Software developer for gambling faces jail sentence in the US

On January 8, 2013, hearings on the case of Robert Stuart and his Extension Software will begin in the District Court in New York.

Extension Software has been developing Action Sportsbook International (“ASI”) software for bookmaker servers for over a decade. Gambling, including sports betting, is prohibited in the United States. The investigation found that the company Extension Software received about $ 2.3 million of income from transactions with customers who conducted illegal activities in the United States. Accordingly, the programmer wants to impute complicity with criminals and money laundering.

Robert Stewart claims that he sold software only to foreign companies and does not know anything about the facts of illegal gambling in the United States. Moreover, its program itself does not make bets, but only allows you to select events for display on the site and stores information about the bets made.
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The author of the software is confident that in no case is not responsible for the fact that its development could be used for illegal purposes. He just sells a software license.

The prosecutor's office considers otherwise and considers this criminal case as a matter of principle. In a press release from the New York City Prosecutor’s Office, Extension Software is accused of “promoting” online gambling and “making a profit” from illegal activities. The prosecutor's office believes that the accused has helped in creating a large-scale infrastructure for illegal gambling.

Extension Software customers paid a quarterly fee for using ASI. These firms are registered in the Caribbean islands, Canada or Costa Rica, but in reality the sites are designed for an American audience. Quarterly fee was usually from $ 6 thousand to $ 45 thousand from each site. At the moment, Extension Software has about 20 clients, among them there is not a single American company.

If the court ends with a conviction, it will become a dangerous precedent for software developers in the United States: it turns out that they can be held responsible for illegal actions of users.

Robert Stewart expresses the idea that the prosecutor’s office is simply taking revenge for his refusal to cooperate with the authorities. Law enforcement agencies in February 2011 sought help in developing and installing a backdoor to collect the names and passwords of citizens who enter illegal sites with sports betting, the text of the agreement (pdf). The programmer was particularly angered by the fact that the authorities themselves were not going to develop anything, he had to do all the work, including using the backdoor. “They made it clear that they themselves are not going to do anything. It was supposed that I had to do everything, change the system in such a way as to be able to get inside and extract the information they need, says Robert Stewart. “Their plan was for me to extract information from these databases that are in other countries ... They were going to use me to get to clients ... But I am not a hacker, I am a programmer.”

In case of refusal, he was threatened with a prison term of up to 35 years. Separately, it should be noted that he was forced to sign a cooperation agreement the next day after his arrest, when the house was stormed by a detachment of 30 armed special forces (SWAT) soldiers. Later, realizing the dubious nature of the task of setting the backdoor and consulting with competent lawyers, Robert Stewart decided to withdraw from the agreement - and go to court.