A U.S. Army Special Forces soldier who helped capture the former president of Venezuela, Nicolás Maduro, pleaded not guilty on Tuesday to charges that he used classified information to make money on prediction markets about the ouster.
The soldier, Master Sgt. Gannon Ken Van Dyke, appeared briefly in a federal courtroom in Manhattan, where Judge Margaret M. Garnett upheld the bond conditions that had been set last week when he was arrested in North Carolina. Judge Garnett ordered him to return to court in June for a pretrial conference. Sergeant Van Dyke is still part of the military, his lawyer, Zach Intrater, said, but he is on leave. The soldier, wearing a dark suit, sat motionless during the hearing.
The sergeant is one of the highest profile U.S. government officials to have been accused of using classified information to bet on prediction markets, a concern that has led the White House to warn its staff to avoid insider trading. That warning came amid a surge of suspicious trading related to the war with Iran.
Legal gambling on everything from sports to political outcomes has boomed in recent years, as companies have made it easier than ever for people to wager, especially through apps on their phones. It has prompted the additional scrutiny of companies that run so-called prediction markets, which allow people to bet on a wide range of future events. The Senate and House are considering legislation to limit government officials’ use of one popular site, Kalshi, and states are also considering stronger regulations.
Sergeant Van Dyke faces years in prison if convicted of any of the five counts he faces, including the unlawful use of confidential government information for personal gain and theft of nonpublic government information. In a 14-page indictment, prosecutors say Sergeant Van Dyke used sensitive material he had access to as part of the mission to oust Mr. Maduro to place $33,934 in bets on the prediction market site Polymarket.
The wagers, which were placed from Dec. 27 to Jan. 2, made Sergeant Van Dyke over $400,000, according to prosecutors and an unsealed indictment.
At a news conference on the steps of the courthouse, Sergeant Van Dyke’s legal team denied the charges, painting him as an “American Hero” who was innocent and improperly charged.
“What people have to understand about this young man is that he has spent virtually 98 percent of his adult life serving this country in an exemplary manner,” said Mark Geragos, one of the sergeant’s attorneys. “He has reached the apex of that service, and with any luck we will return him quickly to where he belongs, which is protecting the world, frankly, from all kinds of threats.”
Sergeant Van Dyke was not present at the news conference. He wore a pair of tinted black Ray-Bans and avoided questions from reporters as he left the federal court building through a side door.
While the proceeding was short, attorneys for Sergeant Van Dyke said they would challenge the “core” nature of the indictment. Bets placed on prediction markets fall into a gray area, and in recent weeks, legislators have scrambled to set guardrails on the industry after a series of concerning bets.
“This case will largely rise and fall on those motions, as you said your honor, this is an unusual case,” Mr. Intrater said.
Sergeant Van Dyke’s bond conditions include surrendering his passport, any firearms or explosives, and refraining from excessive alcohol consumption. He was released on a $250,000 personal recognizance bond and is due back in court on June 8.
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