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IN the SUPREME COURT of OHIO Nancy Margaret Russo, Judge

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IN the SUPREME COURT of OHIO Nancy Margaret Russo, Judge IN THE SUPREME COURT OF OHIO State of Ohio, ex rel. William D. Mason, Cuyahoga County Prosecuting Attorney The Justice Center, Courts Tower 1200 Ontario St., Ninth Floor Case No. Cleveland, Ohio 44113, Relator, vs. Nancy Margaret Russo, Judge, Cuyahoga County Court of Common Pleas The Justice Center, Courts Tower 1200 Ontario St., Courtroom 18C Cleveland, Ohio 44113, Respondent. PETITION AND COMPLAINT FOR WRIT OF PROHIBITION AND APPLICATION FOR IMMEDIATE ALTERNATIVE WRIT INTRODUCTION AND JURISDICTION i This is an originai action for a writ of prohi'pition, seeking to prevent the Honorable Judge Nancy Margaret Russo from enforcing orders that she issued on June 13, 2012, June 18, 2012, June 22, 2012, and June 25, 2012, which purport to grant a Temporary Restraining Order ("TRO") against Relator restraining him from criminal enforcement of Ohio's Gambling Laws against internet sweepstakes operations in Cuyahoga County. Relator contends that Respondent patently and unambiguously lacks jurisdiction and/or exceeds her jurisdiction by: (1) conducting judicial proceedings and prematurely determining, in a civil action, whether factually disputed conduct violates Ohio law, and (2) by granting a TRO and authorizing discovery in a civil case that unconstitutionally interferes with Relator's prosecutorial discretion to bring criminal charges. Respondent has abused her equitable power by interfering with an ongoing criminal case and interfering with Relator's executive discretion to pursue criminal charges. Relator therefore seeks an alternative writ that immediately stays all proceedings before Respondent related to her decision to grant a TRO in this matter. 2. This Honorable Court has jurisdiction of the action under Article IV, Section 2(B)(1), of the Ohio Constitution. PARTIES 3. Relator Mason is the duly elected Prosecuting Attorney for Cuyahoga County, Ohio. The Prosecuting Attorney is an official within the executive branch of state government. State v. Hall, 2nd Dist. No. 99-CA-94, 2000 WL 125947; Gosney v. Board of Elections, 7th Dist. No. 88-C-54, 1989 WL 30866; see also State v. Sterling, 113 Ohio St.3d 255, 2007-Ohio-1790, 864 N.E.2d 630, at ¶¶ 35, 41 (striking R.C. 2953.82(D) as unconstitutional because it delegated judicial authority to the prosecuting attorney, a member of the executive branch). Relator's duties include "inauirLv] into the commission of crimes within the county" of Cuyahoga. R.C. 309.08. 2 4. Respondent Russo is a duly elected Judge of the Court of Common Pleas for Cuyahoga County, Ohio, whose independent office falls within the judicial branch of state government. Hall, supra. FACTS The Criminal Case 5. On May 30th, 2012, a Cuyahoga County Grand Jury indicted 10 individuals and 7 companies in a 70-count indictment for operating, or working in close cooperation with, the owners of an intricate internet gambling system known as "VS2." The VS2 software is controlled by individuals at the New Jersey headquarters of VS2 Worldwide Communications, LLC. All of the parties were indicted for Engaging in a Pattern of Corrupt Activity, Gambling, and Money Laundering for their respective roles in providing, maintaining, and perpetuating an internet gambling system that they have tried to conceal by renaming/describing their activities as operating "internet sweepstakes." 6. Internet Sweepstakes cafes are retail establishments often located in shopping centers or strip malls, which operate computerized gambling devices. For a price (usually $20.00) a customer is provided with gambling "credits" and permitted to sign onto a computer terminal which is programmed to simulate a video slot machine. In order to create the illusion that such activity is not gambling, retail vendors purport to sell customers "Internet time" or "long- distance pre-paid phone cards," and the money used to purchase such items is loaded into the video game as gambling credits or tokens. Depending upon the 3 customer's luck at playing the video slot machines, he can win more credits or tokens which can be redeemed for cash or more gambling time. 7. The indictment, which is pending in Cuyahoga County Court of Common Pleas Case No. CR 563092, was premised upon the following allegations: The Ohio Investigative Unit of the Ohio Department of Public Safety, working closely with the, United States Secret Service, identified the principal operators and bank account holders of the VS2 gaming system as Phillip Cornick, Edward Kaba, and Richard Upchurch. Over the last 4 years these individuals have perpetuated the spread of their VS2 gaming system into Ohio with the assistance of Ohio-based mid-level distributors and marketers of the system, George Georgekopoulos, Pete Georgekopoulos, Christos Karasarides, and Christopher Maggiore, who have persuaded many small business owners in Cuyahoga County that VS2 internet cafe gaming system operates as "sweepstakes" (which are not illegal and were only recently regulated in Ohio), rather than gambling (which is expressly illegal). In addition, the distributors and marketers of VS2 gaming system have enlisted_the assistance of local opportunists who recognized the popularity of the VS2 gaming system and sought out contacts with the company to allow them to bring it into the local businesses they work with. Martin and Neil Sarcyk, owners of Union Vending, which already had a significant number of Cuyahoga County's bars and restaurants as existing 4 customers for their vending machines, jukeboxes, and arcade games, acquired many VS2 gaming system terminals from VS2 Worldwide Communications, LLC and VS2's partner company, P & E Technologies, Inc. (which both happen to be located in the same little building in New Jersey and run by the same two individuals, Phillip Cornick and Edward Kaba). The Sarcyks, through their business, Union Vending, convinced businesses in Parma Heights, such as "Good Time Charlies II" and "Mr. B'S" to add the VS2 gaming system terminals to their spaces in their bars and restaurants. c. VS2's expansion practices show that it is determined to control the internet cafe business wherever it goes. When the owner of "Good Times Charlies II" rejected Christos Karasarides suggestions that she get rid of her restaurant/bar altogether and dramatically expand her number of VS2 gaming terminals, another local opportunist, James Watson, who knew the mid-level distributors and marketers, opened the "Sweepnet" internet cafe just a few business storefronts away. d. The Money Trail: i. With records acquired by the Cuyahoga County Prosecutor's Office, the Ohio Investigative Unit and the United States Secret Service identified numerous company and individual bank accounts being used to "launder" the vast amounts of cash being generated by the VS2 network. The revenue is funneled to New Jersey to VS2 Worldwide Communications, LLC in the form of checks and money orders from the individual cafe owners, such as James Watson, and vendors such as Union Vending, which only collects cash from its local collaborators, but only sends checks. ii. The money is then distributed from the VS2 Worldwide Communications LLC's company account to various individual accounts owned by Phillip Cornick, Edward Kaba, Richard Upchurch, as well as to Elite Entertainment DBA VS2 Marketing Group, an account controlled by Christos Karasarides, Jr., George Georgekopoulos and Pete Georgekopoulos, located in Ohio. iii. From Elite's account, the marketers/distibutors then pay themselves from their individuals accounts, except, Christos Karasarides, who has his share from Elite's account sent into two other accounts, CKare Corp and CMKare LLC. The first is controlled exclusively by Christos Karasarides, Jr. and the second is controlled by Karasarides and Christopher Maggiore, who also has a partnership with Karasarides that owns and operates several internet cafes in Summit and Stark Counties, VS2 Cafe LLC. iv. The end result is a complicated and elaborate, layered, web of related companies dispersing and distributing money to each other. Money that started out as cash proceeds travels into companies and then becomes what appears to be salaries or wages, even though these 6 companies really only exist to process or legitimize the vast sums of money flowing to these individuals. The Letter 8. The predominant modus operandi of retail internet sweepstakes cafes is to claim that they operate legitimate, non-gambling businesses, and that the sweepstakes - they operate are merely promotional events to increase participation in their legitimate businesses. Such operators claim to operate businesses in competition with other legitimate retailers such as Kinko's (as to internet access) or Sprint or Verizon (as to long distance phone cards). ^. On May 30, 2012, the same day that the aforementioned criminal indictments were returned, Relator sent a letter to numerous retail business establishments in Cuyahoga County (hereinafter "Internet Sweepstakes Cafes") warning them that they could be subject to criminal prosecution if they did not cease illegal gambling activities. The letter read as follows: The Cuyahoga County Prosecutor's Office has identified your establishment as havina an Internet Sweenstakac PaminQ avetAm operating on its premises. Please be advised that "Internet Sweepstakes Cafes" are gambling establishments. Ohio Revised Code Section 2915.02(A)(2) prohibits conducting "sweepstakes" games just as it does any other form of poker or slot machines not specifically exempted in the Revised Code. Gambling ic illegal in ^,lhin and the O::iC
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