‘Sports Arbitrage’ Betting Program Was Investment Scam, Feds Say; Yul Na Indicted For Wire Fraud, Money-Laundering; Faces Up To 890 Years In Prison
A man has been indicted in Las Vegas for stealing nearly $1 million from investors by telling them they were participating in a “sports arbitrage” betting program and could not lose, federal prosecutors said.
An arrest warrant has been issued for Yul Na. He was charged in a criminal indictment with 30 counts of wire fraud and 29 counts of money laundering. Na faces up to 890 years in prison if convicted on all counts.
Prosecutors said Na used investors’ funds to do his own personal gambling in Las Vegas.
Some of the claims Na allegedly made were similar to claims made by the now-defunct Gold Nugget Invest (GNI) HYIP, which also purported to offer sports arbitrage. GNI tanked earlier this year.
“Na allegedly began marketing an investment opportunity to individuals involving the technique of ‘sports arbitrage’ for placing and accepting sports wagers,” prosecutors said. “Na claimed that investors would not lose money if they invested in this technique.
“Na defined the sports arbitrage program to the investors as ‘middling,’ because it involved the combination of betting both sides of the same event, as well as the use of specific timing for the placement of the sports wagers,” prosecutors continued.Â “[He] represented that opposing bets were placed at different times to capitalize on the movement in wagering lines by the sports books.Â Na represented that this placing of bets at different lines or payout ratios created an opportunity for profit.”
Part of the scheme featured a claim from Na that he had “an exclusive and binding agreement with Mandalay Bay Resort and Casino to accept large lay-off wagers” at a reduced rate of 18 percent, prosecutors said.
A layoff wager is a wager one bookmaker makes with another to balance bets and reduce risk.
Na told investors that, in order to minimize their risk, he had “contracted with an off-shore sports book to bet the other side of the same events for which he had accepted wagers from Mandalay Bay,” prosecutors said.
Because the offshore bookmaker purportedly charged a 10 percent premium on all wagers, Na “claimed that regardless of the outcome of an event, his sports arbitrage program would always achieve an overall net gain of 8 percent on all lay-off wagers accepted from the Mandalay Bay sports book,” prosecutors said.
Na’s claims were false, prosecutors said.
“[He]Â knew that he did not have in place any system to place bets for the purpose of ‘middling’ sports events and did not have any exclusive agreement with Mandalay Bay to accept lay-off wagers at a discount rate of 18 percent,” prosecutors said.
In furtherance of the scheme, Na advised investors to transfer their money electronically to Mandalay Bay’s bank account, instructing them to add “notations for the funds to be applied to[his]Â personal casino account,” prosecutors said.
“Na told investors that the funds had to be wired to his personal account because the casino could not accept wagers from any entity other than an individual,” prosecutors said.
Investors wired $962,350 to Na through this process, and heÂ “withdrew the funds and used them to gamble at Mandalay Bay instead of using them for the sports betting investment program,” prosecutors said.
Gold Nugget Invest collapsed in January. It told members on its website that sports arbitrage was a “market phenomenon based on pure mathematics.”
The government of Belize issued a warning on GNI in November.
GNI’s critics were accused of suffering from “mental illness.” Detractors also were told they did not understand that the program, which advertised a return of 7.5 percent a week and later reduced the purported payout to 20 percent a month with a “No Risk Wager,” was â€œreal.â€
After the collapse, GNI explained that its problems were caused in part by “catastrophic script failure(s)” and “potentially catastrophic hackers.”