SALT LAKE CITY — A convicted Utah fraudster faces new criminal charges for an alleged sports betting scam that federal authorities say he devised while serving time in a halfway house.
Christopher D. Hales, 39, of Lehi, was convicted of bank fraud in 2011 as a part of a mortgage fraud case. He was sentenced to 90 months in federal prison and ordered to pay $12.7 million in restitution.
Shortly after gaining an early release in 2016 for completing a drug treatment program, prosecutors say Hales, who had promised to repay his victims, spent $200,000 at a Nevada casino. The violation of his supervised release sent him back to prison. He was released to a halfway house in Salt Lake City in 2018.
Prosecutor say records show he and another person formed a company in Nevada called Sindakit Software two days before his release from the halfway house later that year.
Hales claimed he owned sports betting software to “beat the house” to convince investors to give him money to place bets, according to a felony information filed in U.S. District Court. He told investors the money would be used to place sports bets but nearly all of the $7 million he took in went to his and his associate’s personal use.
Hales told investors he would match their funds, when in reality he took out a line of credit with a sports betting website and used the line of credit to hedge bets, according to the information.
Hales told investors that the sports betting software was producing a 10% rate of return per week. He also said that there were potential buyers for the software for tens of millions of dollars, when there were actually no buyers, the information says.
Hales, who authorities say used the name Chris Christian, failed to tell investors that he did not actually own an algorithm or sports betting software and that they were laundering money through the Sindakit Software account, according to the information.
Hales faces charges of wire fraud and money laundering. He is scheduled for a change of plea hearing in federal court next week.