Major Online Poker Sites Charged with Fraud, Money Laundering

American justice

The Manhattan U.S. Attorney has charged the principals of three of online poker's biggest sites with bank fraud, illegal gambling and laundering billions of dollars.

According to a press release from the U.S. Attorney's office in New York, a multi-billion dollar civil money laundering and forfeiture action has also been filed and the Internet domain names used by PokerStars, Full Tilt and Absolute Poker have been seized.

In all, 11 defendants have been charged, including PokerStars' Isai Scheinberg, Fill Tilt Poker's Ray Bitar and Absolute Poker's Scott Tom.

"As charged, these defendants concocted an elaborate criminal fraud scheme, alternately tricking some U.S. banks and effectively bribing others to assure the continued flow of billions in illegal gambling profits," said Manhattan U.S. Attorney Preet Bharara.

PokerStars, Full Tilt Poker "Lied to Banks"

"Moreover, as we allege, in their zeal to circumvent the gambling laws, the defendants also engaged in massive money laundering and bank fraud.

"Foreign firms that choose to operate in the United States are not free to flout the laws they don’t like simply because they can’t bear to be parted from their profits."

Janice Fedarcyk, The FBI's Assistant Director-in-Charge, said the online poker sites lied, flauted the law and wagered they could circumvent U.S. law without repercussions.

"These defendants, knowing full well that their business with U.S. customers and U.S. banks was illegal, tried to stack the deck," she said.

"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 defendants bet the house that they could continue their scheme, and they lost."

The indictment alleges the online poker companies continued to operate in the United States despite passage of the Unlawful Internet Gambling Enforcement Act in 2006, used fraudulent methods to circumvent federal law and trick banking institutions into processing payments on their behalf, and enlisted "payment processors" to lie to banks about the nature of the financial transactions they were processing and disguise payments back to the them.

It goes on to allege PokerStars and Full Tilt approached the principals of a few small, local banks facing financial difficulties to engage in payment processing on their behalf in return for multi-million dollar investments in the banks.

The indictment and civil complaint seek at least $3 billion. Some of the charges carry maximum penalties of up to 30 years in prison.

With many of the defendants named not living in the United States currently, the U.S. Attorney’s Office is working with foreign law enforcement agencies and Interpol to secure their arrest and seize their criminal proceeds located abroad.

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Gunnz 2011-04-16 00:45:24

WOW. Things are getting worse and worse in the states. When the US government outright works for Vegas things are really bad. Time to move to Canada or Europe. Unbelievable!

Marko 2011-04-16 00:38:11

What does that mean for US poker players and affiliates? Will the players and affiliates get their money?

Annie Nonemous 2011-04-16 00:25:27

I see some other comments elsewhere are blaming the Obama administration for this situation. Lets not forget it was a REPUBLICAN amendment tacked onto an important ports bill with a REPLUBLICAN controled house & senate and REPLUBLICAN president that started this and it was a REPUBLICAN senator who held up all senate business when it looked like the UIGEA might be repealed or delayed. Just saying ...

Annie Nonemous 2011-04-16 00:16:56

Assuming these sites are registered outside the US, hosted outside the US and owned outside the US, why is it the US can seize something worldwide when it should, at most, be able to block it only within US borders? Can you image what the US government would say if the Chinese pulled something like this?

ItWasSooted... 2011-04-16 00:06:51

Well said SmokeyMtn!

DarkInception 2011-04-15 23:58:20

I am also happy I do not live in the US but at the same time can't believe they would stoop so low. What a low point for the land of the "free".

Tyranny 2011-04-15 23:40:47

Business in Vegas is hurting - This will drive more people to Vegas. How big were the bribes / contributions/ deals/ to force this though? Vegas lobbyists do have a lot of pull.

Chsi 2011-04-15 23:07:46

OMG! There must be some mistake!!! I mean, All those really intelligent Fulltilt forum bashing idiots tell us the site is totally legitimate!! So the FBI must be wrong! Ha ha ha ha ha ha ha!!!

Smokeymtn 2011-04-15 23:00:47

Really guys going after Poker players ? Come on! Oh my government is such a bunch of A-holes! Here they fight over funding a women’s right of choice. They have no problem fighting about cutting education funding and taking care of the poor and elderly. They get all up in arms over providing health care to those who can’t afford it and in the end get nothing done any of that or about double digit unemployment or loss of homes and trillions in debt oh except give trillions to billionaires. and now with an industry that 30 million Americans enjoy and use, and industry that could actually create jobs, taxes and income to help pay for education and health care of course they are able to get in my bedroom and stop it! So glad they want to not only protect my rights but tell me what rights I want or have…NOT! We are really messed up when we CAN go after my bedroom but CAN NOT take care of kids, poor and elderly because of our “MORALS”. gezzzz

What about the TRILLIONS walls street has stolen? What about the rampant corruptions in our government. I see FBI you don’t seem to ever get the time to take that on but again the middle class nobody is the one that takes his rights and personal life on the chin because some corrupt official wants to play up to in his/her political ditch wackos agenda for more campaign funding. Hey FBI are you law enforcement or lackeys of these wackos? Not sure this one qualifies as public servants or law enforcement!

So rape, murder, molesters and so many other horrible crimes are not as important and if your a billionair or in politics your above the law…I C FBI.

brnandtrn 2011-04-15 22:50:47

Unbelievable. Another reason not to live in the U.S.

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