MONROE — Two Sylvania men accused of running an illegal Internet sweepstakes café in Bedford Township are due in court this week, authorities said.
Jerrold Jaffe, 66, and his nephew, Jacob Jaffe, 30, are scheduled for a pretrial hearing Wednesday in Monroe District Court, with a preliminary examination set for Thursday, according to the court’s clerk’s office. They were each arraigned June 14 on a charge of conducting gambling operations without a license, and released after posting a $10,000 personal recognizance bond.
The felony charges carry a maximum penalty of 10 years in prison, according to the criminal complaints, which were filed against the suspects Sept. 27. The complaints state that the suspects conducted an illegal gambling operation at Lucky 7 Internet Cafe, 8525 Secor Rd.
Joy Yearout, a spokesman for Michigan Attorney General Bill Schuette’s office, said the Jaffes are the first alleged Internet sweepstakes café operators in Michigan to be criminally charged. The charges are part of a statewide sweep that closed 59 cafés across the state since it began a year ago, she said.
“Citizens should steer clear of Internet sweepstakes cafés that are nothing more than unregistered, illegal casinos,” Mr. Schuette said in a statement.
The Jaffes’ attorney Tim Churchill of Temperance said his clients “have never received the cease and desist order, which would be a more normal course in some other cases when they [the Attorney General's office] were threatening to go after some other operators of Internet cafes in Wayne and Ingham counties.”
“Basically, they were a legal business entity, they were paying their taxes and operating within what they thought were within the confines of the law for Internet cafés, as it is in Ohio where such businesses were grandfathered in and allowed to operate without fear of criminal prosecution,” Mr. Churchill said.
The older Mr. Jaffe owned the business and his nephew was his employee, Mr. Churchill said.
“I didn’t just go there and open it up. I checked with everybody from lawyers to township commissioners and trustees,” Jerrold Jaffe said.
“Over the two years of operations, I never had a notice from any official office that I was breaking the law,” Mr. Jaffe said. “They never gave me a chance or I would have shut it down immediately.”
Internet sweepstakes cafés are businesses that sell Internet access and the chance to play computer-based casino-style games where customers can win cash prizes.
In Ohio, a bill recently signed by Gov. John Kasich is designed to remove the profit motive from “sweepstakes” machines that critics argue look and act too much like slot machines. The law would prohibit cash payouts for the machines and limit non-cash prize values to no more than $10.
Café owners argue that the machines are not gambling but rather promotional tools to sell long-distance phone cards and Internet time, and have filed a petition to try to put a referendum on the November, 2014, election ballot.
Café operators and their patrons say they support regulation of the industry rather than what amounts to a ban on its existence.
A statewide moratorium on new Internet cafés in Ohio is set to expire in June.
Contact Mike Sigov at: email@example.com, 419-724-6089, or on Twitter @mikesigovblade.