11 Arrested in Crackdown on Online Gambling
By REUTERS
Reprinted courtesy of the New York Times

The owners of three of the largest Internet poker companies operating in the United States were accused Friday of tricking regulators and banks into processing billions of dollars of illegal Internet gambling proceeds.

Eleven people including the owners of Full Tilt Poker, Absolute Poker and PokerStars were charged with violating anti-Internet gambling laws, according to charges filed by federal prosecutors in Manhattan.

Prosecutors also filed a civil money laundering complaint seeking to recover at least $3 billion from the companies, which are all based overseas, court documents said.

In addition, according to the government statement, restraining orders were issued against more than 75 bank accounts used by the poker companies and their payment processors. And the Internet domain names of the companies were also seized.

Representatives for the companies could not immediately be reached to comment on the charges.

Two of the men were arrested on Friday, one is expected to turn himself in to law enforcement and eight others are not in the United States, prosecutors said.

Raymond Bitar, 39, of Full Tilt Poker, and Isai Scheinberg, 64, of PokerStars, were charged with violating the Unlawful Internet Gambling Enforcement Act and other laws. Absolute Poker owners Brent Beckley, 31, and Scott Tom, 31, faced similar charges.

“These defendants, knowing full well that their business with U.S. customers and U.S. banks was illegal, tried to stack the deck,” Janice K. Fedarcyk, the head of the New York F.B.I. office, said in a statement. “They lied to banks about the true nature of their business. Then, some of the defendants found banks willing to flout the law for a fee.”

The criminal charges outlined a scheme by the company owners and some employees to direct the gambling profits to online shell companies that would appear legitimate to banks processing payments.

In one case, the government said, the companies tricked banks in processing billions of dollars by disguising the gambling proceeds as payments to nonexistent online merchants. At other times, the poker companies used “payment processors,” who obtained bank accounts and then lied about the source of their revenue.

And in a third instance, the government said, the poker companies persuaded a few small, struggling community banks to process the payments “in return for multimillion-dollar investments.”

The charges are part of a crackdown on Internet gambling in the United States, where it has been illegal since 2006.

In March, Wynn Resorts said that it had entered into a partnership with PokerStars, and that they would work for passage in the United States of legislation that would define illegal Internet gambling. Lawmakers have in the past tried to pass legislation legalizing Internet gambling in the hope of reaping billions in tax revenue.

Webmaster
StartCasino.com

Anyone in the business knows that Fulltilt and Pokerstars took advantage of the 2006 UIGEA law and the retraction of competitive poker sites. They knew the risks.

The article says they siezed domain names....they clearly have not. The sites are working.

If the government really wanted to knock down online gaming in the US, putting the bankers in jail would seal the coffin for sure. Not the gaming operators, but the bankers.

Partypoker and Microgaming clients must be patting themselves on the back now.

And for the US based conferences, I don't see anyone coming...its too similar to 2006.




Webmaster
StartCasino.com

The government has siezed the domains later that afternoon.

However, [www.fulltiltpoker.net] is still running as it is for 'educational purposes only.'

The site has an announcement:

Quote:

Full Tilt Poker.net™ Supports Poker Players And Its Chief Executive

Dublin Ireland (April 15, 2011) - Full Tilt Poker.net is saddened by today's charges against its CEO Raymond Bitar and offers its full support to Mr. Bitar and Nelson Burtnick.

Online poker is a game of skill enjoyed by tens of millions of people in the United States and across the world. And, Full Tilt Poker.net remains as committed as ever to preserving the rights of those players to play the game they love online.

Mr. Bitar and Full Tilt Poker.net believe online poker is legal - a position also taken by some of the best legal minds in the United States. Full Tilt Poker.net is, and has always been committed to preserving the integrity of the game and abiding by the law.

"I am surprised and disappointed by the government's decision to bring these charges. I look forward to Mr. Burtnick's and my exoneration", said Mr. Bitar.

Unfortunately, as a result of this action, Full Tilt Poker.net has decided that it must suspend "real money" play in the United States until this case is resolved. However, Full Tilt Poker.net will continue to provide peer-to-peer online poker services outside of the United States.

For more information, please call +442032877138

About Full Tilt Poker.net

Full Tilt Poker.net™ is the host of a worldwide virtual poker cardroom service. It is not in the business of betting or wagering and does not participate in the games as a player. It merely provides a service to those who wish to test their skills against others for fun, prizes or money. It is duly regulated and licensed by the Alderney Gambling Control Commission. With innovative graphics, superior customer service and a safe, secure interface, the software is geared to enhance and personalize the online poker experience. Although virtual poker is legal where the games are hosted and played, it may not be legal where individual players are located.

After Kentucky, I thought the industry moved the domains to registrars outside the USA. This would have prevented seizure of assets without due process.

I checked. It looks like they were non-US Registrars. This is serious.

According to HackerNews: "The top level domain registrar for .com is in the US, so the US has jurisdiction over it regardless of which retail registrars you use."
and....
"Neustar, Verisign, and Afilias operate the actual registry for most of the commercial TLDs (.com, .net, .me, .info, etc), and are all within US jurisdiction. Further, they all hold hefty government contracts."

So the domains were basically commandeered.....without due process.

Webmaster
StartCasino.com