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Gambler Says Health Risks Warrant No Jail For $9.6M Scam

By Reenat Sinay · October 14, 2020, 5:38 PM EDT

A high-stakes gambler who copped to scamming an investor out of $9.6 million asked an Illinois federal judge on Tuesday for a year of home confinement, arguing that a prison sentence would derail his treatment for gambling addiction and put him at risk of contracting COVID-19.

Robert Gorodetsky, 28, pled guilty in February to one count of wire fraud and one count of filing a false tax return, admitting he bilked an unnamed investor by falsely claiming he would use the funds to make stock trades and bets on sporting events.

In a court filing Tuesday, Gorodetsky urged the court to sentence him to probation, with the first year to be served in home confinement.

Expressing shame and remorse for his actions, Gorodetsky described his undiagnosed behavioral disorders and mental illness that he says fed his gambling and trading addictions from adolescence. Gorodetsky said that he has been receiving treatment for his addictions since the weeks prior to his guilty plea.

"A sentence of incarceration will disrupt the intensive outpatient and therapy treatment Rob is currently pursuing," Gorodetsky's lawyers said. "Rob is not at risk to recidivate. Rob's post-indictment rehabilitative steps, including intensive treatment, Gamblers Anonymous meetings and therapy demonstrate his desire and ability to make permanent changes in his life."

Prosecutors have not yet made a sentencing recommendation. According to the early February plea agreement, the government estimated a guidelines range of between 57 and 77 months in prison, or nearly 5 years and more than 6 years.

Gorodetsky also raised concerns on Tuesday about the coronavirus pandemic, which he said has turned prisons into "hotbeds" for COVID-19 outbreaks since his plea agreement.

Gorodetsky is set to be sentenced on Oct. 28. He also will be ordered to pay over $7 million in restitution to his investor victim, court records show.

The government's January criminal information describes a scheme in which Gorodetsky told an investor that he'd pool the individual's money with his own substantial funds to make investments in the stock market and bets on sporting events, with the pair sharing the profits.

Gorodetsky initially lured the investor into his scheme by claiming he was a successful day-trader, prosecutors said during his plea hearing.

Gorodetsky first took $953,000 from the investor and converted more than $700,000 of it for personal use, all the while falsely representing that the investment had ballooned to $2 million after favorable stock trades, according to the government. The actual value of that investment was only $71,000, prosecutors said.

Between July 2014 and November 2017, prosecutors claim Gorodetsky convinced the investor more funds were needed and that more money could be made through sports betting, taking $8.7 million more. He also allegedly sent the investor false accounting statements and balances and opened multiple bank accounts to receive the money, according to the charging documents.

The false tax return Gorodetsky filed purported to cover the 2016 calendar year, during which he claimed he made only $10,520, prosecutors contend. But Gorodetsky knew when he filed that return that he'd failed to include at least $2.5 million in funds he received that year from the investor, according to the government.

Counsel for Gorodetsky and representatives for the government did not immediately respond Wednesday to requests for comment.

Gorodetsky is represented by Chris C. Gair and Carly Chocron of Gair Eberhard Nelson Dedinas Ltd.

The government is represented by Patrick King Jr. of the U.S. Attorney's Office for the Northern District of Illinois.

The case is U.S. v. Gorodetsky, case number 1:20-cr-00040, in the U.S. District Court for the Northern District of Illinois.

--Additional reporting by Lauraann Wood. Editing by Michael Watanabe.

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