The companies face accusations of money laundering, bank fraud and other illegal gambling felonies
This Friday, when an indictment was unsealed, it was acknowledged that the federal authorities in New York have charged eleven defendants with bank fraud, money laundering and other illegal gambling offences. It was stated that, “The defendants”, Isai Scheinberg and Paul Tate (PokerStars), Raymond Bitar and Nelson Burtnick (Full Tilt Poker), Scott Tom and Brent Beckley (Absolute Poker), four payment processors, and the co-owner of a small private bank, “arranged for the money received from U.S. gamblers to be disguised as payments to hundreds of non-existent online merchants purporting to sell merchandise such as jewelry and golf balls.”
FBI Assistant Director-in-charge, Janice K. Fedarcyk said, "These defendants, knowing full well that their business with U.S. customers and U.S. banks was illegal, tried to stack the deck. 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." Manhattan U.S. Attorney, Preet Bharara also gave a comment, "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. Moreover, as we allege, in their zeal to circumvent the gambling laws, the defendants also engaged in massive money laundering and bank fraud.”
Against the poker companies, the United States filed a civil money laundering and in rem forfeiture complaint, and also against their assets, and the assets of various payment processors. Additionally, five Internet domain titles that were used by the poker companies were seized, and more then 75 bank accounts faced restraining orders. It was further stated that, “Of the billions of dollars in payment transactions that the poker companies tricked U.S. banks into processing, approximately one-third or more of the funds went directly to the Poker Companies as revenue through the "rake" charged to players on almost every poker hand played online."
More details on the indictment can be found at http://www.fbi.gov/newyork/press-releases/2011/manhattan-u.s.-attorney-charges-principals-of-three-largest-internet-poker-companies-with-bank-fraud-illegal-gambling-offenses-and-laundering-billions-in-illegal-gambling-proceeds
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