By JOHN CANIGLIA and JOEL RUTCHICK
PLAIN DEALER REPORTERS
  
Minutes after an Ohio Lottery official picked three plastic balls numbered 5-8-3 last night, a carload of federal agents pulled up in front of a small shop on E. 105th St. at its busiest time of day.

The agents rushed in to Tune Palace, looking for evidence of what they believe is a sophisticated, $10 million-a-year betting ring based on the official televised state drawing.

The Cleveland shop was one of about a dozen businesses or homes raided in a probe that targets illegal gambling, which competes with the struggling Ohio Lottery and allegedly involves millions of dollars of untaxed profits.

FBI spokesman Robert L. Hawk said agents from the FBI and IRS conducted raids in Cleveland, Akron, Beachwood, Lakewood, Warrensville Heights and Seven Hills. Hawk refused to reveal the exact location of the searches. He also would not say what agents were searching for or the nature of the crimes being investigated.

IRS spokeswoman Denise Dolesh also declined to discuss the raids.

It was learned, however, that the investigation is focused on an illegal numbers lottery linked to longtime gambling figure Virgil Ogletree, 78, of Beachwood, once a close friend of boxing promoter and former Cleveland numbers operator Don King.

Authorities are looking at possible money laundering, gambling and tax evasion. No one was charged last night, but agents carted off boxes of suspected gambling records from several locations, including an apartment above a bar on Broadway.

The numbers writers received hundreds of calls each night just between 6:30 and 7:20 p.m., sources said, and also took in hundreds of bets right before the Ohio Lottery's first drawing of the day at 12:30 p.m.

The group needed to use computers to sort out the information, as bets were coming in so quickly. But on Sundays, when the Ohio Lottery game isn’t played, the phone lines were hardly touched.

The attraction of the illegal numbers game is the payoff. The Ohio Lottery pays about $500 for a winning $1 ticket for its Pick Three game. But the payoff on the illegal game is as much as $750 for a $1 bet.

The raids come when the Ohio Lottery has seen its profits drop in recent years, and law enforcement officials say one reason is the growth of charitable instant bingo games and illegal numbers operations.

Ogletree is suspected of owning one numbers operation that has ties to others, including one in Akron. He could not be reached for comment last night.

Tune Palace is operated by Mary Stover, who in 1993 was convicted of federal gambling charges linked to a numbers operation controlled by associates of the Pittsburgh Mafia family.

Stover could not be reached for comment. An employee at the business declined to comment after federal agents left after more than two hours. Agents carried out three boxes from the business.

In 1991, Cleveland police Detective James L. Lynsky said in a search warrant affidavit that Stover had taken over the gambling business of longtime bookmaker Raymond "Grey Dad" Crawford, who had hired Stover. She then ran the business out of Tune Palace, according to the affidavit.

Two years later, U.S. District Judge John M. Manos sentenced Stover to three years’ probation.

Stover allegedly has used the Ohio Lottery machine at Tune Palace to accept "layoff bets" from numbers operators.

Numbers organizations use "layoffs" to hedge their bets by placing outside wagers on the same numbers that are played heavily so that the potential payouts would be offset by winnings from the Ohio Lottery.

Ogletree was sentenced in 1992 to three to 15 years in prison for selling 2 ounces of cocaine to an undercover agent of the U.S. Drug Enforcement Administration. At the time of his sentence, the DEA said Ogletree had been associated with illegal gambling and loan sharking for more than 40 years.

A year earlier, Sports Illustrated and USA Today reported that Ogletree was linked to boxing promoter King, who ran a gambling operation in Cleveland years ago.

Ogletree was sentenced to five years in prison for his involvement in a gambling game in Atlanta in 1976.

Plain Dealer reporter Ebony Reed contributed to this article.

E-mail: jcaniglia@plaind.com
Phone: 216-999-4128
E-mail: jrutchick@plaind.com
Phone: 216-999-4829