For Immediate Release - January 04, 2012

Chicopee Internet Cafe Owner, Business Partner and Corporation Arraigned for Operating an Illegal Slot Parlor

SPRINGFIELD - The owner of “Cafeno’s” Internet café in Chicopee, his business partner, and their corporation have been arraigned on charges of operating an illegal slot parlor, Attorney General Martha Coakley announced today.  

Steven Sheldon, 48, of Westfield, and his business partner Stephen Megliola, 42, of Longmeadow, were arraigned today in Hampden Superior Court on charges of organizing or promoting gambling services and operating an illegal lottery.  Sheldon was also arraigned on charges of allowing lotteries in a building and the sale and advertising of lottery tickets.  Their corporation, Cafeno’s Inc., faces the same charges. 

Under Massachusetts law, it is illegal to run or promote a gambling operation.  The current gambling law in this case points to the existence of an illegal “lottery.”  The definition of a lottery includes a payment to play, a prize, and some element of chance.

In September 2010, the Attorney General’s Office began an investigation into “Cafeno’s” in Chicopee.  Evidence gathered during the course of the investigation demonstrates that patrons of this Internet café were paying nearly exclusively for the right to gamble.  Authorities allege that patrons were not, as suggested by the operator, simply paying for Internet time and playing a free sweepstakes.  Investigators also allege that “no purchase required” opportunities were trivial and insignificant and gambling was the only clear purpose for these cafés.  “Cafeno’s” ceased operation in March 2011.

A Special Statewide Grand Jury returned indictments against these defendants on November 10, 2011.  Today, both defendants were individually arraigned in Hampden Superior Court where each pleaded not guilty and were released on personal recognizance.  Judge Jeffrey Kinder presided over the arraignment.  The defendants are expected back in court on May 18, 2012 for a pre-trial hearing. These charges are allegations, and the defendants are presumed innocent until proven guilty.         

Today’s action by the Attorney General’s Office is a direct result of complaints regarding alleged unlawful gambling operations that have recently opened for business across the Commonwealth.  While these businesses purport to sell goods or services, such as Internet access or phone cards, the Attorney General’s investigation found that those sales were a pretext for unlawful and unregulated lotteries, online slot parlors, sweepstakes, and similar gambling.

In June, The AG’s office issued permanent civil regulations under the Massachusetts Consumer Protection Act that bans the operation of so called “Internet Cafés” and other establishments across the Commonwealth.  Those that violate the civil regulations may be subject to injunctions, civil penalties and other relief under the Consumer Protection Act.

In July, House Speaker Robert DeLeo and AG Coakley filed legislation that further enhances the criminal penalties for illegal gambling at “cyber cafés” throughout Massachusetts.  The proposed legislation establishes a new crime for conducting or promoting an unauthorized sweepstakes that is executed through the use of the entertaining display of an electronic machine. The new crime would carry a penalty of up to $250,000 per offending machine and/or imprisonment of up to 15 years in the state prison.

In October, a Statewide Grand Jury indicted the owners of two “Leo’s Place” Internet cafés in Fall River and Fairhaven on charges of running an illegal slot parlor.  The corporation and three other individuals were also indicted on similar gambling charges.  These defendants were arraigned in Bristol Superior Court on December 13, 2011. 

The Attorney General’s investigations into various Internet cafés throughout the Commonwealth remains ongoing.

The case is being prosecuted by Assistant Attorneys General Thomas Ralph and Timothy Wyse of the AG’s Cyber Crime Division, and AAG Lee Hettinger, Chief of the Western Massachusetts Regional Office.  The Attorney General’s Computer Forensic Laboratory, Senior Financial Investigator Mark Pulli, and State Police assigned to the Attorney General’s Office all assisted in the investigation. 

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