Tillery Family, Tax Evasion and Laundering of Gambling Proceeds, Texas 2023

A Beaumont family's illicit sports betting operation has come to an end, with the father, mother, and son all pleading guilty to tax evasion and money laundering charges.

Larry Earnest Tillery, 69, Judy Kay Tillery, 62, and Brian Tillery, 46, all of Beaumont, Texas, appeared in federal court on today before U.S. Magistrate Judge Keith F. Giblin to enter their pleas to an Information.

Larry Tillery pleaded guilty to engaging in monetary transactions in property derived from specified unlawful activity and tax evasion. Judy Tillery pleaded guilty to structuring of financial transactions to evade reporting requirements. Brian Tillery pleaded guilty to engaging in monetary transactions in property derived from specified unlawful activity.

According to information presented in court, Larry Tillery was engaged in the business of accepting illegal wagers on sporting events from 1985 until April, 2017, and was his primary occupation during that time. Tillery owned and operated Daylight Motors, a used car dealership, and Lamar Capital, a holding company for Daylight Motors, and used these two companies as a front to launder illicit proceeds from his illegal gambling enterprise.

Tillery used a website to receive and track wagers from his betting clients, allowing his bettors to place wagers on sporting events, including professional and collegiate basketball, baseball and football games. Judy Tillery assisted her husband in laundering cash proceeds of his illegal bookmaking activities by depositing cash into her personal bank account at Beaumont Community Credit Union in Beaumont, Texas, and then writing checks to bank accounts controlled by her husband.

Brian Tillery, Larry Tillery's son, aided the bookmaking enterprise by collecting money from sports bettors and making payments to bettors on behalf of his father; checking the online wagers on a regular basis to keep Larry Tillery aware of what bets were placed on which games; accepting illegal gambling funds from Larry Tillery and making wire transfers to pay illegal gambling debts for Larry Tillery; and mailing packages of currency in excess of $10,000 via the United States Postal Service at the request of Larry Tillery, which was derived from illegal gambling activities.

Larry Tillery knew that despite the fact that he was violating Texas state and federal law, federal law nonetheless required him to register as a bookmaker with the Internal Revenue Service and to file monthly excise tax returns to report total wagers he accepted during the month. Tillery also knew that he was required to pay gross wagering excise taxes of 2% on wagers he accepted each month. But, Tillery failed to report or pay any taxes to the IRS based on the wagers he accepted each month.

During September through November of 2016, Larry Tillery accepted at least 450 wagers totaling $5,060,150. These wagers are subject to the two percent federal gross wagering excise tax and Larry Tillery evaded gross excise wagering taxes of $29,717 in September 2016, $34,423 in October 2016 and $37,063 in November 2016 for a three month total of $101,203.

Between 2011 and 2016, Tillery accepted at least $52 million in illegal wagers on sporting events. Tillery did not report these wagers to the IRS or pay gross excise taxes. The gross wagering taxes that resulted from wagers Larry Tillery accepted between 2011 and 2016 total $1,040,000. This tax due figure includes $101,203 in gross wagering excise taxes listed above in this document for wagers accepted in September 2016 – November 2016.

The investigation traced a total of 125 financial transactions in excess of $10,000 derived from illegal gambling that utilized the United States banking system. These financial transactions totaled more than $32 million between 2010 and 2016.

The outcome of the case is still pending, and further details will be released once the court has reached a decision.

Source: https://www.justice.gov/usao-edtx/pr/beaumont-family-guilty-tax-evasion-and-laundering-gambling-proceeds