edward G. Miers, 26, of the 2600 block of Kingston Place, and Matthew Rae, 28, of the 6300 block of Kiwanis Drive, with corrupt business influence, promoting professional gambling, professional gambling and money laundering. The two men operated Lincoln Plaza Internet Sensations, according to court documents.
The money laundering charge alleges they acquired, received, possessed or transferred the proceeds of the illegal professional gambling operation, according to court documents.
Prosecutors also charged Florida-resident Stephen W. Carnes, 48, with the same charges. Court documents identify Carnes as the managing member of Buckwheat Holdings, LLC and Lincoln Plaza Internet Sensations, which share the same address on file with the Indiana Secretary of State.
The two companies are also charged with promoting professional gambling and professional gambling. Charging the companies allows the state, if it receives a conviction, to collect a fine from them, said Allen County Chief Deputy Prosecutor Michael McAlexander.
A fourth man, 36-year-old Jared Hochstedler, of the 700 block of Misty Court, is charged with professional gambling and money laundering.
According to court documents, Lincoln Plaza Internet Sensations sold “internet air time” for $5 an hour. For each hour purchased, customers received five free sweepstakes credits, which could then be used to place bets on “Vegas style games” accessed from Lincoln Plaza Internet Sensations computers.
Winners received $1 a winning credit, according to court documents.
Gaming agents conducted undercover investigations at the internet café, as well as at Wrigley Field Bar and Grill – where similar machines were placed.
The machines were all owned, according to court documents, by Carnes, but were installed at Wrigley Field Bar and Grill and other bars by Hochstedler and Rae.
In September, the state’s Alcohol and Tobacco Commission issued a notice declaring “sweepstakes machines” to be “electronic gaming devices,” according to court documents.
Another memo was issued Dec. 19, saying “sweepstakes machines” popping up in bars, restaurants, convenience stores and other premises that sold alcohol were not allowed, even for businesses authorized to have pull-tab-type games. State officials said at the time of the raids that Internet sweepstakes machines can quickly become a problem and already have become prevalent in states such as Ohio, North Carolina and Florida.
But those who run such cafes say the machines are analogous to McDonald Restaurant’s “Monopoly” game, where customers buy food, get a ticket and have a chance to win.
“Simply put, the sweepstakes machines are our Monopoly game and the Internet or phone time is our cheeseburger. This makes it legal,” said court documents quoting a website selling sweepstakes machines.
Since the December raid, attorneys representing Buckwheat Holdings filed a lawsuit in Marion County Superior Court, seeking a determination against the Indiana Alcohol and Tobacco Commission that the machines are not electronic gaming devices.
According to court documents, a Marion Superior Court judge ruled against Buckwheat Holdings, saying that the customers are paying for gambling games whether they receive internet time with their purchase.
In January, Buckwheat Holdings’ attorneys filed a federal lawsuit in the U.S. District Court in Fort Wayne, asking a judge to find the gaming agents reliance on the state’s gaming laws are misguided, and to determine the seizure of the machines violated the company’s constitutional rights.
That case is still pending, with attorneys for the State of Indiana asking for a delay to allow the issues to be decided in a state court, according to federal court records.
In January 2011, Edward G. Miers’ father, Edward Miers, received a sentence of probation for his connection to an illegal charity gaming operation – the Parnell Poker Palace. Edward Miers was originally charged with a felony charge of professional gambling.
Edward R. Miers and Carnes have another business together – using the same 160 East Lake Brantley Drive, Longwood, Fla. address as Buckwheat Holdings and Lincoln Plaza Internet Sensations. That one, called “Kryptos” offers an application for Blackberry, iPhone and Android smart phones that purports to offer an encrypted voice services, according to the company’s website.
On his own website, in a picture posing in front of an FBI building, Carnes said he is president and CEO of Kryptos Communications.
rgreen@jg.net
