BEAUMONT, Texas — A Beaumont businessman, along with his wife and son, pleaded guilty to federal violations of tax evasion and laundering the proceeds of illegal gambling on Tuesday.
Larry, Judy, and Brian Tillery appeared in federal court and could face several years in federal prison.
Prosecutors say Larry Tillery, 69, was involved in illegal sports betting for more than 30 years.
In 2017, federal agents raided "Daylight Motors" and seized nearly $6 million in property and cash.
Two years later, the family is owning up to their wrongdoing.
The Tillery's appeared in court Tuesday before Judge Keith F. Giblin to enter what's called "pleas to an information."
Former federal prosecutor Baylor Wortham spoke with 12News to explain what that means.
"When you have someone who has been the target of an investigation, often both sides know that charges are likely to be forthcoming," said Wortham. "The parties can then come together and you can enter a plea to an information."
Wortham adds this agreement waves each of the family member's right to be indicted and typically speeds up the judicial process.
Wortham said "Often they find a way to mitigate their exposure if they feel like they want to accept responsibility and then limit the possible exposure they would have if they were to go to trial and be found guilty."
Prosecutors claim Larry Tillery accepted $52 million in sports bets and failed to pay more than a million dollars in taxes.
The Tillery's own Daylight Motors and Lamar Capital, a so-called "holding company" for Daylight Motors.
Tillery and his wife, Judy, have already surrendered $1.7 million in cash, jewelry and sports memorabilia as part of the agreement.
12News spoke with Tillery's longtime friend Paul Chargois over the phone on Tuesday.
"Larry is a very soft-hearted, kind and generous man," said Chargois. "I could go on for hours about his generosity to the community, especially to the unfortunate in our community."
He admits Tillery isn't perfect and told us that Tillery wants to use this situation as an example of the dangers to gambling.
Chargois says "Vowed to his dying day, to explain the terrors and misfortunes of people who get involved, especially with casino gambling."
Tillery has admitted to his mistakes and is willing to serve his time in prison according to Chargois.
The Tillery's attorney, Chip B. Lewis, issued a statement on Tuesday saying "Today {Tuesday} is the latest step in Mr. Tillery's efforts to handle his business with the IRS. The Tillery family sincerely appreciates the overwhelming love and support offered by so many good people across southeast Texas."
The statement continued in stating "I've handled quite a few cases and I have never encountered a more beloved man. Mr. Tillery's kindness and generosity has benefited countless folks in this community."
Larry Tillery could face up to 10 years in prison with his wife and son facing up to 5 years.
From a Department of Justice news release:
A Beaumont businessman, his wife, and son have pleaded guilty to federal violations in the Eastern District of Texas, announced U.S. Attorney Joseph D. Brown today.
Larry Earnest Tillery, 69, Judy Kay Tillery, 62, and Brian Tillery, 46, all of Beaumont, appeared in federal court 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. Judy Tillery structured these cash deposits in amounts under $10,000 in an attempt to evade federal currency transaction reporting requirements.
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.
As part of the plea agreement, Larry and Judy Tillery are agreeing to forfeit $1,738,455 in cash seized during the investigation; numerous luxury watches and pieces of jewelry; and several professional sports memorabilia items. They have also agreed to a money judgment of $32,758,541, representative of illegal wagers the Tillery sports gambling enterprise during the relevant time period.
“The Tillerys ignored state and federal gambling laws, and profited tremendously from a criminal enterprise,” said U.S. Attorney Joseph D. Brown. “We intend to collect every bit of the money judgment that will be issued against them, and we expect Larry Tillery’s prison sentence to send a message to those who profit from illegal bookmaking.”
“For more than 30 years this family operated one of the largest illegal sports gambling and money laundering operations in the U.S.,” said Assistant Special Agent in Charge (ASAC) Mary Magness, Homeland Security Investigations (HSI) Houston. “Today’s pleas underscore HSI’s commitment to aggressively investigate financial crimes and bring offenders to justice.”
“Concealing or transferring assets in an attempt to evade taxes is a crime, and IRS-CI is committed to prosecuting individuals that do so,” said Rusty Lee, Assistant Special Agent in Charge, IRS Criminal Investigation.
As part of his plea agreement, Brian Tillery agrees to forfeit $241,176 in U.S. currency seized during the investigation and a residence valued at approximately $600,000 located on Christina Court in Beaumont. He has also agreed to a money judgment of $700,000.
Under federal statutes, Larry Tillery faces up to 10 years in federal prison. Judy Tillery and Brian Tillery each face up to five years in federal prison. The maximum statutory sentences prescribed by Congress is provided her for information purposes, as the sentences will be determined by the court based on the advisory sentencing guidelines and other statutory factors. Sentencing hearings will be scheduled after the completion of presentence investigations by the U.S. Probation Office.
This case was investigated by Homeland Security Investigations and the Internal Revenue Service, Criminal Investigation, and is being prosecuted by Assistant U.S. Attorneys Christopher T. Tortorice and Joseph R. Batte.
Former federal prosecutor baylor wortham explains what that means.
Wortham says "When you have someone who has been the target of an investigation, often both sides know that charges are likely to be forthcoming. The parties can then come together and you can enter a plea to an information."
He says this agreement waves their right to be indicted and should "Speed up" the judicial process.
Wortham says "Often they find a way to mitigate their exposure if they feel like they want to accept responsibility and then limit the possible exposure they would have if they were to go to trial and be found guilty."
Prosecutors claim larry tillery accepted 52-million dollars in sports bets and failed to pay more than a million dollars in taxes.
The tillerys own daylight motors, and lamar capital, a so-called 'holding company' for daylight motors.
Tillery and his wife...62-year-old...Judy tillery...Have already surrendered one- point 7 million dollars in cash, jewelry and sports memorabilia as part of the agreement.
Chargois says "Larry is a very soft-hearted kind and generous man. I could go on for hours about his generosity to the community, especially to the unfortunate in our community."
Tillery's longtime friend paul chargois (cha-gwah) admits tillery isn't perfect.
He says tillery wants wants to use this situation to warn others about *gambling.
(chargois says) "Vowed to his dying day, to explain the terrors and misfortunes of people who get involved, especially with casino gambling."
Chargois says (cha-gwah)-- tillery has admitted to his mistakes and is willing to serve his time in prison.
The tillery's attorney issued a statement to 12news.
He says in quote---
"This is the latest step in mr. Tillery's efforts to handle his business with the I-r-s. The tillery family sincerely appreciates the overwhelming love and support offered by so many good people across southeast texas."
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Larry tillery could face up to 10 years in prison.
His wife and son face up to 5 years in federal prison.
Tyler seggerman, 12news.