COLUMBIA, S.C. (AP) – A man who insisted for years that his phone card business was legal gave up his fight against South Carolina on Tuesday and pleaded guilty to tax evasion and running an illegal gambling operation.
Throughout the long fight in federal court, Larry Flynn maintained that his Magic Minutes video terminals were legal under state law. The machines allowed buyers to purchase a phone card, then click through to another screen to see if they won a prize, usually cash. Flynn compared them to a sweepstakes where whether someone won or not was predetermined.
Federal prosecutors said Flynn’s machines really were closer to games of chance, giving buyers an opportunity to win money through blackjack, poker, Keno and other illegal gambling games.
Flynn’s operation led to charges against several politicians as well. The plea agreement that he signed in federal court last week requires him to truthfully answer any questions from investigators and testify if needed in court, but does not give specifics on what he might know.
It also didn’t specify a sentence for the 40-year-old businessman. The two counts Flynn pleaded guilty to carry a maximum of 10 years in prison and a $350,000 fine. He will be sentenced later.
Prosecutors said Flynn didn’t file a tax return in 2011 and 2012 in an attempt to hide the finances of the Magic Minutes company.
Flynn used cash to pay his employees as well as on luxury car payments, international travel, plastic surgery, drugs and entertainment, according to his indictment.
South Carolina outlawed video gambling in 2000, but Flynn and other gambling operators spent more than a decade trying to manipulate loopholes in the law. They would ask magistrates to find their machines were not used for gambling. If the local judges agreed, that would tie the issue up in courts for years while the machines could operate.
Flynn’s lawyer. Bert von Herrmann, did not respond to an email seeking comment.
Copyright 2015 The Associated Press.
