A Denver man, Jonathan Arvay, aged 38, has been found guilty by a federal jury on charges related to operating an illegal gambling business disguised as an arcade. The U.S. Attorney's Office for the District of Colorado announced yesterday that Arvay ran Player One Arcade, which was part of a network spanning from Greeley to Pueblo. The arcade featured electronic gambling machines designed to look like arcade games and also housed virtual slot machines where patrons could earn credits according to the U.S. Department of Justice.
These credits could then be exchanged for a bespoke cryptocurrency, Obsidian Digital Asset Coin (ODAC), which, according to trial evidence, was repurposed solely for cash conversion at an adjacent cryptocurrency teller machine. Acting U.S. Attorney Matt Kirsch described the gambling dens as having a veneer of legitimacy, causing real harm in our communities. Found running a large, complex illegal operation both online and in person in many Colorado cities including Pueblo and Lakewood, the defendants' actions led to ancillary crimes such as money laundering and fraud against the U.S. government.
The case against Arvay and his associates was a collaborative effort, as acknowledged by FBI Denver Special Agent in Charge Mark Michalek. "Our strong partnerships with Internal Revenue Service - Criminal Investigation, as well as numerous state and local agencies, allowed us to successfully dismantle the gambling dens that were negatively impacting surrounding communities," Michalek stated, as per the U.S. Department of Justice. The investigation also revealed that the operation's illicit proceeds fueled additional violations.
Acting Special Agent in Charge of the IRS Criminal Investigation Denver Field Office, Tom Demeo, highlighted the challenge of tracking illicit funds as fraudsters devise new methods of evading taxes and defrauding the government. The United States District Judge Gordon P. Gallagher presided over Arvay's trial, with sentencing set for December 12th.
The FBI Denver Field Division, the IRS Criminal Investigation Denver Field Office, and the Pueblo Police Department investigated with Assistant United States Attorneys Cyrus Y. Chung, Alison Connaughty, and Jena Neuscheler handling the prosecution.
