Wichita men plead guilty to federal gambling, tax charges

WICHITA, Kan. (KSNW) – Two Wichita men have pleaded guilty to federal gambling and income tax charges.

According to U.S. Attorney Tom Beall, 67-year-old Danny Chapman and 46-year-old Daven Flax pleaded guilty in federal court today.

Chapman pleaded guilty to one count of operating an illegal gambling business and, one count of tax evasion.

Flax pleaded guilty to two counts of operating an illegal gambling business, and one count of making a false statement on a tax return.

In the plea, Chapman admitted he worked as a bookie for sports betting and, Flax admitted running illegal poker games at numerous locations in Wichita. Read more in the pleas below.

From 2013 until last year, the federal indictment shows Danny Chapman was making more than $2,000 a day from bookmaking.

Five pages of documents show that a long list of items were seized from Chapman by the feds. Several vehicles, including nine cars and one motorcycle were all taken by the feds. Jewelry, including watches, gold chains, diamond rings and earrings, and even some collectible coins were also seized.

According to the documents, feds also seized more than $1.6 million worth of funds from Chapman, including hundreds of thousands of dollars in safe deposit boxes.

The documents also outline that Chapman failed to pay $345,000 in federal taxes from the earnings he made from illegal gambling.

As for Flax, the documents detail that he was an employee of Chapman’s, working as a sub-bookie for his betting operation.

Flax also failed to pay $65,000 in federal income taxes on earnings from illegal gambling.

Both men will be sentenced at a later date.

Chapman: Online sports betting

In his plea, Chapman admitted he worked as a sports bookmaker in the Wichita area and had at least five people working for him. Chapman and his subordinates took bets on sporting events from clients in their “book” of bettors and collected their losses. They arranged for clients to place bets through online gambling web sites that were created and hosted in Costa Rica. Chapman and subordinates kept a portion of the money they collected. His gross revenue from bookmaking exceeded $2,000 in a single day.

Chapman failed to pay almost $345,000 in federal income taxes on his earnings from illegal gambling. In order to evade taxes, he purchased vehicles in cash and registered them in the name of other persons, including a colleague and a nephew. He frequently purchased money orders and cashier’s checks using the names of family members.

Flax: Poker games in Wichita, sports betting

In his plea, Flax admitted he operated an illegal gambling business in Wichita. He conducted and managed illegal poker games at numerous locations in Wichita. His income came from taking a cut or “rake” from the amount of money wagered. He was responsible for paying employees including dealers, waitresses and caterers as well as paying for the use of commercial properties where poker games were held. The games were not open to the public. Only gamblers who were invited could play.

In addition, Flax worked as a sub-bookie for Chapman’s sports betting operation.

Flax failed to pay more than $65,000 in federal income taxes on his earnings from illegal gambling.

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