GILROY—The owner of the Gilroy Bizzness Center, which was closed down by police one week after opening its doors, has pleaded no contest in court to charges of illegal gambling nearly two years after the store was permanently shuttered.
Ron Doyle pleaded no contest in two cases on July 29—one concerning a Gilroy business and another in Milpitas that was also raided by authorities, according to prosecutors with the Santa Clara County District Attorney’s Office. A sentencing hearing for Doyle is scheduled for Sept. 4.
Prosecutors expect a similar plea in another Gilroy-based illegal gambling case later this month, in an effort to close illegal gambling operations that masquerade as legal internet cafes.
Supervising District Attorney Steve Lowney told the Dispatch he anticipates the owners of Liberty PCS, a business in Gilroy that was twice shut down on similar allegations in 2013, will plead no contest in court Aug. 26.
“They’re going to have to forfeit all the property that was seized, including all the equipment and all of the cash (to the city),” Lowney said. “We’re talking hundreds of thousands of dollars in the time they were open, for sure.”
“We’re pleased we’re not going to have these establishments that once were a magnet for criminal activities,” Gilroy Police Department Acting Capt. Joseph Deras told the Dispatch on Monday. “We want to discourage other businesses from establishing similar businesses in our city.”
The Gilroy Bizzness Center was located at 7598 Monterey St. when a caravan of police vehicles swarmed the storefront Oct. 18, 2013 and executed a search warrant. Thirty computers, which police said were used for gambling, were seized as evidence from the premises. Since then, the store has sat empty and boarded up.
Gilroy police twice raided the Liberty PCS store at 1325 First Street in August 2013, seizing 41 computers..
Liberty PCS filed a lawsuit against the city of Gilroy in San Jose Superior Court, seeking $380,000 in loss and damages. The company argued that the raids caused income losses of $15,000 per day for the two weeks they were closed. Its main request, according to the 12-page complaint, was for a judge to declare Liberty PCS a legal business within Gilroy.
Attorneys representing Liberty PCS dropped their lawsuit against the city of Gilroy in October 2014, along with other lawsuits in the cities of Watsonville and Santa Rosa where raids also occurred, according to court records.
Owners of similar businesses statewide are now admitting in court that they broke state gambling laws, following the California Supreme Court’s unanimous ruling in recent weeks that sweepstakes gambling operations are illegal.
Just last week, California Attorney General Kamala Harris proclaimed victory in a multi-million dollar San Francisco case against a company that manufactured software used in computers like those seized in the Garlic City raids.
“My office is dedicated to combating and dismantling illegal and unregulated gambling operations statewide,” Harris said in a July 31 statement, adding that San Francisco-based Capital Sweepstakes Systems, Inc. will pay more than $2 million in penalties and admit violating state law under the terms of a recent settlement.
The California Supreme Court ruling confirmed an appellate court decision that “specifically outlawed these exact types of games,” Lowney said.
“There was no difference between what was going on in the appellate court decision and the types of games being played at Liberty PCS and other internet cafes. It’s explicit; there’s no room,” he added.
Storefronts like Gilroy Bizzness Center and Liberty PCS, which police say offered customers computer games with a chance at earning a cash payout, have the potential to earn as much as $10,000 per day. But there’s no regulatory agency that oversees their operation, and there’s no way to monitor how much income they’re generating, Deras from Gilroy police said.
Lowney estimated Liberty PCS’ Gilroy store pulled in $20,000 to $30,000 a week—all unregulated and illegal income, he said.
Both Gilroy stores obtained business licenses from the city for internet cafes, where customers pay to use computers to access the internet or a host of other business-oriented services like copying and faxing documents. Deras said Gilroy police shut down the storefronts down they realized the licenses and the actual businesses didn’t coincide.
“We’re not going to permit these in our community,” he said. “We’re not in a position to welcome them.”
• Aug. 1, 2013: Liberty PCS, at 1325 First St., raided by GPD
• Aug. 22, 2013: Liberty PCS raided a second time by GPD. Owner, Ron Doyle, files lawsuit against city of Gilroy
• Oct. 18, 2013: Gilroy Bizzness Center raided by GPD one week after opening at 7598 Monterey St.
• July 29, 2015: Doyle pleads no contest to illegal gambling charges
• Aug. 26, 2015: GBC’s owners expected to also plead no contest
