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Despite Mr. Paterson’s efforts to avoid being caught at his
illegal activities, agents of the Minnesota Gambling Enforcement
Division searched Mr. Paterson’s home and his son’s apartment on
December 12, 1999. The agents arrested Mr. Paterson and seized
gambling records covering 4 days of betting and three cellular
phones. The gambling records seized indicate that Mr. Paterson
accepted an average of $96,070.50 of bets each day for those 4
days, a vastly larger amount than the gross wagers Mr. Paterson
reported on the Forms 730. In fact, the total gross wagers
accepted over those 4 days exceeded the total wagers Mr. Paterson
reported he accepted for the entire year 1997 or the entire year
1998. Moreover, the seized records did not include a Saturday,
which is generally a high-volume day, and included one partial
day of wagering because the search commenced before the day’s
wagering was complete.
Mrs. Paterson’s Activities
Mrs. Paterson was aware of her husband’s illegal gambling
activities. She has worked as a flight attendant for Northwest
Airlines (NWA) for approximately 25 years, but she worked only
limited hours during the years at issue. In fact, NWA reported
it paid her only $3,105 in 1997 and $16 in 1998.
Mrs. Paterson helped her husband hide his bookmaking
activities although she did not accept bets herself. She
obtained the cellular phones in her name that were seized in the
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