It all started when a confidential information quietly told his FBI handler that an El Pasoan was running an illegal gambling business out of west El Paso. During the October 1998 meeting, the informant told the FBI that another El Pasoan, with a family history going back to the founding fathers of El Paso would regularly travel to Las Vegas to “lay off” bets for gamblers. In January 1999, agents of the Federal Bureau of Investigation (FBI) and the Internal Revenue Service (IRS) went undercover hunting down El Pasoans running one of the largest illegal gambling operations in the FBI’s history. During the arrests they found a ledger containing the names and addresses of over 200 people placing illegal wagers – some of whom were well-respected El Pasoans.
The undercover investigation would soon reveal three more people “operating a nationwide multimillion-dollar sports gambling operation” in west El Paso. The illegal gambling operation would come to an end after the 2000 Super Bowl, known for the “One Yard Short,” netted over $300,000 in illegal gambling revenues to the ring. A sixth El Pasoan would soon be revealed. The arrests led to several high-profile El Pasoans wondering if they were the next to be arrested after it was revealed that a gambling ledger was in the possession of government officials.
The “McNutt Gambling Operation”
In 1993, five El Pasoans launched an illegal gambling business using mailers and the internet to accept illegal bets from hundreds of people. When federal agents entered the strip mall business on North Mesa, they found what they needed – computers, betting guides, money, wagering slips, and most important, a ledger detailing several people who had placed bets. Among the betting paraphernalia included television sets connected to Direct TV sports channels.
James Howell Donaldson and William R. McNutt established the illegal gambling operation in early 1993 offering sports betting to gamblers. To help reach more gamblers, Donaldson and McNutt purchased a list of gamblers from Albert Malooly, Jr. Malooly had been running his own illegal betting operation which held a list of gamblers. For the list, Malooly was paid 20% of the revenues generated from his clients…