ORDER TO UNSEAL REDACTED SEARCH AND SEIZURE WARRANT AFFIDAVIT

DALE A. DROZD, Magistrate Judge.

Upon application of the United States of America and good cause having been shown, IT IS HEREBY ORDERED that the redacted affidavit supporting the search and seizure warrants executed on or about September 17, 2014 in the above captioned proceeding be and are hereby unsealed.

EXHIBIT A

AFFIDAVIT OF LAURA E. GIOUZELIS IN SUPPORT OF SEARCH AND SEIZURE WARRANTS

AFFIDAVIT OF LAURA E. GIOUZELIS IN SUPPORT OF SEARCH AND SEIZURE WARRANTS

I, Laura E. Giouzelis, being duly sworn, depose and state as follows.

I. BACKGROUND AND EXPERTISE OF THE AFFIANT

1. I am a Special Agent of the Federal Bureau of Investigation, and have been so employed since August of 2010. I was trained as an FBI Special Agent at the FBI Academy in Quantico, Virginia. During my time training in Quantico, Virginia, I received specialized training in search and seizure law. I am currently assigned to the Sacramento Division of the FBI, White Collar Squad. In my current assignment I am responsible for investigating Organized Crime in the Eastern District of California. I have performed law enforcement related tasks such as executing state and federal search and arrest warrants, utilizing confidential sources, coordinating undercover operations, and conducting surveillance of subjects.

2. I have personally participated in the investigation of the offenses discussed below. I am familiar with the facts and circumstances of this investigation from: (a) my personal participation in this investigation, (b) reports made to me by other law enforcement authorities, and (c) reports and memoranda of interview I have reviewed; (d) records subpoenaed by a federal grand jury; and (e) other sources of information as stated herein. However, I have not set forth every fact that I know of that is relevant to this investigation. Rather, I have set forth only the facts necessary to establish probable cause for the execution of this warrant.

II. INTRODUCTION

3. I certify that the FBI, in conjunction with the IRS, is conducting an investigation into various criminal offenses by KEVIN FREELS, [REDACTED\] and others, including, but not limited to: 18 U.S.C. § 371 (conspiracy to commit offenses against the United States); 18 U.S.C. § 1955 (operation of an illegal gambling business); [REDACTED\] These offenses are being carried out in the Eastern District of California and elsewhere.

4. As set forth more fully below, our investigation indicates that KEVIN FREELS, [REDACTED\] are involved in the management of a series of businesses that engage in and facilitate illegal gambling in various locations from Sacramento to Florida, hereinafter the Capital Entities.1 These businesses include: [REDACTED\] Capital Sweepstakes Solutions, Inc., [REDACTED\] The Capital Entities provide turn-key systems for owners of internet cafes and other similar storefront locations to operate illegal gambling businesses. The Capital Entities also market their illegal gambling machines to local charitable organizations as a supposedly legal way to increase revenue and provide the same service. The turn-key service can include: the delivery and installation of gaming terminals, the gaming server, the point of sale computer; training on the operation of all systems, maintenance on all systems, and access to the maintenance help telephone line. The Capital Entities do not charge fees for their services but instead earn a percentage of the profit made at each location.

5. As described more fully herein, the gaming terminals provided to local businesses by the Capital Entities are essentially slot machines, where players can use credits to play a simple matching game on a video screen and potentially win additional credits, which can be exchanged for money on site. In the past, the Capital Entities have claimed that their business revolves around legitimate "sweepstakes" offers which are used to promote customers' sale of products including internet time and office supplies. However, the essential elements of gambling, that is, consideration, chance, and reward, remain just as applicable to their products and services, and cannot be obscured by false characterization.

6. Based on a review of financial records, the Capital Entities gross receipts from 2007 to 2014 exceed $17 million.

III. NATURE OF APPLICATION

7. This application is submitted in support of warrants to search and seize documents and records, as described in Attachments B-1 and B-2, on the following premises as more fully described in Attachments A-1 and A-2, hereto:

8. This application is also being submitted in support of multiple seizure warrants, more fully described below.

IV. POTENTIALLY APPLICABLE STATE LAW

9. An element of a violation under 18 U.S.C. § 1955 is that the gambling business violated the laws of the state(s) in which it was conducted. The relevant statues for California and [REDACTED\] are as follows:

V. PROBABLE CAUSE

A. Background

10. According to loan documents submitted in support of the purchase of SUBJECT PREMISES 1, KEVIN FREELS, [REDACTED\] who work together in joint ventures and work to produce products in the charitable gaming field. Those documents report that [REDACTED\] KEVIN FREELS has the most extensive knowledge about the industry, products, and software. [REDACTED\] FREELS joint ventures enter into contracts with clients who operate locations including SUBJECT PREMISES 2.

[REDACTED\]

12. The full legal and ownership structure of the Capital Entities is currently unknown. However, I have reviewed a variety of business records and determined that the main businesses are as follows.

[REDACTED\] [REDACTED\]

19. Capital Sweepstakes Systems (CSS) was incorporated in Nevada in February 2013. CSS was registered as a Foreign Corporation with the Office of the Secretary of State for California in February 2013. The corporate address for the principal office in California was listed as 1617 18th Street, Sacramento, California. DON FREELS was listed as the President for CSS. Through subpoena, an account was returned from Wells Fargo Bank for CSS listing [REDACTED\] [REDACTED\] on the signature card. This account was opened in August 2013. This account was reviewed by agents and further described in detail below.

20. Public databases, applications for business licenses in various states, bank records, and a review of the tax returns for the subjects of the investigation reveal that the following companies are also connected to the one or more of the Capital Entities: [REDACTED\]

B. Undercover Operations

21. The following was discovered through observation and actual play by Special Agents with the California Department of Justice (CALDOJ) Bureau of Gambling Control (BGC) and other law enforcement agents, as well as review of video recordings of undercover operations performed by local law enforcement agencies:

22. All the locations and devices that have been observed operated in a similar manner to the manner described below. Each internet café/ gambling parlor described in the remainder of this affidavit operates in this similar manner:

23. Upon entering the internet café, patrons generally observe a scene that is similar to many Las Vegas casinos. There is background noise that is associated with the play of slot machines and numerous individuals seated at a computer kiosk playing what appears to be video slot machines. The following image, recovered through a probation search, depicts one of the café locations described in this affidavit:

24. In order to play a game at a kiosk station, a player must inform a store employee of the desire to play and establish or contribute money to a player's account. The exception to this is if the player already had opened an account at that particular location. This account establishment occurs by handing the store employee an amount of US Currency and, in most cases, providing a form of identification, such as a driver's license. The player is given either a printed out receipt with a unique code or a card and a login. The account and play is established and tracked through a server operated and controlled by the Capital Entities. The player logs into the gaming terminal using the code or login. After logging in, the player spends the provided credits and either wins or loses the game. These games have scrolling sets of columns similar to those seen at slot machines at casinos. Below are some screenshot examples of the Capital Entities games:

25. When the player stops play, the player may go to the cashier to receive money which was won during play or money that was not yet played. The player is only able to receive money from the location from which the account was opened. The location later receives an invoice from the Capital Entities for a previously agreed upon percentage of the net profits (the Capital Entities are able to send these invoices to the locations because the Capital Entities were tracking the play on their servers).

i. (Operation #1) Mr. M's Internet and Cafe

26. CALDOJ BGC was contacted by the Sacramento Sheriff's Department and informed that Mr. M's Internet and Café, located at 7741 Fair Oaks Boulevard, Sacramento, California was providing casino type computer games for their patrons, possibly in violation of California Penal Code Section 330b. According to the Sacramento County License system, the description of work listed on the business application was "copy, print, internet, and snack shop." [REDACTED\]

27. On February 29, 2012 and March 7, 2012, two undercover agents entered the business premises of Mr. M's Internet and Café and saw approximately 23 sweepstakes-type video gambling devices, both times. The agents filled out a form that provided biographical data and questions concerning what type of software training they wanted to receive. The agents purchased cards used as access devices for the video gambling devices and paid the cashier to have money put onto the playing cards. The agents used the playing cards to gain access to the gaming devices. The selection of games played by the undercover agents was games advertised on the Capital Entities websites. The agents played the games and won or lost credits, as shown on the screen. When redeemed at the cashier station, each credit equaled one cent.

28. On March 7, 2012, two undercover agents entered the business premises of Mr. M's Internet and Café and utilized the sweepstakes-type video gambling devices. Patrons inside the establishment told the agents they won $200.00, $250.00, and $400.00 values in the past. The cashier told the agents they would pay a "donation" to buy time for the internet or transfer winning credits to buy time. The cashier explained that the agents could cash out winnings or maintain possession of the paper receipt and return to the establishment to play the balance. From the explanation, the only place to receive money from credits earned was at the establishment. Based on my training, experience, and the experiences learned from other law enforcement agents, owners of businesses operating sweepstakes type video gambling devices train their employees to use phrases including "donation" and "redeem" to give the appearance of a sweepstakes operation instead of a gambling parlor. Also, owners will train their employees to correct patrons who use words including "gambling" and "cash-out."

29. Based on the investigation, Sacramento County Sheriff's Department determined [REDACTED\] was maintaining a house of gambling. On August 23, 2012, The County of Sacramento Internal Services, Department of Finance served [REDACTED\] with a Revocation of General Business License number GNB32011-0812 Document. This document stated that the General Business License for Mr. M's Internet Café was going to be revoked effective September 8, 2012.

30. On or about September 7, 2012, the County of Sacramento Business License Department of Finance received an appeal of the license revocation for Mr. M's Internet and Café from [REDACTED\]

31. On October 24, 2012, [REDACTED\] testified during a hearing concerning the legal status of Mr. M's Internet and Café. [REDACTED\] stated [REDACTED\] is the developer of the sweepstakes software. [REDACTED\] said he has a licensing agreement with [REDACTED\] and provided instruction on the functionality of the software. [REDACTED\] stated all the equipment he has in his business from [REDACTED\] is leased and he pays [REDACTED\] a percentage of his profits, specifically, he pays 25% of the business "internet sales" profits. [REDACTED\] did not disclose that in addition to owning an internet café, at the time he was employed by the Capital Entities.

32. On January 9, 2013, the County of Sacramento, Board of Supervisors sent [REDACTED\] a letter informing him the Board of Supervisors adopted the findings of the Hearing Officer and upheld the Hearing Officer's decision to revoke the license for Mr. M's Internet and Café. On January 17, 2013, the Sacramento Sheriff's Department issued a notice of violation and found Mr. M's Internet and Café to be operating without a valid business license.

ii. (Operation #2) Compu-More

33. On May 30, 2013, a state search warrant was served at Compu-More, an illegal gambling establishment located at 906 Sacramento Avenue, West Sacramento, California. During the search, CALDOJ agents interviewed [REDACTED\]. [REDACTED\] stated that he was a basic computer tech for [REDACTED\] headquarters at SUBJECT PREMISES 1 and his Tech Support Manager is [REDACTED\] recognized that the Internet Cafes are "borderline illegal." [REDACTED\] stated the owners of [REDACTED\] are [REDACTED\] and KEVIN FREELS. [REDACTED\] said [REDACTED\] creates the software used at the Internet Cafes.

iii. (Operation #3) Funsweeps

34. CALDOJ BGC's Sacramento Regional Office was contacted by the Sacramento Sheriff's Department and informed that an internet café, named Funsweeps, located at 2902 Auburn Boulevard, Sacramento, California, was providing suspected illegal casino type games for their patrons, in violation of California Penal Code Section 330b.

35. On January 23, 2013, two Undercover Employees (UCEs) entered 2902 Auburn Boulevard and observed approximately 35 sweepstakes-type video gambling devices. Approximately 20 patrons were observed at the terminals playing various video gambling games. Agents visually identified [REDACTED\], behind the counter along with an unidentified black female adult (BFA). [REDACTED\] explained that if the UCE wanted to play pull tab games, like slot machines, the UCE would need an access card. The agent gave the BFA $10.00 and was told the card was $1.00 and he would receive $5.00 in free games. [REDACTED\] stated the agent could "redeem prizes" and not "cash out" because Funsweeps was not a casino. During the conversation, [REDACTED\] did not tell the agent about using the internet with this purchase. After swiping the playing card in a device with an associated computer tower and mouse, the display on the computer gambling machine showed the money translated into credits with each credit equaling one cent. One UCE played until there were no more credits on the card. The other UCE gave the BFA $20.00 to receive a card which was loaded with the associated credits. The UCE stopped playing the computer gambling device with 1600 credits remaining on the card. That UCE redeemed the card with the BFA and received $16.00. The selection of games played by the UCEs was games advertised on the Capital Entities websites.

36. After concluding the gaming session, the agent attempted to use the internet option on the log in screen. The agent attempted to research a topic using a Google web browser. The internet response was slow and the screen froze a few times. Based on my training, experience, and the experiences learned from other law enforcement agents, if an internet café is selling internet time, the internet service provided would be operational on a continual basis. Conversely, if the internet appears slow or does not work, this is an indication of a business using internet time as a reason to be operating a gambling location.

37. On February 14, 2013, as a result of the above information, a search warrant was served by Sacramento Sheriff's Department and CALDOJ BGC Sacramento Regional Office for the establishment. Fifty three sweepstakes-type video gambling devices were seized by the Sacramento Sheriff's Department as well as $262.00 in cash from the office and $1161.97 located in the safe. Additionally, telephone numbers for [REDACTED\] employees and technical support were found on the premises including a business card for [REDACTED\] Sales as well as an AT&T phone bill for [REDACTED\] 2902 Auburn Boulevard, Sacramento, California.

38. Funsweeps employee [REDACTED\] made the following statements during an interview subsequent to the search warrant:

39. A review of the Capital Entities accounts did not show any check deposits from any illegal internet cafes known to be associated with [REDACTED\] Based on my experience and discussion with other law enforcement agents, criminals use cash to evade law enforcement ability to detect and track their illegal activities.

iv. (Operation #4) Bullseye Internet Center

40. In February 2013, CALDOJ BGC Sacramento Regional Office was contacted by Yuba City Police Department concerning an internet cafe suspected of providing casino type games for their patrons, in violation of California Penal Code Section 330b, specifically, Bullseye Internet Café (BIC) located at 402 Colusa Avenue, Unit A, Yuba City, California. The Business License Applications for BIC list [REDACTED\] as being associated with the business, and state "selling internet time with promotional sweepstakes" as the business activities.

41. On March 7, 2013, UCEs from CALDOJ BCG entered the business premises at BIC and saw approximately 22 sweepstakes-type video gambling devices. The UCEs purchased cards used as access devices for the video gambling devices and paid the cashier to have money put onto the playing cards. The UCEs used the playing cards to gain access to the gaming devices. The selection of games played by the UCEs was games advertised on the Capital Entities websites. The UCEs played the games and won or lost credits, as shown on the screen. According to the UCEs, the only prize from winning any of the games was cash, and the UCEs received their winnings in cash from the cashier before exiting the location.

42. As a result of the above information, a search warrant was obtained for BIC on March 20, 2013. Thirty two sweepstakes-type video gambling devices were seized by the Yuba City Police Department, as well as $395.17 from the cash box located in the business office and $3,514.20 from the office safe. Upon execution of the search warrant, employee [REDACTED\] was identified as a cashier at BIC and was interviewed. [REDACTED\] said customers gave her money to convert into points on a playing card she gave them. The playing card would be used to play games on the computers within the Internet Center. If customers won games, they contacted [REDACTED\] and she "redeems" their money. [REDACTED\] agreed this system resembled gambling. [REDACTED\] said the most money she "redeemed" to a customer was $3000 and that the establishment netted $900 in a single night. A "Notice of Intention to Destroy Machines and Devices Pursuant to Section 335a of the California Penal Code" was posted on the exterior door of BIC by Yuba City Police Department.

v. (Operation #5) American Legion Post 447

43. Based on an anonymous phone call to the police from a possible employee from American Legion 447 (AL 447) located at 720 Santiago Avenue, Sacramento, CALDOJ BGC began investigating an illegal sweepstakes-type video gambling devices on the premises. On March 14, 2013, the Secretary for AL 447, [REDACTED\] stated he entered into a verbal agreement with [REDACTED\] to operate two computers with internet gambling software. [REDACTED\] named [REDACTED\] as the [REDACTED\] employee with whom he interacted. [REDACTED\] has been verified as being employed by the Capital Entities by records, surveillance, and the business card [REDACTED\] left with AL 447. [REDACTED\] said no agreement was made in writing, but the verbal agreement was that AL 447 would pay [REDACTED\] 50% of all earnings from the two computers.

44. [REDACTED\] bookkeeper for AL 447, gave agents copies of paperwork involving AL 447's relationship with the Capital Entities. Among the paperwork was an invoice with Capital Sweepstakes Systems in the upper left hand corner for invoice number 21463, dated April 15, 2013, in the amount of $429.55, billed to American Legion Post 447, [REDACTED\] to remit to Capital Sweepstakes Systems, SUBJECT PREMISES 1. The invoice has columns labeled "cash in," "cash out," "cash net," and "net amount," separated by a daily amount.

45. A state search warrant was served on Bank of America for account number xxxxxxxx7496. The documents received pursuant to this search warrant included five checks from AL 447 to Capital Sweepstakes totaling $5,865.44. A unique five digit invoice number was written in the notes section of the check. Account number xxxxxxxx7496 was in the name of Capital Sweepstakes Systems, and the address associated with the account was SUBJECT PREMISES 1. [REDACTED\] were on the signature card for this account, identified as Controller and President, respectively.

vi. (Operation #6) American Legion Post 437

46. On October 1, 2013, the Post Commander for American Legion Post 437 (AL 437) located at 14770 Austin Road, Clearlake, California, spoke to agents. The Post Commander, [REDACTED\] told agents he was contacted by [REDACTED\] employed by Capital Sweepstakes Systems, about installing sweepstakes-type video gambling devices on site, and that they had negotiated a 50% split on profits. On October 3, 2013 [REDACTED\] conducted training for the local American Legion on sweepstakes type video gambling devices installed by Capital Sweepstakes Systems at AL 437. UCEs from CALDOJ BCG attended this training.

47. During the training [REDACTED\] said patrons are to "donate" to the Post when ordering drinks at the bar. [REDACTED\] said it is important to remember people are buying "Sweepstakes" points and this is not illegal gambling. Money from patrons is entered into a system with a ticket printed out. One side is the Sweepstakes side and the other is the Total Win side; the Sweepstakes side has no cash value, but the Total Win side can be cashed in. [REDACTED\] said fraternal organizations are their best customers.

48. [REDACTED\] compared the games to "pull tabs," similar to a slot machine and said customers "bet" progressively making this game similar to progressive games in a casino. She explained this means it is possible to "watch the numbers go up." When asked by a class participant if money used for this purpose is gambling, she said "they are making a donation" referring to the patron playing the computer video gaming device and later said the games are as "absolutely compliant" as can be. [REDACTED\] further explained organizations have to be selling "something," we are selling "internet time."

49. [REDACTED\] provided a pamphlet advertising the games put out by Capital Sweepstakes Systems, and her business card with her name and telephone number [REDACTED\] to the participants. Telephone number [REDACTED\] is registered to the business name [REDACTED\]

50. On October 11, 2013, an individual associated with AL 437, [REDACTED\] had a telephonic meeting with a person who identified himself as "Don FREELS, I own the company." This conversation was recorded at the direction of law enforcement. [REDACTED\] informed FREELS that a Department of Justice Special Agent had called him in regards to the computer gaming machines. In response, FREELS made the following statements:

vii. (Operation #7) Metis Learning Center

51. On September 19, 2013, Sacramento County Sheriff's Department Sergeant [REDACTED\] responded to a call for assistance in the parking lot of 7240 Southgate Drive, Sacramento, California. Sergeant [REDACTED\] saw equipment inside the business which resembled equipment commonly found in illegal gaming cafes. Additionally Sergeant [REDACTED\] saw patrons playing "casino-like games" on the computers. Patrons stated there was another internet café located at 8158 Florin Road Suite H, Sacramento, California.

52. On December 30, 2013, Sacramento County Sheriff's Department conducted an inspection at a suspected illegal internet gambling café, Bijon Network Center LLC, located at 9555 Folsom Boulevard, Sacramento, California. The cashier working at the internet café at the time of the inspection was [REDACTED\]. Detectives determined there were two other possible illegal gambling locations, from evidence found during the search: 8158 Florin Road and 7240 East Southgate Drive, both in Sacramento, California. [REDACTED\] told detectives [REDACTED\] hired him and collected the money nightly from the business. SSD Detectives concluded the internet café at 9555 Folsom Boulevard was an illegal gambling location and closed the business. The name on the lease for the property of 9555 Folsom Boulevard was [REDACTED\]

53. Further investigation revealed an internet café located at 8158 Florin Road licensed as Florin Road Learning Centers. The Sacramento County Licensing database listed Florin Road Learning centers located at 8158 Florin Road Suite H, Sacramento, California and 7240 East Southgate Drive as being owned by Metis Learning Center and the properties leased to [REDACTED\]. The Sacramento County Business License database listed the business owner for 7240 East Southgate, Suite D as [REDACTED\]

54. On January 8, 2014, a UCE with CALDOJ BCG conducted an undercover operation at 8158 Florin Road Suite H. The UCE stated the location had approximately 31 computer stations and 40 patrons. UCE paid the cashier $20.00 of state provided funds and received a pin number on a slip of paper to use to access the computer station. The UCE played approximately 18 different gambling games. The UCE received $21.00 from the cashier when cashing out.

55. A second undercover operation was conducted on February 6, 2014 at the same location. The UCE stated the location had approximately 45 computer stations and approximately 50 patrons. Again the UCE paid the cashier $20.00 of state provided funds and received a pin number on a slip of paper to use to access the computer station. The UCE stated the games played included "Prospector's Paradise" and "Viva Las Vegas" which were computer slot machine style gambling games advertised by Capital Entities.

56. On February 20, 2014 Sacramento County Sheriff's Department and other Law Enforcement Officers and Agents served a search warrant on "Metis Learning Center" at 8158 Florin Road, Suite H, Sacramento, California, which was signed on February 13, 2014 by the Honorable Judge Steven White. Items seized during the search included 46 illegal computer gambling systems, magnetic strip cards, and pin number receipts.

57. On March 4, 2014, SSD Detectives and a deputy with the Sacramento County Probation Department performed a probation search at [REDACTED\] residential address, [REDACTED\] During the search, the following items were taken or photographed:

viii. (Operation #8) 10108 North Lower Sacramento Road, Stockton, California

58. On March 26, 2014, CALDOJ BCG conducted an undercover operation using a UCE at 10108 North Lower Sacramento Road, Stockton, California. At approximately 1940 hours, the UCE entered the illegal gambling establishment. The UCE saw approximately 35 computer gaming stations and 10 patrons using the gambling devices; UCE saw no one accessing the internet or "surfing." UCE approached the cashier and was asked if he wanted to play. The cashier informed UCE that all the machines had Keno on them. Keno is a lottery-type gambling game that is often offered by state lotteries and also at casinos. UCE gave the cashier $20.00 and a receipt with a pin number from the cashier. The cashier told UCE he had 3000 additional credits because it was UCE's first time playing. UCE used the pin number on the receipt to gain access to the gambling device and saw approximately 20 different slot machine style games offered. Upon completion of playing, UCE returned to the cashier station and handed the cashier the receipt and received $30.00, which corresponded to the winnings UCE saw displayed on the screen of the gambling device after completing play.

59. On March 27, 2014, CALDOJ BCG conducted another undercover operation 10108 North Lower Sacramento Road utilizing a UCE. At approximately 1940 hours, the UCE entered the illegal gambling establishment. The UCE saw approximately 35 computer gaming stations and 10 patrons using the gambling devices; UCE saw no one accessing the internet or "surfing." UCE saw all the machines appeared to have "Dingo" software. UCE went to the cashier window and was asked if he wanted to play. The UCE gave the cashier $20.00. UCE selected a computer and used the pin number on the receipt to access the gambling programs and saw approximately 20 different slot machine style games offered. UCE returned to the cashier station and handed the cashier the receipt and received $20.00 which corresponded to the winnings UCE saw displayed on the screen of the gambling device after playing. While in the business, UCE identified [REDACTED\] as being in the business and the cashier cage. [REDACTED\] was previously identified in a photograph on a camera of [REDACTED\] and suspected to have worked with [REDACTED\] in association with [REDACTED\]

ix. (Operation #9) — 29 North Aurora Street, Stockton, California

60. In August 2014, Stockton Police Department received a complaint about suspicious activity located at 29 North Aurora Street, Stockton, California. A review of the City of Stockton Treasury Business Licensing database stated the business was owned by [REDACTED\] The business name was listed as "Then Network Center" and the business description was listed as "computer networking and cell phone sales." On August 14, 2014, Stockton Police Department executed a search warrant at 29 North Aurora Street and found evidence the business may have been involved in operating illegal slot machines in violation of California penal code 330b. While serving the search warrant, Stockton Police Department Detectives located flyers advertising both the 29 North Aurora Street location and another location at SUBJECT PREMISES 2, suggesting the locations operate similar types of businesses and are operated by the same owner(s).

x. (Operation # 10) 8245 Florin Road B1, Sacramento, California

61. On June 30, 2014, Sacramento Sheriff's Department was informed of a possible illegal sweepstakes-type video gambling business located at 8245 Florin Road, Sacramento, California. The Sacramento Business License database for the location showed there were no current licenses for the location.

62. On July 1, 2014, Sacramento Sheriff's Department received a call from a male who identified himself as [REDACTED\] stated he owned a real estate business located on the second floor of the building 8245 Florin Road. [REDACTED\] said since the new renters leased the location, he saw increased foot traffic going into the location and heard noises possibly related to illegal sweepstakes-type video gambling businesses. The leasing group for the Location #11 said the location was being leased by [REDACTED\]

63. On July 2, 2014, Sacramento Sheriff's Department Investigations/Intelligence Bureau conducted an inspection of the business located at 8245 Florin Road. The purpose of the inspection was to investigate a possible business operating without a license. Sacramento Sheriff's Department Detectives interviewed [REDACTED\] during the inspection. The key points [REDACTED\] interview are listed below:

VI. PROBABLE CAUSE REGARDING SPECIFIC LOCATIONS

A. SUBJECT PREMISES 1 (5940 Key Court, Loomis, California)

64. Based on a review of the loan file from [REDACTED\] SUBJECT PREMISES 1 was purchased in or about January of 2012 by [REDACTED\] The loan file stated that [REDACTED\] was "a single asset entity designed to hold and manage real estate." The loan file states that [REDACTED\] is owned and managed by KEVIN FREELS, [REDACTED\] and [REDACTED\] The loan file states that the property would be fully deeded to [REDACTED\]

65. Trash was retrieved from the dumpster in the vicinity of SUBJECT PREMISES 1, the headquarters CAPITAL ENTITIES, on various dates in May 2014. Included in the trash were the following:

66. On July 2, 2014, Internet café/illegal gambling business owner [REDACTED\] told Sacramento Sheriff's Department Detectives he signed a contract with [REDACTED\] warehouse location in Loomis, California. Furthermore, [REDACTED\] told SSD Detectives, he spoke with a female named [REDACTED\] is a Capital Entities employee and has been seen during surveillance.

67. During an undercover operation on October 1, 2013, at an American Legion post (as described earlier in this affidavit), [REDACTED\] told UCEs that Capital Sweepstakes Systems develops all of their own software and that everything is centered out of Loomis, California. She further stated if the gaming system is not shut off at the Internet café/ illegal gambling location, Capital Sweepstakes Systems is able to see mistakes from their headquarters. Later [REDACTED\] said the owners of Capital Sweepstakes Systems are "hands on" and they are in the Loomis office.

B. SUBJECT PREMISES 2 (1220 West Fremont Street, Stockton, California)

68. The search warrant served at 29 North Aurora Street, Stockton, California informed Stockton Police Department of a possible illegal sweepstakes gambling business located at 1220 West Fremont Street, Stockton, California. A review of the City of Stockton Treasury Business Licensing database stated the business was owned by [REDACTED\] The business license was activated on February 19, 2014. The business was described as a "cell phone retail and resource center." [REDACTED\] was listed as the leasing agent for the businesses located at 9555 Folsom Boulevard, Sacramento, California, 8158 Florin Road Suite H, Sacramento, California, and 7240 East Southgate Drive associated with [REDACTED\] Additionally, during a probation search of [REDACTED\] residence on March 4, 2014, Sacramento County Sheriff's Department Detectives found a flyer stating "Grand Opening Stockton Players" for locations 10108 North Lower Sacramento Road, Stockton, California and 1220 West Fremont Street, Stockton, California.

69. On August 25, 2014, Stockton Police Department Detectives conducted an Undercover Operation at 1220 West Fremont Street, Stockton, California with UCEs. At approximately 8:23 pm, the UCEs entered the location and walked to the casher's location. At 8:38 pm, one UCE requested a sweepstakes credit of $17.00 from the casher and paid $17.00 cash with department provided funds. The cashier stated the credit was for "Internet" but the UCE could play "whatever." The receipt read "Comm Center CA," listed the date and time of transaction, and showed a "New Balance" of 1700 points. The UCE played games called "Superman" and "Lucky 7" until there was no more balance on the account.

70. The name listed on the license application for this location is the same as on the lease paperwork for the internet cafés discussed earlier in this affidavit and associated with the Capital Entities located at 9555 Folsom Boulevard, Sacramento, California, 8158 Florin Road Suite H, Sacramento, California, and 7240 East Southgate Drive.

VII. TRAINING AND EXPERIENCE RELATED TO GAMBLING SEIZURES

71. Based upon my training and experience, my discussions with other law enforcement agents involved in this case that have experience in gambling investigations, and interviews of persons with knowledge about the matters described herein, the following traits are common practices of those persons involved in illegal video gambling production, sales, and maintenance.

72. Owners of illegal gambling businesses, including video gaming machine operators, keep extensive records of their illegal business activity, including, but not limited to, records of the locations where their machines are located and the profits associated with the machines, along with records of the expenses associated with the illegal gambling activity. More likely than not, these records are kept on computers at the location that is the primary business headquarters of the illegal activity but may also be stored at a residence of the owner or other person with a key role in the illegal business. Additionally, marketing materials including product pamphlets, business cards, product samples, and information pertaining to the legality of the machines will be kept at the location that is the primary business headquarters of the illegal activity but may also be stored with persons employed in sales or marketing of the business to include their residence or vehicle(s).

73. There are often large sums of cash maintained at businesses involved in an illegal gambling business. Cash is usually secured in a hidden or locked location within the establishment. Additionally, because illegal gambling is a cash business and to attempt to avoid tracing its origins, owners of illegal gambling establishments may make payments to the gambling software distributor using cash. Many owners and operators of illegal gaming businesses prefer to deal in cash in an effort to thwart law enforcement from tracing money.

74. The owners of these businesses that illegally operate video gaming machines often hoard cash outside the reach of financial institutions, at their residences and business locations. They use nominee names to purchase and hide assets. They maintain detailed financial records of their business in order to deter theft by employees and be able to share the appropriate amount of gambling proceeds with their confederates.

75. Persons engaged in illegal gambling businesses commonly keep records for lengthy periods of time. They commonly maintain computer files, books, records, receipts, notes, ledgers, journals, diaries, address books, and other sundry papers or electronic evidence relating to their activity. Individuals involved in illegal gambling commonly are involved in multi-source, multi-customer, long-term activities, and therefore, must keep careful records of their prior illegal transactions.

76. Individuals involved in the marketing and sales of illegal gambling systems must tailor their information to appear legal. Sales representatives will speak to the ease of installation and high profit margin. Sales representatives will discuss methods of dealing with law enforcement and assist customers with applying for the proper paperwork for registering with the state.

VIII. [REDACTED\]

77. Based on the above information, there is probable cause to believe that all of the records located at SUBJECT PREMISES 1, within the time period listed on Attachment B-1, will evidence criminal activity, with the exception of [REDACTED\]

78. Based on my investigation and review of records, the sole purpose of the Capital Entities is to further their illegal gambling enterprise. The Capital Entities market their products to various customers throughout the United States, monitor the gambling operations remotely through what appears to be a localized server, provide on-site technical support, and share the profits. All of the records located at Subject Premises A-1, other than the exceptions described above, will evidence criminal activity.

IX. PERMISSION TO SEIZE COMPUTER SYSTEMS AND PERIPHERALS

79. I have consulted with FBI Information Technology Specialist (ITS) and Computer Forensic Examiner (FE) Alan Russell Schmidt, who has been a Forensic Examiner since 2006. FE Schmidt is specially trained in computer search and seizure and is certified by the FBI as a member of the FBI Computer Analysis Response Team (CART). FE Schmidt has been a member of CART since 2005 and has conducted numerous searches and seizures involving computers and computer data. FE Schmidt has also told me what is summarized in paragraphs below

80. Computer hardware, software, documentation, passwords, and data security devices may be important to a criminal investigation in two distinct respects: (1) the items themselves may be instrumentalities, fruits, and/or evidence of crime; and/or (2) items may have been used to collect and store information about crimes (in the form of electronic data). Thus, Rule 41 of the Federal Rules of Criminal Procedure permits the government to search and seize computer hardware, software, documentation, passwords, and data security devices which are: (1) instrumentalities, fruits and/or evidence of crime; and/or (2) storage devices for information about crimes.

81. Based on his/her knowledge, training, and experience, FE Schmidt knows that searching and seizing information from computers often requires agents to seize most or all electronic storage devices (along with related peripherals) to be searched later by a qualified computer expert in a laboratory or other controlled environment. This is true because of the following:

A. THE VOLUME OF EVIDENCE

82. Computer storage devices can store the equivalent of thousands of pages of information. Additionally, a suspect may try to conceal evidence; he or she might also store it in random order with deceptive file names. This may require searching authorities to examine all the stored data to determine which particular files are evidence or instrumentalities of crime. This sorting process can take weeks or months, depending on the volume of data stored, and often it would be impractical to attempt this kind of search on site.

B. TECHNICAL REQUIREMENTS

83. Searching computer systems for criminal evidence is a highly technical process requiring expert skill and a properly controlled environment. For example, on site and laboratory analysis by a qualified computer specialist is often required in order to properly retrieve and analyze electronically stored (computer) data, document and authenticate the data, and prevent the loss of the data either from accidental or deliberate programmed destruction. In many cases, the evidentiary data can be backed up to government owned computer data storage devices at the site of the search. However, there are circumstances that may necessitate the seizure and removal of the entire computer system and peripheral devices to a secure laboratory setting in order to analyze and extract the evidence. To effect accurate and complete analysis may require seizure of all computer equipment and peripherals which may be interdependent, the software to operate the computer system, data security devices (including passwords) and related instruction manuals which contain directions concerning the operation of the computer system and software programs. This is true because the peripheral devices which allow users to enter or retrieve data from the storage devices vary widely in their compatibility with other hardware and software. Many system storage devices require particular input/output devices in order to read the data on the system. It is important that the computer expert be able to properly re-configure the system as it now operates in order to accurately retrieve the evidence. In addition, the computer expert needs the relevant system software (operating systems, interfaces, and hardware drivers) and any application software which may have been used to create the data (whether stored on hard drives or on external media), as well as all related instruction manuals or other documentation and data security devices.

84. Based on the above facts and circumstances and information, permission is requested to seize all computer systems and peripherals if necessary even though there may be unrelated information stored on the computer system(s). This unrelated data will not be used and will be separated (to the extent possible) from the evidentiary data and preserved.

85. The terms "records," "documents," and "materials" include all of the items described in Attachment B in whatever form and by whatever means they may have been created and/or stored. This includes any handmade, photographic, mechanical, electrical, electronic, and/or magnetic forms. It also includes items in the form of computer hardware, software, documentation, passwords, and/or data security devices.

i. Computer Hardware

86. Computer hardware consists of all equipment which can collect, analyze, create, display, convert, store, conceal, or transmit electronic, magnetic, optical, or similar computer impulses or data. This includes any data-processing devices (such as central processing units, memory typewriters, and self-contained "laptop" or "notebook" computers); internal and peripheral storage devices (such as fixed disks, external hard disks, floppy disk drives and diskettes, tape drives and tapes, optical storage devices, transistor-like binary devices, compact flash cards, smart media cards and other memory storage devices); peripheral input/output devices (such as keyboards, printers, scanners, plotters, video display monitors, and optical readers); related communications devices (such as modems, cables and connections, recording equipment, RAM or ROM units, acoustic couplers, automatic dialers, speed dialers, programmable telephone dialing or signaling devices, and electronic tone-generating devices); as well as any devices, mechanisms, or parts that can be used to restrict access to computer hardware (such as physical keys and locks).

ii. Computer Software

87. Computer software is digital information which can be interpreted by a computer and any of its related components to direct the way it works. Software is stored in electronic, magnetic, optical, or other digital form. It commonly includes programs to run operating systems, applications (like word-processing, graphics, or spreadsheet programs, utilities, compilers, interpreters, and communications programs).

iii. Computer related Documentation

88. Computer related documentation consists of written, recorded, printed, or electronically stored material which explains or illustrates how to configure or use computer hardware, software, or other related items.

iv. Computer Passwords and Other Data Security Devices

89. Computer passwords and other data security devices are designed to restrict access to or hide computer software, documentation, or data. Data security devices may consist of hardware, software, or other programming code. A password (a string of alpha-numeric characters) usually operates as a sort of digital key to "unlock" particular data security devices. Data security hardware may include encryption devices, chips, and circuit boards. Data security software or digital code may include programming code that creates "test" keys or "hot" keys, which perform certain pre-set security functions when touched. Data security software or code may also encrypt, compress, hide, or "booby trap" protected data to make it inaccessible or unusable, as well as reverse the process to restore it.

X. SUMMARY OF PERTINENT FINANCIAL ANALYSIS

90. I have spoken with Special Agent Jason Lamb with IRS-Criminal Investigation ("IRS-CI") regarding the tracing of funds through the Capital Entities' bank accounts. Agent Lamb has been a criminal investigator with IRS-CI since 2000 and has investigated wire fraud, mail fraud, bank secrecy violations, money laundering and other financial crimes. Agent Lamb informed me that based on his ongoing review of financial records, the Capital Entities utilized over thirty bank accounts at six different financial institutions to accomplish their illegal gambling business. In addition to the financial accounts directly connected to the Capital Entities, agents identified nearly seventy additional accounts as being peripherally associated to the scheme. The associated accounts were also examined as part of this investigation.

91. To execute their scheme, the Capital Entities maintained various front-line accounts that received deposits directly from Internet gambling cafés and benevolent organizations offering gambling, including[REDACTED\] an entity owned and controlled by [REDACTED\] From May 23, 2007 to July 30, 2014, approximately $17 million in gaming proceeds was deposited into these accounts. [REDACTED\]

[REDACTED\]

3 The Capital Entities bank accounts were verified through an examination of account opening documents and banking signatory cards received through subpoena. The accounts were opened utilizing incorporation documents for the new account holder and through a signatory card of a principal working on behalf of the Capital Entities as discussed earlier in the affidavit [REDACTED\]

[REDACTED\]

93. Fully analyzed and broken down into a digestible framework, the first layer of accounts receive gaming proceeds directly from the Internet cafés and benevolent organizations-referred to herein as the "Primary Deposit Accounts". [REDACTED\]

[REDACTED\]

94. The next and second financial layer represents accounts that receive funds directly from Primary Deposit Accounts - referred to herein as "Flow-Through Accounts". [REDACTED\] employees would transfer funds from Primary Deposit Accounts to Flow-Through Accounts, [REDACTED\] The movement of the money to Flow-Through Accounts introduced a financial layer between retail gaming businesses and the Capital Entities [REDACTED\]

[REDACTED\]

95. The third financial layer of accounts received funds from the Flow-Through accounts and were used to[REDACTED\] pay operational costs, including utilities, taxes, payroll and rent — referred to herein as "Holding Accounts."4 In contrast to previously described accounts, the Holding Accounts frequently had substantial account balances and funds remained in the accounts for longer periods of time. [REDACTED\]

[REDACTED\]

96. The fourth financial layer accounts receive funds from Holding Accounts — referred to herein as "End User Accounts". The End User Accounts consist of individual and entity accounts, all of which are under the control Capital Entities' owners. These accounts are funded primarily through Holding Accounts, but did receive minimal funds from the Primary Deposit and Flow-Through Accounts. [REDACTED\]

[REDACTED\]

97. [REDACTED\]

Forfeiture Theories Relative to the Financial Accounts

98. The following section of this affidavit addresses the specific financial accounts utilized and analyzed by SA Lamb in the ongoing scheme. Although every attempt was made to obtain current financial records of the Capital Entities accounts, including subsidiary accounts held by the owners and operators of the entities, it is impossible to obtain up to date account information due to the volume of records requested and turn-around of production by the financial institutions. Accordingly, the dates of records analyzed and last known account balance of each account will be identified in the discussion.

99. In the sections below, each asset will be identified and three forfeiture theories will be discussed throughout the affidavit, 18 U.S.C. §§ [REDACTED\] 981(a)(1)(C) and 984.

100. [REDACTED\]

101. 18 U.S.C. § 984 — Where property involved in the forfeiture action is cash or monetary instruments in bearer form which are deposited into a financial institution, it shall not be necessary to identify the specific property involved in the offense and it shall not be a defense that the funds involved in the crime were deposited, removed and replaced with identical funds which were not used in the action arising to forfeiture of the funds. The forfeiture action involving the funds that is the basis of this violation must have occurred within the last 1 year of the offense and will be based on forfeiture of proceeds of illegal activity under Title 18 U.S.C. §981(a)(1)(C).

102. 18 U.S.C. § 981(a)(1)(C) - Direct tracing of "proceeds" from violating Title 18 U.S.C. §1955, operation of an illegal gambling business. These funds are often referenced as Specified Unlawful Activity ("SUA") pursuant to 18 U.S.C. §1961(1). This method requires the direct tracing of SUA proceeds.

103. 18 U.S.C. § 981(b) - Any property subject to forfeiture to the United States under 18 U.S.C. § 981(a) may be seized by the Attorney General and, in the case of property involved in a violation investigated by the Secretary of the Treasury or the United States Postal Service, the property may also be seized by the Secretary of the Treasury or the Postal Service.5

104. When tracing funds to support forfeiture forfeiture under 18 U.S.C. § 981(a)(1)(C), SA Lamb used a "Good-In, First-Out" method or "GIFO". The GIFO method is a well-established tracing method where "clean funds" (including funds which cannot be established as SUA such as cash) are segregated from SUA funds in the tracing analysis until they have been disbursed from the account. Under the GIFO method, "clean funds" transferred into a bank account are assumed to be the first funds to leave the account. For example, if a bank account is opened using $100,000 in clean funds and then $100,000 in illicit proceeds are later deposited into the account, using the GIFO method, the first $100,000 leaving the account is assumed to be the clean or untainted funds leaving only the illicit funds behind. All subsequent transactions from this account will be deemed as illicit or SUA proceeds unless a new clean deposit is transacted into the account and the tracing will continue until the clean money is dispensed from the account.

[REDACTED\]

[REDACTED\]

A. PRIMARY DEPOSIT ACCOUNTS

106. As explained above, Primary Deposit Accounts received funds directly from the Internet cafés and benevolent organizations, [REDACTED\]

[REDACTED\]

i. Account # 1 - [REDACTED\] Wells Fargo Acct No. ***7607

107. From May 23, 2007 to July 28, 2014, Internet cafés and benevolent organizations deposited approximately $8.735 million of gaming monies into [REDACTED\], Wells Fargo Account ***7607, ("[REDACTED\]***7607"). SA Lamb reviewed the line-item deposits for [REDACTED\]***7607 which revealed deposits from gaming entities (or groups offering gaming activity) such as [REDACTED\] with notations such as "invoice" and "license fee". Since May 2007, deposits into [REDACTED\]***7607 consisted almost exclusively from Internet cafés and benevolent organizations — many noting "fees," thus SA Lamb believes the account contains only SUA proceeds.

108. Since 2007, [REDACTED\]***7607's balance have been volatile as funds are frequently moved from the account via wire or check after deposits accumulate. In fact, the most recently obtained bank statement revealed a balance of only $2,218.96, despite deposits of approximately $8.735 million since 2007. In total, more than $8 million in gaming monies were moved from [REDACTED\]***7607 to several other accounts maintained by the Capital Entities, including [REDACTED\]

Forfeiture Theory: Direct Tracing of SUA Deposits under 18 U.S.C. § 981(a)(1)(C) within one year from the date of this affidavit as fungible property under 18 U.S.C. § 984

109. Over the last twelve months, Internet cafés and benevolent organizations have deposited $302,447.36 into [REDACTED\]***7607. The $302,447.36 figure was developed by analyzing each deposit — a line-item review — from September 23, 2013 to December 31, 2013, confirming the deposit originated from an entity providing illegal gaming in California [REDACTED\]. A similar method was used to generate the deposit history from January 1, 2014 to July 28, 2014, specifically, SA Lamb reviewed bank statements and deposited items (i.e., checks) to generate totals and verify the originating source as a gaming entity. Accordingly, up to $302,447.36 from [REDACTED\]***7607 is subject to forfeiture as proceeds of an SUA under 18 U.S.C. §§ 981(a)(1)(C) and 984 (one year deposits).

Forfeiture Theory: Direct Tracing of SUA Proceeds under 18 U.S.C. § 981(a)(1)(C)

110. Banking records were analyzed for [REDACTED\]***7607 between the period of May 23, 2007 and July 28, 2014 and the deposits were found to be associated to illegal gambling under a GIFO tracing analysis. Currency was treated as clean funds in the analysis unless information was received as to the true source of the currency. A review of deposited items found no currency deposits in the months leading up to the latest balance. Applying 18 U.S.C. § 981(a)(1)(C), all of the remaining proceeds in account [REDACTED\]***7607 as of July 28, 2014 are subject to forfeiture. As of this date, [REDACTED\]***7607 carried a balance of $2,218.96.

ii. Account # 2 - [REDACTED\], Wells Fargo Acct No. ***4862

111. From August 6, 2013 to July 30, 2014, Internet cafés and benevolent organizations deposited approximately $3,597,447 of gaming monies into [REDACTED\], Wells Fargo account ***4862 ([REDACTED\]***4862). SA Lamb reviewed the line-item deposits for [REDACTED\] ***4862 which revealed deposits from gaming entities (or groups offering gaming activity) such as [REDACTED\] with notations such as "invoice," "rental" or listing "inv" or "invoice" along with five digit numbers. Since August 2013, deposits into [REDACTED\]***4862 consisted almost exclusively from Internet cafés and benevolent organizations - many noting "invoices," thus SA Lamb believes the account contains only SUA proceeds.

112. Similar to [REDACTED\]***7607, the funds deposited into [REDACTED\]***4862 were transferred out by wire or check shortly after deposits, resulting in highly volatile daily balances. As of July 30, 2014, [REDACTED\]***4862 held a balance of $166,280.23. The funds transferred from this account were directed to several other accounts maintained by the Capital Entities, including [REDACTED\] and [REDACTED\]

Forfeiture Theory: Direct Tracing of SUA Deposits under 18 U.S.C. § 981(a)(1)(C) within one year from the date of this affidavit as fungible property under 18 U.S.C. § 984

113. Over the last twelve months, Internet cafés and benevolent organizations have deposited $3,351,570.79 into [REDACTED\]***4862. The $3,351,570.79 figure was developed by analyzing each deposit — a line-item review - from September 23, 2013 to December 31, 2013, confirming the deposits connect to an entity providing illegal gaming in California [REDACTED\]. A similar method was used to generate the deposit history from January 1, 2014 to July 28, 2014, specifically, SA Lamb reviewed bank statements and deposited items (i.e., checks) to generate totals and verify the originating source as a gaming entity. Accordingly, up to $302,447.36 from [REDACTED\]***4862 is subject to forfeiture as SUA proceeds under 18 U.S.C. §§ 981(a)(1)(C) and 984.

Forfeiture Theory: Direct Tracing of SUA Proceeds under 18 U.S.C. § 981(a)(1)(C)

114. Banking records were analyzed for [REDACTED\]***4862 between the period of August 6, 2013 and July 30, 2014 and the deposits were found to be associated to the illegal gambling operation. A review of deposited items revealed the most recent currency deposit was $1,898 on June 13, 2014 which was treated as clean funds utilizing the GIFO tracing method. Applying 18 U.S.C. § 981(a)(1)(C), all of the remaining funds in account [REDACTED\]***4862 as of July 30, 2014 are subject to forfeiture. As of this date, [REDACTED\]***4862 had a balance of $166,280.23.

iii. Account # 3 - [REDACTED\] Wells Fargo Acct No. ***4920

115. From August 6, 2013 to July 30, 2014, Internet cafés and benevolent organizations deposited approximately $3,748,428 of gaming monies into [REDACTED\] Wells Fargo Bank account ***4920 ([REDACTED\] ***4920). SA Lamb reviewed the line-item deposits for CBS ***4862 which revealed deposits from gaming entities (or groups offering gaming activity) such as [REDACTED\] with notations such as "license fee," "invoice" or listing "inv" or "invoice" along with five digit numbers or a date range. Since August 2013, deposits into [REDACTED\] ***4920 consisted almost exclusively from Internet cafés and benevolent organizations - many noting "invoice", thus SA Lamb believes the account contains only SUA proceeds.

116. Similar to the previous two Primary Deposit Accounts, the funds deposited into [REDACTED\] ***4920 were transferred out by wire or check shortly after deposits accumulated, resulting in highly volatile balances. The funds transferred from this account were directed to several other accounts as such as [REDACTED\] and [REDACTED\] As of July 30, 2014, [REDACTED\] ***4920's balance was $99,617.57.

Forfeiture Theory: Direct Tracing of SUA Deposits under 18 U.S.C. § 981(a)(1)(C) within one year from the date of this affidavit as fungible property under 18 U.S.C. § 984

117. Over the last twelve months, Internet cafés and benevolent organizations have deposited $3,101,460.25 into [REDACTED\] ***4920. The $3,101,460.25 figure was developed by analyzing each deposit — a line-item review - from September 24, 2013 to December 31, 2013, confirming that just over $700,000 in deposits connect to an entity providing illegal gaming in California [REDACTED\] A similar method was used to generate the deposit history from January 1, 2014 to July 28, 2014, specifically, SA Lamb reviewed bank statements and deposited items (i.e., checks) to generate totals and verify the originating source as a gaming entity, excluding cash (totaling approximately $2,401,460.25). Accordingly, up to $3,101,460.25 from [REDACTED\] ***4920 is subject to forfeiture as proceeds of an SUA under 18 U.S.C. §§ 981(a)(1)(C) and 984 (one year deposits).

Forfeiture Theory: Direct Tracing of SUA Proceeds under 18 U.S.C. § 981(a)(1)(C)

118. Banking records were analyzed for [REDACTED\] ***4920 between the period of August 6, 2013 and July 30, 2014 and the deposits were found to be associated to the illegal gambling operation unless as a cash deposit which cannot be deemed as SUA without additional information. A review of deposited items revealed the most recent cash deposit was $1,697.35 on June 20, 2014, which was treated as clean funds and tracked through distribution in a GIFO tracing method. Applying Title 18 U.S.C. § 981(a)(1)(C), all of the remaining proceeds in account [REDACTED\] ***4920 as of July 30, 2014 are subject to forfeiture. As of that date, [REDACTED\]***4920 carried a balance of $99,617.57.

iv. Account # 4 - [REDACTED\], Wells Fargo Acct ***5732

119. [REDACTED\] Wells Fargo Bank account ***5732 ("[REDACTED\] ***5732") was funded entirely with the proceeds from the operation of Internet cafés and benevolent organizations in [REDACTED\] California and [REDACTED\] Prior to September 2013, [REDACTED\] ***5732 received only deposits from illegal gaming operations in [REDACTED\] and California. Beginning in September 2013, however, [REDACTED\] gaming businesses started depositing money into the account. As [REDACTED\] allows "pull-tab" gambling to operate in their state, the proceeds of gaming derived from [REDACTED\] were excluded for the purposes of this analysis. Since September 2013, the [REDACTED\] Internet cafés and charitable organizations have increasingly produced revenue which has been deposited exclusively into the [REDACTED\] ***5732 account while the proceeds of the café's operating out of the [REDACTED\] and California were being deposited into other Capital Entities' other accounts. Funds traced out of [REDACTED\] ***5732 into other Capital Entities' accounts or into accounts of the owner/operators of the Capital Entities have been segregated to include only the proceeds of the gaming operations from [REDACTED\] and California. Between July 17, 2012 and November 11, 2012, $278,066 was deposited into this account derived from gaming in [REDACTED\] and California.

120. Banking records were analyzed for [REDACTED\] ***5732 from June 25, 2012 to July 30, 2014. Deposits into the account consisted almost exclusively from gaming in California, [REDACTED\] However, as discussed above, beginning in September of 2013 the deposits into account [REDACTED\] ***5732 were derived from [REDACTED\] gaming. Accordingly, SA Lamb believes that although deposits up until September 2013 consisted of SUA proceeds, since that date the funds have been commingled to such an extent that tracing good/bad funds is no longer viable. Accordingly, no forfeiture is sought for [REDACTED\] ***5732.

v. Account # 5 — Capital Sweepstakes Systems, Inc., Bank of America Acct ***7496

121. From March 1, 2013 to December 31, 2013, Internet cafés and benevolent organizations deposited approximately $854,452 of gaming monies into Capital Sweepstakes Systems, Inc., Bank of America account ***7496 ("CSS ***7496"). SA Lamb reviewed the line-item deposits for CSS ***7496 which revealed deposits from gaming entities such as [REDACTED\] with notations such as "sweepstakes systems," "Invoice," or five digit numbers. For the period of March 1, 2013 to December 31, 2013, deposits into CSS***4920 consisted almost exclusively from Internet cafés and benevolent organizations - many noting "sweepstakes" or "invoice", thus SA Lamb believes the account contains only SUA proceeds.

122. Similar to the accounts mentioned above, the funds deposited into the account were transferred out by wire or through check shortly after deposit resulting in highly volatile daily balances. As of December 31, 2013, the account held a balance of $2,012.80. Current banking records for this account from January 1, 2014 to current are still outstanding and no funds have been traced into other known accounts from CSS***7496 during that time period. The funds transferred from this account were directed almost exclusively to an account with the same name - Capital Sweepstakes Systems - at Merrill Lynch (discussed below).

123. Due to limited available bank records and the low balance in the account, no forfeiture is sought for CSS***7496.

vi. Account # 6 — [REDACTED\] Bank of America Acct ***1725

124. From April 25, 2013 and December 31, 2013, Internet cafés and benevolent organizations deposited approximately $262,581 of gaming monies into [REDACTED\] Bank of America account***1725 ([REDACTED\]***1725). SA Lamb reviewed the line-item deposits for [REDACTED\]***1725 which revealed deposits from gaming entities (or groups offering gaming activity) such as[REDACTED\] with notations such as "invoice," or five digit numbers. For the period of April 25, 2013 and December 31, 2013, deposits into [REDACTED\]***1725 consisted almost exclusively from Internet cafés and benevolent organizations - many noting "invoice", thus SA Lamb believes the account contains only SUA proceeds.

125. Similar to the above accounts, the funds deposited into [REDACTED\]***1725 were transferred out by wire or check shortly after deposits accumulated, resulting in highly volatile daily balances. The funds transferred from this account were directed almost exclusively to an account under the same name —[REDACTED\]—with Merrill Lynch (discussed below).

Forfeiture Theory: Direct Tracing of SUA Deposits under 18 U.S.C. § 981(a)(1)(C) within one year from the date of this affidavit as fungible property under 18 U.S.C. § 984

126. While $262,581 of gaming monies was deposited into [REDACTED\]***1725 from April 25, 2013 to December 31, 2013, only $107,028.71 can be traced to gaming deposits within the last year. Specifically, because accounts records were not made available after December 31, 2013, the $107,028.71 figure is the traceable amount for September 23, 2013 to December 31, 2013. Accordingly, up to $107,028.71 from [REDACTED\]***1725 is subject to forfeiture as proceeds of an SUA under 18 U.S.C. §§ 981(a)(1)(C) and 984 (one year deposits).

B. FLOW-THROUGH ACCOUNTS

127. Flow-Through Accounts received funds directly from Primary Deposit Accounts[REDACTED\]

[REDACTED\]

[REDACTED\]

[REDACTED\]

vi. Account # 7 -[REDACTED\], Wells Fargo Bank Acct***5591

128. [REDACTED\], Wells Fargo Bank Acct***5591 ("[REDACTED\]***5591") was funded with the illicit gaming monies. [REDACTED\]***5591 did not receive money directly from gaming businesses, but received transfers (check and wire) from Primary Deposit Accounts that received deposits directly from gaming businesses. In addition, [REDACTED\]***5591 received transfers from other accounts controlled by the owners of the Capital Entities; a review of the bank records reveals that the transfers were commingled with gaming money from[REDACTED\]***1725 and CSS***7496. In sum, [REDACTED\]***5591 was a hybrid Flow-Through and Holding Account because it generally held a higher balance than Flow-Through accounts, but also paid bills of the entities. [REDACTED\]***5591 was included in this section as its primary purpose was to channel funds to other accounts under the control of the Capital Entities.

129. From January 1, 2011 to July 30, 2014,[REDACTED\]***5591 was funded with money almost exclusively from the operation of illegal gaming devices. Once the funds were deposited in [REDACTED\]***5591, they were transferred to other accounts under the control of the Capital Entities (and discussed later in this affidavit). As of July 30, 2014, the account held a balance of $55,052.83. The funds transferred from this account were directed to several other accounts as part of the scheme but were titled under other entities such as "[REDACTED\] as well as to individual owners of the Capital Entities,[REDACTED\]

[REDACTED\]

Forfeiture Theory: Direct Tracing of SUA Deposits under 18 U.S.C. § 981(a)(1)(C) within one year from the date of this affidavit as fungible property under 18 U.S.C. § 984

131. Over the last twelve months, approximately $3,369,145 was deposited into [REDACTED\]***5591, all which is connected to gaming monies received by the Capital Entities. While the gaming operators did not directly deposit $3,369,145, the monies were transferred to [REDACTED\]***5591 shortly after deposit in Primary Deposit Accounts (or other tainted accounts). Accordingly, up to $3,369,145 from [REDACTED\]***5591 is subject to forfeiture as proceeds of an SUA under 18 U.S.C. §§ 981(a)(1)(C) and 984 (one year deposits).

Forfeiture Theory: Direct Tracing of SUA Proceeds under 18 U.S.C. § 981(a)(1)(C)

131. Banking records were analyzed for[REDACTED\]***5591 between the period of January 1, 2011 and July 30, 2014. A GIFO analysis was conducted for the account and all funds on account, as of July 30, 2014, were found to be traceable to the illegal gaming operation. Applying 18 U.S.C. § 981(a)(1)(C), all of the remaining proceeds [REDACTED\]***5591 as of July 30, 2014 is subject to forfeiture. [REDACTED\]***5591's balance was $99,617.57 on July 30, 2014.

viii. Account # 8 -[REDACTED\], Merrill Lynch Acct ***2156

133. [REDACTED\], Merrill Lynch Acct ***2156 ([REDACTED\]***2156) acted as a pass-through account for [REDACTED\]***1725, a Primary Deposit Account that was funded almost exclusively from Internet cafés and benevolent organizations involved in illegal gaming. From March 29, 2013 to June 30, 2014, the only source of deposits into [REDACTED\]***2156 were through check and wire transfers from [REDACTED\]***1725. Once the funds were deposited in [REDACTED\]***2156, they were transferred to other accounts, including[REDACTED\]***5591. As of June 30, 2014, the account held a balance of $2,659.03 due to volatility as a pass through account.

[REDACTED\]

[REDACTED\]

Forfeiture Theory: Direct Tracing of SUA Deposits under 18 U.S.C. § 981(a)(1)(C) within one year from the date of this affidavit as fungible property under 18 U.S.C. § 984

135. Over the last twelve months, $226,000 was deposited into [REDACTED\]***2156 from the gaming operation. Although these deposits are not from the gaming operators directly, the $226,000 represents gaming monies transferred form[REDACTED\]***1725, a Primary Deposit Account containing only gaming monies, to[REDACTED\]***2156. Accordingly, up to $226,000 from [REDACTED\]***2156 is subject to forfeiture as proceeds of an SUA under 18 U.S.C. §§ 981(a)(1)(C) and 984 (one year deposits).

ix. Account # 9 - Capital Sweepstakes Systems, Inc., Merrill Lynch Acct***2159

136. 43. Capital Sweepstakes Systems, Inc., Merrill Lynch Acct***2159 (CSS***2159) acted as a pass-through account for CSS***7496, a Primary Deposit Account funded almost exclusively from Internet cafés and benevolent organizations involved in illegal gaming. From May 1, 2013 to June 30, 2014, the only source of deposits into CSS***2159 were check and wire transfers from CSS***7496. Once the funds were deposited in CSS***2159, they were transferred to other accounts, including [REDACTED\]***5591. As of June 30, 2014, the account held a balance of $1,579.03 due to volatility as a pass through account.

[REDACTED\]

Forfeiture Theory: Direct Tracing of SUA Deposits under 18 U.S.C. § 981(a)(1)(C) within one year from the date of this affidavit as fungible property under 18 U.S.C. § 984

138. Over the last twelve months, $18,980.80 was deposited into CSS***2159 and believed to be traceable to the gambling operation. Although not deposited by the gaming operators directly, the $18,980.80 represents transfers from CSS***7496, a Primary Deposit Account that contained only tainted funds. Accordingly, up to $18,980.80 from CSS***2159 is subject to forfeiture as proceeds of an SUA under 18 U.S.C. §§ 981(a)(1)(C) and 984 (one year deposits).

C. HOLDING ACCOUNTS

139. Holding Accounts received funds from the Flow-Through accounts and were used to[REDACTED\] pay operational costs, including utilities, taxes, payroll and rent - referred to herein as "Holding Accounts." In contrast to previously described accounts, the Holding Accounts frequently had substantial account balances and funds remained in the accounts for longer periods of time. [REDACTED\]

[REDACTED\]

x. Account # 10 -[REDACTED\] Wells Fargo Bank account ***7603

140. [REDACTED\]Wells Fargo Bank account ***7603 ([REDACTED\]***7603") was funded with clean proceeds from the[REDACTED\]until early 2012 when the relationship terminated. [REDACTED\] After the relationship with[REDACTED\]ended,[REDACTED\]***7603 started to receive tainted deposits directly from[REDACTED\]***5591.

141. Banking records were analyzed for[REDACTED\]***7603 from January 1, 2008 to July 28, 2014. The primary source of funds into the account from 2008 through early 2012 was the[REDACTED\] Starting in late 2011 and continuing into at least July 2014, other than the short period from late 2011 to early 2012 when[REDACTED\]deposited money, the primary source of deposits into [REDACTED\]***7603 was[REDACTED\]***5591. As discussed above,[REDACTED\]***5591, was funded through other accounts which had been funded from the operation of illegal gaming devices. A GIFO analysis started with the last[REDACTED\] (March 20, 2012) and continued until August 2, 2012 when the last of the untainted[REDACTED\]left the account. Since August 2, 2012, the account has been tainted almost exclusively from deposits by[REDACTED\]***5591.

[REDACTED\]

Forfeiture Theory: Direct Tracing of SUA Deposits under 18 U.S.C. § 981(a)(1)(C) within one (1) year from the date of this affidavit as fungible property under 18 U.S.C. § 984

143. Over the last twelve months, $82,000 was deposited into the account and can be traced to the gambling operation. Although not received from the gaming operators directly, the $82,000 was transferred into[REDACTED\]***7603 from[REDACTED\]***5591, which contained only tainted funds. (An analysis of [REDACTED\]***5591 is reproduced earlier in this affidavit.) Accordingly, up to $82,000 from[REDACTED\]***7603 is subject to forfeiture as proceeds as an SUA under 18 U.S.C. §§ 981(a)(1)(C) and 984 (one year deposits).

xi. Account # 110 -[REDACTED\] Five Star Bank account ***7280

144. [REDACTED\] Five Star Bank Account ***7280 ([REDACTED\]***7280) was an account funded with illicit gaming proceeds. From January 12, 2012 to June 30, 2014 the primary source of money into [REDACTED\]***7280 was through check and wire transfers from[REDACTED\]***4862, CSS***4920 and [REDACTED\]***7607, front-line accounts which received deposits directly form Internet gaming cafés and benevolent organizations offering gaming. Based on the review, SA Lamb believes that the deposits into [REDACTED\]***7280 consisted solely of SUA proceeds transferred to this account from front-line accounts. As to June 30, 2014, the account held a balance of $29,867.35.

[REDACTED\]

Forfeiture Theory: Direct Tracing of SUA Deposits under 18 U.S.C. § 981(a)(1)(C) within one (1) year from the date of this affidavit as fungible property under 18 U.S.C. § 984

146. Over the last twelve months, $42,000 was deposited into the account and believed to be traceable to the illegal gambling operation. Although these deposits are not from the gaming operators directly, the proceeds were transferred shortly after deposit from [REDACTED\]***4862 and [REDACTED\]***4920 and other accounts containing only tainted funds. Accordingly, up to $42,000 from [REDACTED\]***7280 is subject to forfeiture as proceeds of an SUA under 18 U.S.C. §§ 981(a)(1)(C) and 984 (one year deposits).

Forfeiture Theory: Direct Tracing of SUA Proceeds under 18 U.S.C. § 981(a)(1)(C)

147. Banking records were analyzed for[REDACTED\]***7280 between the period of May 1, 2014 and June 30, 2014 using a GIFO analysis. Applying 18 U.S.C. § 981(a)(1)(C), $29,867.35 of the remaining proceeds in account[REDACTED\]***7280 as of June 30, 2014 are subject to forfeiture.

xii. Account # 12 - Capital Sweepstakes Systems, Inc., Five Star Bank Account ***0524

148. Capital Sweepstakes Systems, Inc., Five Star Bank Account ***0524 (CSS***0524) was an account funded with the illicit proceeds from gaming devices. From February 12, 2014 to June 30, 2014 CSS***0524 primarily received deposits from [REDACTED\]***5591 and [REDACTED\] SA Lamb believes that the deposits into CSS***0524 consist entirely of SUA proceeds, based on the deposit relationship with a front-line account and direct deposits from [REDACTED\] a gaming business.

Forfeiture Theory: Direct Tracing of SUA Deposits under 18 U.S.C. § 981(a)(1)(C) within one year from the date of this affidavit as fungible property under 18 U.S.C. § 984

149. From February 12, 2014 through June 30, 2014, a period of time within the twelve-month framework of section 984, $41,509.22 was deposited into the account from the tainted [REDACTED\]***5591 account and Internet café's. Accordingly, up to $41,509.22 from CSS***0524 is subject to forfeiture as proceeds of an SUA under 18 U.S.C. §§ 981(a)(1)(C) and 984 (one year deposits).

Forfeiture Theory: Direct Tracing of SUA Proceeds under 18 U.S.C. § 981(a)(1)(C)

150. Banking records were analyzed for CSS***0524 between the period of April 1, 2014 and June 30, 2014 using a GIFO analysis. Applying 18 U.S.C. § 981(a)(1)(C), $22,814.51 of the remaining proceeds in account CSS***0524 as of June 30, 2014 are subject to forfeiture

xiii. Account #13 —[REDACTED\] Nevada State Bank Account ***3150

151. [REDACTED\] Nevada State Bank account***3150 [REDACTED\]***3150) was funded with the illicit proceeds from the gaming operation through transfers from [REDACTED\]***5591, one of the scheme's primary flow-through accounts. Specifically, from August 1, 2013 to July 31, 2014, the only source of deposits to [REDACTED\]***3150 were through check and wire transfers from [REDACTED\]***5591. Based on the review, SA Lamb believes that all of the deposits transacted through this account during the time period above consisted of SUA proceeds. As of July 31, 2014, the account held a balance of $160,170.51. Once the funds were placed into [REDACTED\]***3150, they were quickly transferred to other accounts held by the owners of the Capital Entities, including Kevin FREELS and an account held by Kevin FREELS entitled [REDACTED\].

[REDACTED\]

Forfeiture Theory: Direct Tracing of SUA Deposits under 18 U.S.C. § 981(a)(1)(C) within one year from the date of this affidavit as fungible property under 18 U.S.C. § 984

153. Over the last twelve months, $3,205,375 was deposited into the account and believed to be traceable to the gambling operation. Although these deposits are not from the gaming operators directly, the $3,205,375 was transferred to [REDACTED\]***3150 exclusively from [REDACTED\]***5591, which contained only tainted funds. Accordingly, up to $3,205,375 from [REDACTED\]***3150 is subject to forfeiture as proceeds of an SUA under 18 U.S.C. §§ 981(a)(1)(C) and 984 (one year deposits).

Forfeiture Theory: Direct Tracing of SUA Proceeds under 18 U.S.C. § 981(a)(1)(C)

154. Banking records were analyzed for [REDACTED\]***3150 between the period of August 1, 2013 and July 31, 2014. A GIFO analysis was conducted for the account and all funds on account, as of July 31, 2014, were found to be traceable to the illegal gaming operation. Applying 18 U.S.C. § 981(a)(1)(C), all funds in account [REDACTED\]***3150 as of July 31, 2014 are subject to forfeiture. As of that date, [REDACTED\]***3150 carried a balance of $160,170.51.

xiv. Account #14—[REDACTED\] Nevada State Bank Account ***0904

155. [REDACTED\] Nevada State Bank account ***0904 ([REDACTED\]***0904) was funded with the illicit proceeds through a single transfer from [REDACTED\]***5591. Banking records were analyzed for [REDACTED\]***0904 from August 1, 2013 to July 31, 2014. The only deposit into [REDACTED\]***0904 was a cashier's check from [REDACTED\]***5591 for $400,000 on August 1, 2013, that was split, with $375,000 into [REDACTED\]***0904 and $25,000 into CSS***3150. Based on the review of the entire account history and the $400,000 transaction, SA Lamb believes that the entire account consists of SUA proceeds. As of July 31, 2014, the account held a balance of $8,740.86. Once the funds were placed into [REDACTED\]***0904, they were transferred to [REDACTED\]***3150 and to Kevin FREELS for deposit into his Merrill Lynch account.

[REDACTED\]

[REDACTED\]

Forfeiture Theory; Direct Tracing of SUA Proceeds under 18 U.S.C. § 981(a)(1)(C)

157. Banking records were analyzed for [REDACTED\]***0904 from August 1, 2013 to July 31, 2014. A GIFO analysis was conducted for the account and all funds on account, as of July 31, 2014, were found to be traceable to the illegal gaming operation. Applying 18 U.S.C. § 981(a)(1)(C), all remaining proceeds in account [REDACTED\]***0904, as of July 31, 2014, are subject to forfeiture. As of that date, [REDACTED\]***0904 carried a balance of $8,740.56.

xv. Account # 15 — [REDACTED\] Nevada State Bank account ***3143

158. [REDACTED\] Nevada State Bank Account ***3143 ([REDACTED\]***3143") was funded with the illicit proceeds from the gaming operation. Similar to the previous account, [REDACTED\]***3143 was funded entirely through a single transfer from [REDACTED\]***5591.

159. Banking records were analyzed for [REDACTED\]***3143 from July 1, 2014 to July 31, 2014. The only deposit into the account was a check from [REDACTED\]***5591 for $189,934.04 on July 15, 2014. The funds from [REDACTED\]***5591 are traceable to other accounts involved in the operation of illegal gaming devices. Based on the review, SA Lamb believes that the sole deposit into this account consisted of SUA proceeds transmitted through [REDACTED\]***5591 and then to [REDACTED\]***3143. As of July 31, 2014, the account held a balance of $189,924.04.

[REDACTED\]

Forfeiture Theory: Direct Tracing of SUA Deposits under 18 U.S.C. § 981(a)(1)(C) within one year from the date of this affidavit as fungible property under 18 U.S.C. § 984

161. In a review of transactions into the account over the last twelve months, only the deposit of $189,934.04 from [REDACTED\]***5591 on July 15, 2014 was made into the account. Accordingly, $189,934.04 from [REDACTED\]***3143 is subject to forfeiture as proceeds of an SUA under 18 U.S.C. §§ 981(a)(1)(C) and 984 (one year).

Forfeiture Theory: Direct Tracing of SUA Proceeds under 18 U.S.C. § 981(a)(1)(C)

162. Banking records were analyzed for [REDACTED\]***3143 from July 1, 2014 to July 31, 2014. A GIFO analysis was conducted for the account and all funds, as of July 31, 2014, were found to be traceable to the illegal gaming operation. Applying 18 U.S.C. § 981(a)(1)(C), the remaining proceeds in account [REDACTED\]***3143 as of July 31, 2014 are subject to forfeiture. As of that date, [REDACTED\]***3143 had a slightly reduced balance of $189,924.04 due to bank fees.

xvi. Account #16 —[REDACTED\] Wells Fargo Bank Account ***7229

163. [REDACTED\] Wells Fargo Bank account ***7229 ([REDACTED\]***7229) was funded with the illicit proceeds from the gaming operation through transfers from [REDACTED\]***5591. Banking records were analyzed for [REDACTED\]***7229 from May 1, 2008 to July 15, 2014, and [REDACTED\]***5591 received mostly cash deposits and periodic deposits from [REDACTED\]***5591. As of June 30, 2014, the account held a balance of $9,951.58.

[REDACTED\]

Forfeiture Theory: Direct Tracing of SUA Deposits under 18 U.S.C. § 981(a)(1)(C) within one year from the date of this affidavit as fungible property under 18 U.S.C. § 984

165. In a review of transactions into the account over the last twelve months, $219,934 was deposited into the account from gambling operations. Although these deposits are not from the gaming operators directly, the proceeds were transferred from [REDACTED\]***5591, a tainted account as described herein. Accordingly, $219,934.04 from [REDACTED\]***7229 is subject to forfeiture as proceeds of an SUA under 18 U.S.C. §§ 981(a)(1)(C) and 984 (one year).

Forfeiture Theory: Direct Tracing of SUA Proceeds under 18 U.S.C. § 981(a)(1)(C)

166. Banking records were analyzed for [REDACTED\]***7229 between the period of November 1, 2013 and June 30, 2014. A GIFO analysis was conducted for the account and as of June 30, 2014, $9,951.58 was found to be traceable to the illegal gaming operation. Applying 18 U.S.C. § 981(a)(1)(C), $9,951.58 on deposit in account [REDACTED\]***7229 as of June 30, 2014 is subject to forfeiture.

D. END USER ACCOUNTS

167. The End User Accounts consist of individual and entity accounts, all of which are under the control Capital Entities' owners. These accounts are funded primarily through Holding Accounts, but did receive minimal funds from the Primary Deposit and Flow-Through Accounts. [REDACTED\]

[REDACTED\]

xvii. Account #17 —[REDACTED\] Wells Fargo Bank account ***3247

168. [REDACTED\], Wells Fargo Bank account ***3247 ([REDACTED\]***3247") was an account funded by numerous tainted accounts, including [REDACTED\]***3150 and [REDACTED\]***7603, pass-through accounts containing illicit gaming proceeds. Banking records were analyzed for [REDACTED\]***3247 from April 1, 2007 to July 24, 2014. The primary source of the deposited items into the account were through check and wire transfers from [REDACTED\]***3150. Based on the review, SA Lamb believes that the deposits into [REDACTED\]***3247 consisted of SUA proceeds transferred from other Capital Entities' accounts.

[REDACTED\]

Forfeiture Theory: Direct Tracing of SUA Deposits under 18 U.S.C. § 981(a)(1)(C) within one year from the date of this affidavit as fungible property under 18 U.S.C. § 984

170. Over the last twelve months, $1,397,462 was deposited into the account and believed to be traceable to the gaming operation. Specifically, all deposits from October 13, 2013 through July 24, 2014 were reviewed and can be traced to the tainted [REDACTED\]***3150 account. Accordingly, $1,397,462 from [REDACTED\]***3247 is subject to forfeiture as proceeds of an SUA under 18 U.S.C. §§ 981(a)(1)(C) and 984 (one year).

Forfeiture Theory: Direct Tracing of SUA Proceeds under 18 U.S.C. § 981(a)(1)(C)

171. Banking records were analyze for [REDACTED\]***3247 between the period of July 13, 2012 and July 24, 2014 using a GIFO analysis. Applying 18 U.S.C. § 981(a)(1)(C), § 1,488,850.95 of the funds in account [REDACTED\]***3247 as of July 24, 2014 are subject to forfeiture.

xviii. Account# 18-Kevin Freels and [REDACTED\]***4618 Merrill Lynch account

172. Kevin Freels [REDACTED\] Merrill Lynch account ***4618 (KF[REDACTED\]***4618) was funded with he illicit proceeds from the gaming operation, including [REDACTED\]***7603 and The funds received from [REDACTED\]***7603 were transferred after August 2, 2012 and are not associated with the [REDACTED\]

173. Banking records were analyzed for KF[REDACTED\]***4618 from October 1, 2010 to July 31, 2014. The primary source of the deposited items into the account were check and wire transfers from [REDACTED\]***7603 and [REDACTED\]***3150, tainted accounts funded from illegal gaming deposits.

Forfeiture Theory: Direct Tracing of SUA Deposits under Title 18 U.S.C. § 981(a)(1)(C) within one year from the data of this affidavit as fungible property under 18 U.S.C. § 984

175. Over the last twelve months, $1,386,108.44 was deposited into the account and believed to be traceable to the illicit gaming operation. Although these deposits are not from the gaming operators directly, most of the proceeds were transferred from [REDACTED\]***7603 and [REDACTED\]***3150, which contained only tainted funds. A further review of the deposits from October 15, 2013 through July 31, 2014 revealed deposits from [REDACTED\]***3150 and [REDACTED\]***7280, also tainted accounts. Accordingly, $1,386, 108.44 from KF[REDACTED\]***4618 is subject to forfeiture as proceeds of an SUA under 18 U.S.C. §§ 981(a)(1)(C) and 984 (one year).

Forfeiture Theory: Direct Tracing of SUA Deposits under 18 U.S.C. § 981(a)(1)(C)

176. Banking records were analyzed of KF[REDACTED\]***4618 from March 31, 2012 to June 30, 2014. As to June 30, 2014, only $233.74 in untainted funds remained into account with a balance of $1,201,812.27. Applying 18 U.S.C. § 981(a)(1(C), $1,201, 578.53 of the remaining proceeds is account KF[REDACTED\]***4618 as of June 30, 2014 are subject to forfeiture.

xix. Account #19-[REDACTED\] Wells Fargo Bank account ***2466

177.[REDACTED\] Wells Fargo Bank account ***2466([REDACTED\]***2466") was funded with the illicit proceeds from the gaming operation. [REDACTED\]***2466 was heavily but not exclusively funded with account such as [REDACTED\]***5591, [REDACTED\]***3150 and [REDACTED\]***7280.

178. Banking records were analyzed for [REDACTED\]***2466 between the period of January 1, 2011 and July 30, 2014. The account received cash deposits, investement-related deposits, and rental income. However, the largest deposits into the account were derived from accounts tainted in the gaming scheme, including [REDACTED\]***5591, [REDACTED\]***3150 and [REDACTED\]***7280. As of July 30, 2014, the account held a balance of $301,787.84. Once the funds wee placed into [REDACTED\]***2466, they were used for personal living expenses.

Forfeiture Theory: Direct Tracing of SUA Deposits under Title 18 U.S.C. § 981(a)(1)(C) within one year from the data of this affidavit as fungible property under 18 U.S.C. § 984

180. Over the last twelve months, $1,011,645.97 was deposited into the account and believed to be traceable to the gambling operation. Although these deposits are not from the gaming operators directly, the proceeds were transferred after deposit from [REDACTED\]***5591, [REDACTED\]***3150 and [REDACTED\]***7280, which contained tainted funds. Accordingly, $1,011,645.97 from [REDACTED\]*** 2466 is subject to forfeiture as proceeds of an SUA under 18 U.S.C. §§ 981(a)(1)(C) and 984 (one year).

Forfeiture Theory: Direct Tracing of SUA Deposits under 18 U.S.C. § 981(a)(1)(C)

181. Banking records were analyzed for [REDACTED\]***2466 from January 3, 2014 to July 30, 2014, A GIFO analysis was conducted for the account and all of the funds on account as of July 31, 2014, $301, 787.84, are traceable to the illegal gaming operation. Applying 18 U.S.C. § 981(a)(1)(C), $301, 787.84 in account [REDACTED\]***2466 as of July 30, 2014 is subject to forfeiture.

xix. Account #20-[REDACTED\] Wells Fargo Bank account ***0017

182. [REDACTED\] Wells Fargo Bank account ***0017 [REDACTED\]***0017) was funded with the illicit proceeds from the gaming operation. [REDACTED\]***0017 was heavily but not exclusively funded form accounts such as [REDACTED\]***3247 and [REDACTED\]***7280.

183. Banking records wear analyzed for [REDACTED\]***0017 from January 1, 2011 to July 31, 2014. The account received cash deposits and deposits from investments, rental income and a real property transaction. However, the largest deposits into the account were derived from accounts tainted in the gaming scheme — [REDACTED\]***3247 and [REDACTED\]***7280. As of July 31, 2014 the account held a balance of $82,794.10. Once the funds were deposited in [REDACTED\]***0017, they wear used for personal living expense.

Forfeiture Theory: Direct Tracing of SUA Deposits under Title 18 U.S.C. § 981(a)(1)(C) within year from the data of this affidavit as fungible property under 18 U.S.C. § 984

185. Over the last twelve months, $115,000 was deposited into the account and traceable to the gambling operation. Although these deposits are not from the gaming operations directly, the proceeds were transferred shortly after deposit from [REDACTED\]***3247 and [REDACTED\]***7280, which contained only tainted funds. Accordingly, $115,000 from [REDACTED\]***0017 is subject to forfeiture as proceeds of an SUA under 18 U.S.C. § 981(a)(1)(C) and 984 (one year).

Forfeiture Theory: Direct Tracing of SUA Deposits under 18 U.S.C. § 981(a)(1)(C)

186. Banking records were analyzed for [REDACTED\]***0017 from April 1, 2014 to July 31, 2014 Cash deposits were treated as clean funds. A GIFO analysis was conducted for the account and as of July 31, 2014, $78,934.31 was found to be traceable to the illegal gaming operation. Applying 18 U.S.C. § 981(a)(1)(C), $78,934.31 of $82,794.10 in account [REDACTED\]***0017 as of July 31, 2014 is subject to forfeiture.

xix. Account #201-[REDACTED\] Kevin Freels, Wells Fargo Bank account ***8108

187. [REDACTED\]Kevin Freels, Wells Bank account ***8101 ([REDACTED\]KF***8108) was funded with the illicit proceeds from the gaming operation. Banking records were analyzed for [REDACTED\]KF***8108 from January 1, 2007 to July 15, 2014. The account was operated as a persona account, but did receive a tainted deposit of $35,000 from [REDACTED\]***0017. As of July 15, 2014, the account held a balance of $29,805.91. Once the funds were placed into [REDACTED\]KF***8108, they were used for personal living expenses.

Forfeiture Theory: Direct Tracing of SUA Deposits under Title 18 U.S.C. § 981(a)(1)(C) within one year from the data of this affidavit as fungible property under 18 U.S.C. § 984

188. Over the last twelve months, $35,000 was deposited into [REDACTED\]KF***8108 from [REDACTED\]***0017 and believed to be traceable to the gambling operation. Although these deposits are not from the gaming operators directly, the proceeds were transferred through a circuitous route from accounts which were tainted. Accordingly, $35,000 from [REDACTED\]KF***8108 is subject to forfeiture as proceeds of an SUA under 18 U.S.C. §§ 981(a)(1)(C) 984 (one year).

Forfeiture Theory: Direct Tracing of SUA Proceeds under 18 U.S.C. § 981(a)(1)(C)

189. Banking records were analysis for [REDACTED\]KF***8108 between the period of February 18, 2014 and July 15, 2014. A GIFO analysis was conducted for the account and all funds on account as of July 15, 2014, $29,805.91, were found to be traceable to the illegal gaming operation. Applying 18 U.S.C. § 981(a)(1)(C), $29,805.91 in account[REDACTED\]KF***8108 as of July 15, 2014 is subject to forfeiture.

XI. SEIZURE INFORMATION

190. Although many accounts are subject to forfeiture under each theory presented, some are subject under only one, two or even no theories outlines. In summary below, a chart is provided which identifies the accounts above and forfeiture theory if applicable and amount subject to forfeiture:

XII. CONCLUSION

191. Based on all of the facts and circumstances described in this affidavit for search warrant, along with my training, experience, and consultations with others, there is probable cause to believe that the items described in Attachments B-1 and B-2 are currently located at the premises knows as described in Attachments A-1 and A-2 and that those items constitute evidence, fruits and/or instrumentalities of violations of 18 U.S.C. § 371 (conspiracy to commit offenses against the United States); 18 U.S.C. § 1955 (operation of an illegal gambling business);[REDACTED\]

[REDACTED\] I believe probable cause exists the companies described as the Capital Entities, through the owners and employee of these companies, conspired with separate business owners to provide equipment for, train employees to operate, and maintain the equipment for these separate business in retune for a percentage of the profits in the state of California[REDACTED\]

XII. REQUEST FOR SEALING

192. Because this investigation is ongoing, disclosure of the search warrant, this affidavit and the application could jeopardize the progress of the investigation and cause suspects to destroy evidence or impede the progress of additional investigation. Accordingly, I request that the Court issue an order that the search and seizure warrants, this affidavit in support of the application for the search and seizure warrants, and the applications for search and seizure warrants be filed under seal until further court order.