UPDATE: Two New Guilty Pleas in Ongoing Helly Nahmad Gambling Ring Case

September 9, 2013

Justin Smith and Edwin Ting are the most recent to plead guilty in the government’s ongoing case against 34 defendants indicted for their alleged roles in an international gambling and money-laundering ring. The illicit operation purportedly stretched from the United States to Russia and catered to high rolling clientele including celebrities. Among the most famous defendants to art world connoisseurs was Helly Nahmad—gallery owner and heir to the Nahmad family art-dealing dynasty, started by his grandfather Hillel and truly built by his father David and uncle Ezra. According to the indictment, Helly was one of the leaders of a “high-stakes illegal gambling business run out of New York City and Los Angeles that catered primarily to multimillionaire and billionaire clients,” laundering over $100 million in gambling money. The indictments against the defendants included a range of offenses, including racketeering, international money laundering, and extortion.

News of the indictments broke earlier this year in April, when FBI agents raided the Helly Nahmad Gallery, located in Manhattan’s Carlyle Hotel. Nahmad is also alleged to have committed wire fraud related to the sale of a painting. News of the original indictments was reported here. Nahmad entered a plea of not guilty.

These recent pleas are the fourth and fifth to date. Bryan Zuriff—one of the executive producers on AMC’s Ray Donovan—was the first defendant to plead guilty in July. He may be facing up to five years in prison and has already paid $500,000 as part of his plea deal. Then, in August, two more followed suit. William Barbalat pleaded guilty to “traveling in interstate commerce in aid of an unlawful activity, the operation of an illegal poker game. Kirill Rapoport pleaded guilty to “conducting an illegal gambling business, an illegal poker game.” Barbalat and Rapoport each face a maximum sentence of five years in prison and three years of supervised release. As part of their plea agreements, Barbalat agreed to forfeit $150,000 and Rapoport $250,000 to the United States government.

Although Nahmad continues to assert his innocence, the indictment refers to one of the two alleged illegal gambling rings as the “Nahmad-Trincher Organization,” which was financed in part by Nahmad’s Manhattan gallery. Manhattan U.S. Attorney Preet Bharara stated that Smith and Ting ran illegal sports and poker gambling operations that “handled many millions of dollars… They were part of an underground enterprise trying to be invisible to law enforcement.” Smith allegedly assisted Nahmad and others in placing tens of millions of dollars of online bets through gambling websites. He pled guilty to “accepting a financial instrument in connection with unlawful Internet gambling, an illegal sportsbook.” Ting pled guilty to running an illegal gambling business.

What will be the effect of these and continued guilty pleas on Helly’s case? His lawyer, Benjamin Brafman, has previously denied the charges, stating that he does not believe Helly knowingly violated the law and expected a favorable outcome for his client. Apparently, the infamous dealer/playboy was not deterred by recent events and continues to frequent celebrity parties, at least according to NY Daily News. However, the more defendants plead guilty, the more others will be encouraged to follow suit. As additional information comes to light, increasing pressure will mount on remaining defendants to weigh their options and consider ways to escape harsher sentences. If convicted, Nahmad would face a maximum sentence of 92 years. As his trial date approaches, all eyes will be on Helly and the Nahmad clan.

Source: The Art Newspaper