DOJ's New Fraud Division Lands First Offshore Sportsbook Conviction

The Department of Justice's new National Fraud Enforcement Division has booked its first win against the offshore betting industry, sending a California operator to federal prison for running an illegal sports betting platform out of Costa Rica. Jason Noah Feinman, 52, of Calabasas, was sentenced on June 19, 2026 to 27 months and ordered to pay restitution, a fine, and forfeiture after pleading guilty to tax evasion, operating an illegal gambling business, and money laundering. The case is small in dollar terms, but it is the federal government's first named strike at the supply chain behind the black-market sports betting that the American Gaming Association estimates still moves $84 billion in US wagers a year.

The division Feinman ran afoul of did not exist a few months ago. President Donald Trump established the White House Task Force to Eliminate Fraud by executive order on March 16, 2026, chaired by Vice President J.D. Vance, and the DOJ stood up the National Fraud Enforcement Division as its prosecutorial arm, taking control of existing fraud components on April 7 alongside $300 million in announced anti-fraud funding. Feinman was among its first targets, which matters for an industry watching where a politically energized DOJ points its resources next. The same federal posture has shown up in the UK, where regulators are pressuring big tech over black-market gambling ads.

What the case actually proved

Feinman did not run a consumer-facing sportsbook. According to the federal complaint and his plea, he operated a betting-services website from 2015 through May 2024 that unlicensed local bookies used to book and lay off their own customers' action, with bettors in California and Costa Rica. That distinction is the legally interesting part: the DOJ went after the infrastructure provider, not the corner bookie, under the federal illegal gambling business statute. Feinman reported zero taxable income for 2018 through 2022 despite earning roughly $1.8 million in 2020 alone, and he claimed a $75,503 refund that year. He admitted evading tax on about $4.2 million in income.

The laundering count is where the offshore mechanics show. Between May 2018 and January 2024, a single Costa Rican associate identified only as "C.K." handed Feinman 18 checks, including one for $200,000, in exchange for roughly $1.5 million in cash, with the memo lines often dressed up as loans. Five Costa Rican conspirators took a cut to wash the proceeds. The court records, an eight-page complaint and a 36-page plea deal, never named the underlying bookmaking brand, which is consistent with how these service platforms hide behind incorporation rather than licensing.

Costa Rica is the structural reason this model persists. The country has no gaming regulator and issues no gambling licenses. An operator simply incorporates, at roughly $4,000 up front and $3,000 a year to renew, and runs sportsbook software for clients worldwide. That is the same jurisdiction that has long housed names US bettors recognize, and it is why a takedown of one operator does not dent the supply.

Why operators and affiliates should care

The numbers frame the gap between this case and the problem. Feinman's $4.2 million sits against an AGA estimate that Americans wager $84 billion a year with illegal bookies and offshore books, producing about $5 billion in operator revenue and $1 billion in lost taxes. The wider illegal and unregulated market runs $673.6 billion in annual handle, nearly a third of all US gaming and up 22% since 2022. One 27-month sentence does not move that, but it establishes a template the new division can scale: prosecute the platform and the money plumbing rather than chase individual bettors.

For the legal industry, that template is the point. Licensed sportsbooks have spent years arguing that the illegal market, not each other, is their real competitor, and several walked away from the AGA partly over strategy disputes after DraftKings and FanDuel left the trade body. A DOJ unit that treats offshore service providers as fraud targets gives that argument federal teeth. Affiliates carry the sharpest exposure. Anyone sending US traffic to a Costa Rica-incorporated book is now linking to an enterprise the government is willing to charge as an illegal gambling business and a money-laundering vehicle, the same pattern seen in foreign crackdowns from Brazil's freezing of illegal betting funds to the Hong Kong syndicate bust.

History says the ceiling on this is high once the DOJ commits. On April 15, 2011, prosecutors unsealed indictments against PokerStars, Full Tilt Poker, and Absolute Poker under UIGEA, bank fraud, and money-laundering theories, a day the poker world still calls Black Friday. PokerStars settled in 2012 by forfeiting $547 million and covering about $184 million owed to Full Tilt's foreign players, with total penalties reaching $731 million, and it acquired Full Tilt as part of the deal. That case started, like this one, with a criminal complaint and grew into a nine-figure forfeiture that reshaped a vertical. The Feinman conviction is the National Fraud Enforcement Division testing the same machinery on the sports-betting side.