DOJ indicts Cory Zeidman for ‘massive fraud scheme’ involving sports betting

Haley Hintze
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Posted on: May 25, 2022 1:31 pm EDT

The U.S. Department of Justice today unsealed a two-count indictment against Florida poker and gambling professional Cory Zeidman, naming him as the alleged leader of a group based in Florida and New York that committed “wire fraud, mail fraud, and money laundering conspiracy in connection with a sports betting fraud scheme” that Zeidman operated from New York and Florida.

Zeidman was arrested at his home in Boca Raton, Florida and will make his initial court appearance in a Miami federal courtroom. The complaint alleges that Zeidman and others earned tens of millions from a long-running scheme, stretching from 2004 to at least 2020, in which Zeidman’s group claimed to have inside information related to large numbers of sports bets throughout the years and thereby deceived his sports-betting clients.

The two-count indictment against Zeidman asserts that Zeidman held a leadership role in the “Phoenix Organization,” and that the group ran national radio ads for a “sophisticated white-collar approach to gathering sports information” and promised “wagering as investing, not high-risk gambling.”

The ads offered a dial-in phone number, and once bettors did so, they are alleged to have been told by Zeidman and other Phoenix Organization co-conspirators that certain sporting events were fixed, and that the group’s operators already knew the outcomes of the events. Zeidman and the other conspirators are accused of pulling in at least $25 million through the long-running “tout” fraud. Consumers had to pay fees to receive the information, which was either obtained from Internet searches or was entirely fictitious. Some customers are alleged to have lost their life savings through the fraudulent sports-betting schemes.

Many of the case’s claims appear based on information provided to investigators by an unnamed “Co-Conspirator #1,” who like Zeidman was another high-ranking member of the group, and who also lives in south Florida. The co-conspirator may have agreed to cooperate in exchange for amnesty or reduced charges related to the case.

DOJ statement summarizes case against Zeidman

The DOJ’s Eastern District of New York issued a press release summarizing the charges levied against Zeidman. According to the DOJ:

“As alleged, Zeidman defrauded his victims, stole their life savings and persuaded them to drain their retirement accounts to invest in his bogus sports betting group, all so he could spend it on international vacations, a multi-million dollar residence and poker tournaments,” said U.S. Attorney Breon Peace. “Today’s indictment serves as a reminder to all of us to be wary of so-called investment opportunities that purport to have inside information, as they are really a gamble not worth taking.”

“As alleged, Zeidman preyed on individuals who were led to believe he had inside information that would lead them to easy money. In reality, he was selling nothing but lies and misinformation— bilking millions from victims along the way, leaving their lives in financial ruin and their bank accounts empty,” stated HSI New York Acting Special Agent in Charge Ricky J. Patel. “HSI will continue to work together with our partners to follow the money and tackle complex financial investigations to bring to justice fraudsters like Zeidman, who finance their lavish lifestyles by concocting ways to bamboozle the innocent when their only real goal is lining their pockets with ill-gotten cash.”

“Mr. Zeidman took advantage of the public’s interest to “get in on the ground floor” of his sports betting organization. He devised a criminal scheme to fatten his pockets using nothing more than people’s love for sports and his clever words wrapped around a fraud. Postal Inspectors remind investors to thoroughly review all investment offers to ensure they are not left with a line of empty promises and a drained bank account,” said Inspector in Charge Brubaker.

Zeidman is alleged to have used numerous aliases in the course of enacting the frauds, including Richard Barnes, Walter Barr, Mr. Carlyle, Ray Palmer, Rick Cash, Elliot Stern, Gordon Howard, David Coates, Simon Coates, Paul Knox, Mark Lewis, Joel Orenstein, and Steve Nash. Several different company names were used as well, including Gordon Howard Global, Ray Palmer Group, and Grant Sports International. 

Zeidman won WSOP bracelet in 2012

Zeidman is a well-known figure in the high-stakes poker world, having appeared on several televised high-stakes cash-game productions over the years. He plays most formats and is generally recognized as a strong mixed-games player. At the 2012 WSOP, Zeidman won the $1,500 Seven Card Stud Hi-Lo 8 or Better bracelet event, topping a 622-entry field to win a live-tournament best $201,559.

According to TheHendonMob’s results database, Zeidman has collected over $690,000 in tourney cashes stretching back to 1997 and including a WSOP cash as recently as 2019. Over half of that amount, more than $373,000, has come in his 14 recorded WSOP cashes.

The USAO Eastern District of New York statement did not specify the range of possible penalties facing Zeidman. Such penalties could include significant fines, and jail time or probation, but can vary widely based on factors such as the severity of offense, previous criminal history, remorsefulness, and willingness to cooperate with authorities. The scope and length of the alleged fraud may place Zeidman, if found guilty of any charges, into a category where jail time is a possible outcome of the case.

Featured image source: World Series of Poker