A bookmaker and a poker-game manager in Wichita entered guilty pleas to federal charges of income tax evasion and operating illegal businesses tied to a broader investigation into high-stakes gambling.
Tom Beall, the U.S. attorney for Kansas, said Danny Chapman, 67, and Daven Flax, 46, could be sentenced in U.S. District Court to five years in prison and fined $250,000 on the gambling charge alone.
Names of Chapman and Flax surfaced in letters from the U.S. Department of Justice indicating their telephone calls were intercepted in 2015 in an investigation that also touched Sedgwick County Commissioner Michael O’Donnell, a former Republican state senator, and prominent Wichita car dealer and top-ranked poker tournament player Brandon Steven.
Steven and his brother, Rodney, were major investors in a failed bid to secure an exclusive license to build a state-sanctioned casino in southeast Kansas.
In 2015, state regulators selected a different investment group to develop the casino, but the Steven brothers filed a lawsuit challenging the decision.
In a statement Friday, Beall said Chapman was a sports bookmaker in the Wichita area who failed to pay $345,000 in tax on earnings from illegal gaming. Chapman and his subordinates arranged for clients to place bets through online gambling sites created and hosted in Costa Rica.
Chapman attempted to hide illicit income by buying vehicles with cash and registering them in the names of other people, the prosecutor said. In addition, he purchased money orders and cashier’s checks using the names of family members.
He pleaded guilty to one count of operating an illegal gambling business and one count of tax evasion.
Beall also said Flax pleaded guilty to two counts of operating an illegal gambling business and a single count of making a false statement on a tax return.
Flax, who was among the bookies working for Chapman, admitted to operating invitation-only poker games in various commercial locations in Wichita. He was responsible for paying dealers, caterers and waitresses where the games were held.
Flax also failed to pay more than $65,000 in federal income taxes on earnings from illegal gambling.