PokerStars: Department of Justice Charges PokerStars with Fraud
PokerStars and Several Other Online Poker Sites Charged with Fraud and Conspiracy
Are you of the mind that there's just something fishy about the idea of playing poker online for money?
Me too. Apparently, so does the U.S. Department of Justice.
According to BluffMagazine.com, the DOJ charged the founders of PokerStars, Full Tilt Poker and Absolute Poker with fraud and conspiracy in an indictment that was unsealed Friday morning.
In all, five domain names have been seized, and restraining orders were issued for 75 bank accounts used by poker sites and payment processors.
At the moment, there are 11 defendants, including Isai Scheinberg and Paul Tate from PokerStars, Ray Bitar and Nelson Burtnick from Full Tilt Poker, and Scott Tom and Brent Beckley of AbsolutePoker. The DOJ also charged five people believed to be working for payment processors, two of whom have already been arrested.
As for what exactly the defendants did wrong, I'll let Manhattan U.S. Attorney Preet Bharara explain:
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. 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.
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The "scheme" Bharara apparently involved the sites in question using payment processors to trick U.S. banks into processing payments to and from players. Each of the defendants has been charged with Conspiracy to Violate Unlawful Internet Gambling Enforcement Act, the punishment for which involves a maximum sentence of five years in prison, a fine of $250,000 or double the amount won or lost, and three years supervised release.
The founders of the poker sites have been charged with Violation of Unlawful Internet Gambling Enforcement Act, Operation of Illegal Gambling Business, Conspiracy to Commit Bank Fraud and Wire Fraud and Money Laundering Conspiracy. Combined, the potential prison time and fines are considerable, to say the least.
Oh by the way, the DOJ is also seeking $3 billion in penalties from the companies.
I'm no lawyer, but I think this is a pretty good example of throwing the book at somebody.
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