02/16/11 — Family pleads to illegal lottery ring

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Family pleads to illegal lottery ring

By Steve Herring
Published in News on February 16, 2011 1:46 PM

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News-Argus file photo

This photo shows the exterior of the former Murphy's Place in Mount Olive. Two years ago law enforcement officials raided it while investigating an illegal "numbers" racket. On Tuesday, local, state and federal officials announced that five people had pleaded guilty in federal court to running an illegal lottery ring based on the state lottery's "Pick Three" numbers.

MOUNT OLIVE -- A 3-year-old case involving an illegal "numbers" lottery operation spread over several counties that made use of runners, bag men, count houses and generated more than $1 million in income for its female banker/manager moved closer to a resolution Monday.

Five residents, four of whom are related, of the Rones Chapel community east of town in Duplin County, pleaded guilty Monday in federal district court in New Bern to charges stemming from an investigation begun three years ago into what Duplin County Sheriff Blake Wallace calls a "major gambling operation."

Brothers Ronald Dean Sox and Jeffrey Brandon Sox, along with Roy Lee Beavers and Wayne Douglas Whaley, all pleaded guilty to conspiracy to commit money laundering.

Vonnie Lynn Beavers Sox, wife of Ronald Sox and Beaver's sister, pleaded guilty to one count of tax conspiracy.

It will be at least 90 days before they are sentenced.

The four men allegedly conspired to conduct and attempted to conduct financial transactions affecting interstate commerce knowing that the transactions involved proceeds from an illegal activity -- gambling.

The scheme involved a gambling operation tied to authorized state lotteries that used the "Pick Three" type lottery results on the Eastern Seaboard to determine the winners.

The men face up to 20 years in prison, three years of supervised release and up to a $500,000 fine each or twice the value of property involved in the transactions, said officials with the U.S. Attorney's office in Raleigh.

Mrs. Sox, the alleged banker/manager for the operation, could receive up to five years in prison and no more than five years of supervised release and up to a $250,000 fine.

As banker/manager, Mrs. Sox "ultimately received the profits from the operation and determined how others would be paid," according to court documents.

All face forfeiture of property as well.

Mrs. Sox allegedly operated the illegal gambling operation, managed primarily out of her home and adjacent buildings, from May 2001 until March 2008. The gambling was in Wayne, Duplin and Pender counties.

The documents add that the gambling activity involved family members and friends related to placing bets, gathering the money, creating records and transferring money and records to Mrs. Sox and others.

It was alleged that "substantial taxable income" was generated by the gambling operation, and that the profits were deposited and used to "perpetuate" the operation.

The documents allege that Mrs. Sox's income for the tax years of 2003 to 2007 was $1,159,072 for which approximately $339,435 in taxes were due. It further alleges that Mrs. Sox failed to report the gambling profits as income on her federal income tax forms for 2003 and 2004.

According to the documents, Mr. and Mrs. Sox did not file tax returns for 2005, 2006 and 2007.

The court documents allege that the men participated at various times in all or part of the gambling operation and that they would:

* Handle the bets placed with writers who would deliver the accounts, numbers and cash to a pick-up person or runner,

* Act as runners who would deliver the wagers to a bag person and oversee a group of writers.

* Function as a bag person who would deliver the bets and monies to the count houses where others acted as a central accounting office.

People working in the count house would account for the betting transactions and keep records.

They were "directly controlled by the person acting as the manager or banker who is the financier or head of the gambling operation," the documents state.

Profits were used to pay those involved, the winners and used for expenses associated with the gambling organization. In turn, the money was used to promote the organization as well as to purchase personal property and real estate.

The charges are the result of an investigation that led to raids on March 11, 2008, at the home of Ronald and Vonnie Sox and at Murphy's Restaurant and bar that Mrs. Sox owned on North Center Street in Mount Olive. The restaurant has since moved to downtown Goldsboro.The raids were headed by the Duplin County Sheriff's Office. Federal authorities, Wayne deputies and Mount Olive police assisted.

It was a major operation involving a "significant amount of money," Wallace said during a Monday afternoon press conference.

"It was a very large and well-organized gambling operation," he said.

"The judge has ordered pre-sentence investigation to be done on each of the defendants. Beyond that, the U.S. Attorney's office has asked us not to release any additional information until after sentencing."

The pre-sentencing investigation is "not unusual," Wallace said. It is an attempt to get mitigating and aggravating factors together before sentencing, he said.

It will show the judge what trouble they have been in in the past and what contributions they might have made to the community, Wallace added.

The pleas have been in the making and hopefully will begin the final chapter of the case, Wallace said.

"The federal government goes at its own pace. They don't get in a hurry," he said. "We are very thankful for the cooperation we received from the Internal Revenue Service and the U.S. Attorney's office."