Illegal Gambling Operator Imprisoned for $2M Theft from US Army

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Posted on: March 9, 2023, 03:38h. 

Last updated on: March 9, 2023, 03:38h.

An illegal gambling operator from Corpus Christi, Texas, has been sentenced to 27 months in prison for the theft of more than $2 million worth of sensitive military equipment from the US Army.

Nathan Nichols, Corpus Christi, Texas
Nathan Nichols, above, planned to sell $2.1 million in stolen military equipment on eBay. (Image: 3 News)

Nathan Nichols, 46, ran two drinking establishments in his hometown, Theo’s Bar and Lady Luck. Authorities believe they housed illegal sweepstakes machines, known as 8-liners.

The machines are so named because of their eight paylines. They are nominally legal in Texas when they offer tickets that can be redeemed for merchandise as prizes.

But Nichols’ customers placed bets before each spin and received winnings in cash, making them illegal, according to prosecutors.

Equipment Stash

Meanwhile, 200 miles away, the US Army was investigating the theft of high-tech gear from its base at Fort Hood. On June 17, 2021, they had discovered that locks had been cut on 17 shipping containers at the base. A subsequent audit revealed that 137 items were missing.

But when one of the items, a thermal scope, turned up on eBay for $4,500, the trail led straight to the seller, Nichols. The bar owner had other items listed for sale that matched the serial numbers of the stolen equipment.

While raids on the two bars turned up the expected gambling machines, at Nichol’s residence investigators found an array of laser range finders, thermal scopes, night-vision scopes, laser aiming devices, and more than 100 night-vision goggles.

The court heard that the items had been stolen from the base by two army veterans, Jessica Elaintrell Smith and Brandon Dominic Brown.

Smith pleaded guilty to one count of conspiracy to defraud the US government in April 2022 and was sentenced to 18 months in prison, followed by two years of post-release supervision. She was also ordered to pay just under $1.3 million in restitution to the US Army.

Brown also pleaded guilty and was sentenced to three years’ probation, plus a $1.3 million fine. He was less culpable, because he only took part in one raid on the shipping containers, whereas Smith was involved in two.

Nichols Confession

Nichols pleaded guilty in March 2022 to conducting an illegal gambling business and conspiring to steal government property.

As part of his guilty plea, he agreed to forfeit a total of $2,185,218.73 and will remain in custody pending transfer to a US Bureau of Prisons facility to be determined in the near future.

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