Jay Cohen Sentenced to 21 Months in Prison

Jay Cohen, who co-founded online sports book World Sports Exchange (WSEX) in Antigua and who earlier this year became the first American ever convicted of Internet bookmaking, today learned his punishment --- 21 months in federal prison and a $5,000 fine.

Cohen was sentenced this afternoon in U.S. District Court in Manhattan by Judge Thomas P. Griesa for his February conviction on charges he ran an illegal sports betting service via the Internet and telephone.

After a two-week jury trial that ended Feb. 28, Cohen was found guilty on seven felony counts of violating the Federal Interstate Wire Act of 1961, by accepting sports wagers over a wire transmission facility. He was also found guilty of one felony count of conspiracy to violate the Wire Act.

Cohen could have received as much as 19 years in prison and a fine as high as $2 million. He has stated through his attorney, Ben Brafman, that he intends to appeal his conviction.

The judge permitted Cohen to remain out of jail until his appeal is heard.

Jay Charles Cohen, 33, grew up in Woodmere, Long Island, New York, and attended the University of California at Berkeley, where he received a degree in nuclear engineering.

After graduation, he took a job at San Francisco's stock market, the Pacific Stock Exchange, where he met an older trader and small-time bookie from Chicago named Steve Schillinger.

A few years later, in 1996, Cohen and Schillinger headed for the Caribbean island nation of Antigua, where in 1997 they opened WSEX. Schillinger had resigned his membership in the Exchange after Exchange officials questioned him about booking sports bets on the Exchange floor.

In 1998, Cohen, Schillinger and two other WSEX employees, plus 17 other Americans from eight other offshore sports betting operations in the Caribbean, were charged by the U.S. government with accepting sports wagers from the U.S. via the Internet and/or telephone.

Cohen, professing his innocence, was the only one of the 21 to demand a court trial on the charges.

Despite Cohen's conviction, WSEX remains open and continues to book online and telephone sports wagers.

In a press release issued by the U.S. Attorney's Office for the Southern District of New York immediately after Cohen's sentencing today, U.S. Attorney Mary Jo White stated:

"Jay Cohen's sentence demonstrates that violations of the Federal Wire Wager Act by sports book operators who take bets from Americans will result in vigorous prosecution, regardless of whether the sports book operator is located in the U.S. or offshore, and regardless whether the business uses the Internet or more traditional forms of communications.

"People who decide to operate a sports betting business from foreign shores that takes sports bets from Americans should understand that they cannot escape the consequences of their actions by locating their sports books outside the U.S.

"An Internet communication is no different than a telephone call for purposes of liability under the Wire Wager Act. The law criminalizes taking bets from Americans using interstate and international phone lines, whether those phone lines are connected to regular telephones or to personal computers linked to the Internet.

"As this case demonstrates, persons convicted of operating Internet sports books offshore face very serious consequences --- imprisonment and thousands of dollars in fines."