A Portland man was sentenced Tuesday to 15 months in federal prison for running what was believed to be Maine’s largest gambling operation.
In May, Stephen Mardigan pleaded guilty in U.S. District Court in Portland to unlawful gambling, money laundering and filing a false tax return. The federal prosecutor asked for a sentence of 21 months, while the defense team requested no prison time, only probation.
At the sentencing Tuesday, Chief Judge Jon Levy said he believed Mardigan was remorseful and would not reoffend. But he also said he believed the crimes were too serious to avoid incarceration. As he explained his decision, Levy also referenced William Flynn, whom he sentenced in October to two years of probation for his role in the gambling operation.
“Whether lawful gambling is a good or bad thing is not a policy question for a judge to decide,” Levy said. “That’s for others to decide, but unlawful gambling is another matter entirely. It’s done in secret. It begets money laundering, as was the case here. It begets tax evasion, as was the case here. And it can ruin lives, as it has clearly done to Mr. Flynn and Mr. Mardigan.”
Mardigan, 62, addressed the court Tuesday in a brief and tearful statement. He apologized to his friends and family, pausing frequently to wipe his eyes or take a shaky breath.
In a longer letter to the judge, Mardigan described placing a $500 bet for the first time in his 30s while watching a football game with his friends. That was the beginning of his addiction to gambling, he said, and he later began holding bets for his friends.
“I now realize that I was out of control,” he wrote. “See, gamblers get a high that’s stimulating but tranquilizing at the same time. I lived for that. It was a gambling roller coaster. During the day I had business dealings, at night I had my gambling.”
Court documents show federal investigators wiretapped two phones on which Mardigan took bets beginning in March 2017. The next month, they seized nearly $850,000 in cash and jewelry from Mardigan and three other people. In May 2017, Mardigan admitted to running the illegal gambling operation out of his Baxter Boulevard home and his Portland used-car dealership since 2003.
Court documents show he took bets on sports games – college and pro basketball, college and pro football, baseball, professional hockey, stock car racing and golf tournaments. The documents say bets typically ranged from $30 to thousands of dollars, but two gamblers in particular wagered more than $4 million through Mardigan.
Federal prosecutors said Mardigan funneled his transactions through the bank account for Avenue Auto Sales, his used-car dealership on Forest Avenue. They said he also laundered money by using gambling profits to buy commercial and residential real estate. Court documents put the combined value of the 19 properties – ranging from a lot on Forest Avenue to waterfront homes in Cape Elizabeth – at $13 million. He also was convicted of failing to report his gambling income on his federal tax returns.
Under his plea agreement, Mardigan will pay back taxes of more than $1.3 million, which has grown to more than $3 million with fees and interest. He forfeited nearly $700,000 and most of his real estate holdings.
The maximum possible sentence for the three crimes was 28 years, which included 20 years for the most serious crime of money laundering. The judge said Tuesday that federal guidelines and mitigating factors dictated a sentence between 21 and 27 months.
Assistant U.S. Attorney David Joyce argued that prison time was appropriate in part because of the length of time that Mardigan organized the illegal betting – 14 years. The judge questioned the prosecutor on the difference between Mardigan and Flynn. Joyce answered that Flynn was older and in poor health, and evidence showed that he was second to Mardigan in the operation.
“Anything less than 21 months, I would suggest, is insufficient to deter this kind of conduct, to reflect the seriousness of the offense, to reflect the ongoing, continuous nature of the offense,” Joyce said.
Federal authorities have said they believe Mardigan ran the state’s largest illegal gambling operation. But the defense team, attorneys Bruce Merrill and J.P. DeGrinney, argued that its size and scope have been exaggerated, saying the dollar figures used by the government have not accounted for Mardigan’s own losses. Merrill also said Tuesday that most of Mardigan’s bettors were business people who could afford their wagers, and that gambling is a commonplace part of American society.
Leslie Poulin, Mardigan’s sister, told the judge that her brother has been “religiously” attending Gamblers Anonymous meetings since May. Charles Robinson, a forensic psychologist, said he had interviewed Mardigan and diagnosed him with gambling disorder. More than 50 people – family members, friends, business contacts and tenants – submitted letters of support for Mardigan.
His lawyers also noted the forfeited money and property, and said he also lost his automobile dealer’s license.
“At what point do you say, enough is enough?” Merrill said. “How much do you punish people?”
Mardigan was sentenced to 15 months for each of the three charges, but will serve the sentences concurrently. Family members in the courtroom gasped when Levy announced the penalty.
The judge said he would recommend a placement in Massachusetts so Mardigan could be close to his relatives and friends. Maine does not have a federal detention facility. It is not clear when Mardigan will begin serving his sentence.
At the end of the hearing, the judge spoke directly to Mardigan, encouraging him to continue to seek help for his gambling disorder and be a positive role model to other people in his life.
“The justice process doesn’t end today,” Levy said. “In some ways, it’s just beginning, and whether this whole thing will have been for naught or whether it will have been for good, it is now in your hands.”
The former car dealer gripped his fingers behind his back as he listened.
“I have a high degree of confidence that you have the capacity to make this a great success,” Levy said.
Megan Gray can be contacted at 791-6327 or at:
mgray@pressherald.com
Twitter: mainemegan
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