California man sentenced in tax evasion and illegal offshore gambling case

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CA tax evasion gambling case

Highlights

Jason Noah Feinman sentenced for tax evasion, illegal gambling, and money laundering linked to a Costa Rica-based gambling website serving U.S. clients.
Feinman laundered between $1.5 million and $3.5 million from May 18, 2018 to Jan. 2, 2024 by exchanging cash for checks with customers.
Feinman reported no taxable income for 2020 despite earning about $1.8 million that year, with total unreported income from 2018–2022 reaching $4.2 million.

Sentence details and illicit business operations

As reported by the U.S. Department of Justice, Jason Noah Feinman is sentenced for tax evasion, operating an illegal gambling business, and money laundering tied to a Costa Rica-based operation. Court documents and statements made in court say the business ran a website used by unlicensed gambling operators to facilitate betting through sites maintained by Feinman, conduct that is illegal under state and federal law.

Prosecutors say Feinman also laundered proceeds from the business by swapping cash for checks written to him or to one of his companies. Between May 18, 2018, and Jan. 2, 2024, he gave one customer more than $1.5 million in cash and received 18 checks for an equivalent amount, while the total value of such exchanges ranged from $1.5 million to $3.5 million.

Feinman pleads guilty to one count each of tax evasion, operating an illegal gambling business, and money laundering.

Tax losses and enforcement impact

Authorities say Feinman evades taxes on income generated through the illegal gambling business from 2018 through 2022. In 2020 alone, he earns about $1.8 million but reports no taxable income to the IRS and pays no tax for that year, with total unreported income reaching about $4.2 million.

IRS Criminal Investigation and Homeland Security Investigations investigate the case. The announcement is made by Assistant Attorney General Colin McDonald of the Justice Department's National Fraud Enforcement Division and First Assistant U.S. Attorney Bilal A. Essayli for the Central District of California, while Trial Attorneys John C. Gerardi and Charles A. O'Reilly of the Criminal Division's Tax Section prosecute the matter.

U.S. lawmakers’ push to modernize digital asset tax rules was previously covered in our publication, as the House Ways and Means Committee advanced a proposal aimed at reducing reporting burdens and clarifying how common crypto transactions should be treated under the tax code. The initiative is framed as a way to improve compliance, close gaps that can be exploited, and keep the U.S. competitive as crypto ownership expands.

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