BY SEAN CHAFFIN One morning in 2011, just after sunrise, a swarm of federal agents rolled quietly down a neatly manicured cul-de-sac in Southlake, the city police's SWAT alongside them. They gathered outside the home of their target, a $750,000 spread with five bedrooms, five bathrooms and a swimming pool, all sitting on a tree-lined half-acre lot in perhaps Dallas' most idyllic suburb. Around 7, they knocked on the door, and waited.
There was no made-for-TV chaos, no upturned tables or scattering underlings. After a brief wait, the man they were there for, 57-year-old Albert Sidney Reed, approached the door, sleep still in his eyes. He was in his underwear.
Reed's teenage son looking on, police calmly handcuffed their target, and black-clad SWAT officers shuffled inside to sweep the 5,250-square foot house. When the all clear was given several minutes later, Reed was un-cuffed and allowed to dress. He sat in a chair inside for four hours as investigators sifted through his belongings, looking for proof of what they already knew.
About an hour into the search, another IRS agent stumbled across a satchel in Reed's SUV and shuffled through its contents: printouts of wagers, collection notes, business expenses, printouts of how much his betting operation profited during football season, even notes from a big meeting upper-level owners in the organization had recently conducted. Later, he made sure to introduce himself to the satchel's owner.
"I'm Special Agent Mark Parsons with the Internal Revenue Service," he said. "We're investigating the Global International Corporation bookmaking operation, and you and I are going to get to know each other pretty well over the next six months. You can make it good on yourself -- or hard on yourself."
Detective Curtis Coburn was sitting at his desk inside the Plano Police Department, doing the usually fruitless but necessary work of reading through mail, when he came across a letter. It was anonymous -- always a good sign.
It was 2001. Coburn, by then, had policed the suburb for more than 25 years, so he recognized many of the names sprinkled throughout the letter. He read on, intrigued by mention of bookies and bettors across the country, the Internet and phone banks based on the tropical island of Curacao. It was so specific, Coburn knew there was something to it, even if it wasn't as grand as described. Along with fellow detective Grant Harp, he started plotting to get inside the operation.
Their plans came to a halt with 9/11, as Coburn hit the streets chasing terrorism-related leads. But a year later, Coburn and Harp were back on the case. Working contacts from previous investigations, Coburn hooked up with a bookie out of Bonham named "Bull" and began placing some bets -- a few bucks here on football, a few there on baseball. He also kept tabs on his new bookie, hoping his world would intersect with the one described in the letter.
It never did, but a few months later, Bull was stopped in Plano and arrested on gun and drug charges. With Bull in jail, his bettors had lost their betting connection. That gave Coburn an idea. Figuring most Dallas-area bookies know each other, Coburn used Bull's temporary hiatus to make a connection with Gregg Merkow, a bookie he had a hunch was involved in the operation described in the letter. Merkow owned the Hurricane Grill on Greenville Avenue and Greenville Bar & Grill.
Coburn was no stranger to undercover work. He'd bought stolen goods in the burglary unit, assisted with intelligence in prostitution and massage parlor stings, and once pretended to be a hit man collecting $20,000 to kill a man. Early in his career, while undercover in the narcotics division, Coburn had learned not to "act a part." The key, he discovered, was to be yourself. Either the bad guys trust you or they don't.
One afternoon, Coburn and Harp showed up at the Hurricane and grabbed a seat. The place had a lively atmosphere with a Cajun menu, and its signature drink was the aptly-named "Category 5" -- a 45-ounce hurricane drink on the rocks or frozen. Merkow, an entrepreneur and professional poker player with more than $1.6 million in lifetime winnings, was nearby writing paychecks as the two officers surveyed the scene. Soon the three of them were talking sports and gambling.
"You a player?" Merkow asked the detective.
"I go to Vegas pretty often," Coburn told him.
"Do y'all have anybody local?" Merkow asked.
Coburn told him about his bookie, Bull, noting vaguely that the relationship had soured. He was looking for someone new for his action, Coburn said.
"Are you a cop?" Merkow asked.
It was a welcome inquiry. People think if they ask it and the undercover officer says no, the officer can't arrest them later. Coburn's pretty sure some undercover cops started that rumor years ago. Either way, it's not true.
"No, I'm not a cop," he said.
"Well, I'll hook you up," Merkow said. "You'll be dealing with my father, Leo."
As the meeting continued, Merkow worked some basic information from his new "client" and assigned him a log-in to a wagering website. He gave him a line of credit for the site but told him he would settle up in cash with Leo.
Coburn went back to the office, logged in and started placing bets. In the days and weeks that followed, he spent more and more time at the Hurricane, working himself into the group, making connections and making bets, all under the watchful eye of federal agents. They saw Leo, who was there almost every day, collecting envelopes of cash from bettors. If he wasn't around, they knew to give the envelope to the bartender, who stashed them in the cash register for safekeeping.
Though he possessed a degree from SMU, investigators believe Al Reed chose to spend most of his adult life doing what they believe his father did: bookmaking. And it fit him: Reed, a husband and father of three, was a man who seemed to cherish hanging out at country clubs and watching sports.
Like most bookies, his business was, through the 1980s and much of the 1990s, built on paper and handshakes. But in the late 1990s, poker, casino gambling and sports betting sites had begun popping up on the Internet, virtual competitors to Las Vegas action stashed on Caribbean islands to keep the feds at a distance. Reed, intelligent and good with numbers, saw a chance to take his metroplex bookmaking operation to a bigger level, so he contacted a few fellow bookies to partner up and devise a plan.
One of the men Reed contacted was Houston businessman Dean Maddox. Through his company, the Maddox Interests, Maddox had years of experience in investments and banking, and he knew just where they should operate: the tropical paradise of Curacao, located in the southern Caribbean off the coast of Venezuela. It was one of the first jurisdictions in the world to license online gaming in 1993, and by 2001 online gambling was an important industry on the island. Maddox set off to their fledgling business' new HQ and incorporated their new company, giving it a strategically vague name: Global International Corporation. They set up a phone bank and servers, secured URLs like HotandCold.net and FunPlay.com, and opened an account with a Panama bank to help funnel money to the island. They even had a lawyer, who, as they tell it, assured them what they were doing was legal. By 2002 they were up and running.
Back home, gamblers long accustomed to laying points over the phone were given log-ins, passwords and credit limits. The setup made for easy betting for players and easy record-keeping for agents. But there was one major difference between Global and other Caribbean-based betting sites: Global's bookies still paid and collected in cash, usually face-to-face.
Business boomed, and Reed grew it like a multi-level marketing scheme, with the owners finding agents underneath them to accept wagers. Those agents would find sub-agents, who would find more sub-agents to find even more bettors, passing all the way up through the pyramid to the owners, each agent and sub-agent getting a slice along the way. Soon the phone bank operation was receiving an average of 20,000 calls per month, even higher during football season and March Madness. As the cash started to stack up, they wired what they could through Panama to Curacao, structuring their deposits to avoid alerting the feds. When a trip was in order, they packed suitcases full of cash to help cover expenses -- $9,000 each so they didn't have to declare the money.
On the island they were met by Curtis Wayne Higgins, a 45-year-old bookie from Prosper familiar with the online-gambling world. Higgins was managing a Dallas-area restaurant, but Reed moved him to Curacao to run the offices there. He eventually moved back and slid into a role as betting agent, but Global's presence there kept growing. By 2006 it had as many as 40 people working at the Curacao office during the off-season, and twice that during the football season. Back home, agents were pulling in six figures and even seven, working a couple half-days a week making payouts on golf courses, restaurants and bars.
Among those lured into the business: Larry Coralli and his son Brent. The elder Coralli, 79, was no stranger to bookmaking or organized crime. In his 2002 autobiography, The Vulture's Wisdom: The Larry Coralli Story, he described a life of living among mobsters, making his living as a pool hustler, dealing cards for the mob and interstate bookmaking. He was known as a top-notch "card mechanic" -- someone who could manipulate a deck without anyone knowing -- and was employed by the mob to do this subtle magic. His son, Brent Coralli, appeared to have chosen a straighter path: He owned a sports apparel company in Richardson and was the CEO of the Dallas Sting girls soccer club, one of the biggest and best-known youth clubs in the country. Both became agents for Global.
The easy money made for large lifestyles for those involved -- big houses, nice cars and more money than they knew what to do with. Reed made $3 to $4 million a year, the feds eventually calculated, and spent $2 million of it on a three-story condo in the exclusive Centrium Tower in the Turtle Creek area of Dallas, with neighbors like Stephen Jones and the late Kidd Craddick. The 5,100-square-foot condo spanned the entire top floor, and he spent another $1 million to finish out the home -- complete with interior waterfall, Italian marble and a large balcony with one of the best views in the metroplex of the Dallas skyline.
The Global crew was at the top of their game: Their online and phone system structure was flawless, their hierarchy of agents was stable and the number of bettors ready to plunk down wagers seemed endless. While there were some headaches involved with moving money each month to Curacao for business expenses, the effort was worth it. Huge sums of cash kept flowing into the owners' pockets. By early 2011, when the Super Bowl arrived at Jerry Jones' new Cowboys Stadium in Arlington, Global International processed more than $1 billion in wagers -- about a third of the amount bet on sports legally in Nevada that entire year. While other underground bookies were using the Internet to manage and expand their operations, investigators believed Global, with its thousands of bookies across the country, was one of the largest and most profitable, and that Super Bowl didn't hurt: When the Green Bay Packers finished off the Pittsburgh Steelers at Cowboys Stadium, Global's profits for football season alone hit $50 million.
On a warm summer day in 2010, Merkow, the bar-owning bookie, went to a Plano deli to meet with a potential recruit. There was a fellow bookie in town from Baltimore, and Merkow was trying to lure him under the Global umbrella. The bookie planned on eventually moving to the Dallas area, but he wanted to keep his clients back in Baltimore happy. Merkow laid it on thick.
"Hey, why don't you come in?" Merkow told the possible new business partner. "You can make all kinds of money once you put it on the Internet. We'll split the profits 50-50, or we can do it 25-75, whatever you feel comfortable with." The bookie agreed to start using Global to place some layoff wagers -- hedge bets made by a bookie with too much action on one side.
The trap was set. Coburn, the Plano detective, had successfully infiltrated Merkow's world, using his be-yourself mantra to build trust. A former contractor, he took a side job doing work on Merkow's home. A rabid St. Louis Cardinals fan, he excitedly placed a $1,000 bet on the St. Louis Cardinals to win the World Series -- a 50-to-1 shot that would have paid $50,000 when the Cardinals beat the Texas Rangers in the World Series, if only he could have collected. So when Coburn vouched for the new Baltimore bookie, Merkow bought in. He never suspected that the bookie was actually an IRS agent from Washington, D.C.
In the months that followed, the undercover IRS agent gained increasingly more access to the Global enterprise. He set up an account so his "bettors" could "place bets from Baltimore," which in fact were wagers laid by federal officers from the U.S. Attorney's Office in Plano. Global shipped cash via FedEx to a Baltimore address belonging to the feds, and the alleged bookie from Baltimore kept flying in to discuss "business" with Global bookies -- all recorded by the feds.
They made another discovery, too. Once investigators could place bets, it became easy to determine that the Global computer system in Curacao ran through a server in Miami before being routed to other parts of the country. So Parsons got a wiretap of the main computer server in Miami. As wagers were placed in real time, the feds could watch users with names like "fat-cat" log in and place bets -- and view their entire betting cycle. They could do the same with their own bets, and track it from start to finish -- right down to Coburn or others getting paid in cash. The system led them right to hundreds of bookies, complete with records of bets and transactions.
Finally, on the morning of March 20, 2011, the investigators made their move, raiding the bookmakers' homes and offices throughout the metroplex. They took evidence -- cell phones, computers, records -- and large amounts of cash, numerous gold and collectible coins, sports memorabilia, expensive cars, Rolex watches, expensive jewelry and more. At Reed's home, Parsons found a satchel containing paperwork that lays out some of the inner workings of the enterprise -- betting sheets, bookie lists, passwords and a book of Dallas Stars season tickets. Elsewhere in Reed's house, investigators rummaged through a large safe, where they found more than $100,000 in cash and $40,000 in cashier's checks. They also found signed blank checks from agents and bettors worth several hundreds of thousands of dollars.
A few months later, Merkow came in for questioning. As U.S. Assistant Attorney Andrew Stover asked him about the sports betting enterprise, Merkow sat quietly, refusing to talk. Stover continued laying out the government's case: the recordings, the undercover bettors, the wiretapped websites, the seized documents, seized assets, financial records. Even others within the organization had turned and offered testimony to the Feds. Merkow sat stone-faced. Then a door opened, and in walked someone else with a few questions.
"Oh man, this guy's a cop?" Merkow said, looking up at the face of Detective Curtis Coburn. "He's been making bets with me for years."
After the raids, investigators went to work, scouring through bank records, financial transactions and other paper trails that would help make the conspiracy real for jurors -- assuming they ever met a jury. They found bank accounts in Panama, but when they went to seize the assets the accounts had already been emptied. They found a safe-deposit box business in South Dallas that advertised its services to "hide money from your wife or other people," used by several bookies involved, all under fake names. They raided it and seized more than $2 million.
They uncovered more sophisticated money-laundering schemes, too. They found investments that Maddox and Reed had put together for the company's brass, ranging from small casinos in Las Vegas to day care centers to several railroad pressure tank cars, and they seized several condos at the MGM Grand Signature bought for the same purposes. Meanwhile, Parsons identified bank-wire transfers tagged as "real estate investing" and "consulting," sent to the accounts of bettors, agents and to Curacao, violating bank secrecy laws.
One by one they cut deals with prosecutors, most pleading guilty and receiving three or four months. In total, 18 bookies, including Reed, pleaded to gambling and tax-related charges. Despite his deep involvement in the operation, Maddox was allowed to just plead guilty to failure to file a tax return. Global co-owner Curtis Higgins forfeited almost $30,000 as well as numerous high-priced pieces of sports memorabilia. Co-owner David Mullins forfeited cash and investments totaling more than $73,000.
Dallas resident Carl Francis, 72, better typified the money that could be made in the group. A "country club man" who ran a huge book like a business, investigators seized $1 million in cash from his home, and he eventually forfeited more than $2 million in all after pleading guilty to running an illegal gambling business. Hurricane Bar owner Gregg Merkow forfeited almost $300,000, but not before both his bars mysteriously burned down. Merkow's dad, Leo, died shortly after the warrants were served in 2011.
Reed cut a deal, too, agreeing to serve a year in prison -- the only one in the group to get anything resembling significant prison time. But his real punishment came in the form of forfeitures: $2.5 million in cash and investments. Investigators allowed Reed to keep his Southlake home, but they seized his Turtle Creek condo and an Austin home, which had been signed over to him by a bettor as payment.
Reed has served his time in prison and now works in real estate. He refused to comment. Like Reed, most involved are trying to move on. Brent Coralli continues to work as CEO of the Dallas Sting soccer club and runs his sports apparel company. Curtis Higgins has moved to Crested Butte, Colorado, where he recently purchased a high-end steakhouse restaurant and says business is going well.
Merkow is back at the poker felt trying to make a living. He travels the tournament scene some, playing events in Oklahoma and Mississippi -- relying on his own skills. One day Merkow hopes to reopen the Hurricane, ground zero of Global International's downfall. Seeking out employment from others is difficult and not something he craves. Merkow and others involved worry what those in their communities, friends and acquaintances think of them after felony convictions. "It's limited me for sure," he says.
That doesn't surprise Coburn.
"Bookmaking is all most of them know," he says. "Most of them wouldn't know how to do anything else. I'm not accusing them of anything, but I don't know how well any of them will make a living doing something else because they have nothing else. They don't know anything else. It's hard for a lot of these guys to get away from the money. You can make a lot of money bookmaking."
In the end, the government's take from forfeitures reached more than $10 million, to be divided among the law enforcement agencies, including gold and rare coins, sports memorabilia, jewelry, two Mercedes Benzes and much more. And, of course, plenty of cash.
Some of that cash belonged to Dallas resident Robert Hodges. At 72, he was an old-school bookie who started by taking bets over the phone and bought into Global by purchasing another owner's "book" for more than $2 million, paid in quarterly $160,000 payments -- cash dropped off in an envelope.
On the day of his court hearing, Stover, the prosecutor, waited outside the courtroom for Hodges to show up. As part of his forfeiture agreement, he was supposed turn over $1.2 million to the government. The routine, by then, was standard: The bookie brings a cashier's check and proceedings get underway. As Hodges entered court, though, he carried a bag over his shoulder. He handed the bag to the security officer and made his way through. The officer began feeling the bag and noticed an unusual lumpiness in Hodges' knapsack. "What's in the bag?" the officer asked.
"My forfeiture settlement," Hodges told him.
The officer opened the bag for inspection and found Hodges' payment -- all in cash.
Stover secured a table and carefully counted the money, stacks of hundred dollar bills covering the table. Eventually, he finished counting and told the court, "It's all there."
Sean Chaffin is a freelance writer based in Crandall. His newest book is Raising the Stakes: True Tales of Gambling, Wagering & Poker Faces.
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