Feds: Pa. company laundered video gambling proceeds

A Pennsylvania company is accused of maintaining hundreds of illegal video gambling machines across the northeastern area of the state and hiding the proceeds from the U.S. government.

Pennsylvania Coin LLC, based in Scranton, is charged with one federal count of conspiracy to commit money laundering, the U.S. Attorney's Office for the Middle District of Pennsylvania announced Wednesday.

Prosecutors said the company operated the video gambling machines at businesses in Luzerne, Lackawanna, Susquehanna, Wayne and Wyoming counties, beginning in January 2007.

Patrons would pay to play the devices, receiving cash payouts based on the number of credits they amassed, according to investigators.

The establishments' owners allegedly paid periodic fees to Pennsylvania Coin and split the video gambling proceeds with the company.

Prosecutors said Pennsylvania Coin deposited about $1.7 million in illegal proceeds into financial accounts, allegedly commingling the funds with legitimate business income to conceal their nature, source and amount.

The criminal charge stems from a series of raids in October 2012 during which agents from the Internal Revenue Service and the state police Bureau of Liquor Control Enforcement seized 288 gambling devices and nearly $78,000 in cash from 180 businesses, according to authorities.

Pennsylvania Coin has filed an agreement, subject to court approval, stipulating the company will plead guilty to the offense and forfeit to the government the seized machines, along with nearly $1.43 million, prosecutors said.