It is the news that was always on the cards. But the online
poker industry was hoping that it would never materialize. Now,
it has. In an indictment unsealed by the federal prosecutors 11
persons were accused of serious financial offences under the
UIGEA of 2006. These included the founders of the three biggest
American online poker sites
FullTilt.com,
PokerStars.com and
AbsolutePoker.com. The broad charges
against these online poker sites include alleged bank fraud,
illegal gambling offences and money laundering. The US
authorities are seeking the forfeiture of at least $3 billion in
civil money laundering penalties from these online poker sites.
The specific allegation against these online poker sites is that they deceived the US banks and financial institutions into processing billions of dollars in payments for online gambling, which is illegal under the UIGEA. The funds received from American online poker players was disguised as payments to hundreds of fake online merchants purporting to sell merchandise such as jewelry and golf balls. Manhattan US Attorney Preet Bharara added, “Moreover, as we allege, in their zeal to circumvent the gambling laws, the defendants also engaged in massive money laundering and bank fraud.”
Australian national Daniel Tzvetkoff was arrested last year for illegally processing online poker payments. It was rumored that he owed considerable sums of money to these online poker sites. Tzvetkoff is co-operating with the federal authorities. Some of the information provided by him came out in the public domain. This compelled the federal authorities to take immediate action against the online poker sites.
Isai Scheinberg and Paul Tate of PokerStars.com, Raymond Bitar and Nelson Burtnick of FullTilt.com and Scott Tom and Brent Beckley of AbsolutePoker.com are not presently in the US, along with some others who figure in the indictment. The US authorities are working with international agencies to seek their arrest. The three arrested are John Campos of SunFirst bank in Utah and payment processors Chad Elie and Bradley Franzen.
Former Senator Alfonse D’Amato, Chairman of the Poker Players Alliance has issued a statement condemning the indictment. There has been no reaction from the three online poker sites in question, but their domain names have been seized and they are apparently no longer open for wagering.