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Three largest online poker sites shut down by FBI

Online GamblingOnline Gambling: Three largest online poker sites shut down by FBI
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Executives indicted, arrested

The founders of the three largest online poker sites were indicted by the FBI on Friday in what could serve as a death blow to the thriving industry.

Eleven executives at PokerStars, Full Tilt Poker and Absolute Poker were charged with bank fraud and money laundering in an indictment unsealed in a Manhattan court. Two of the executives were arrested on Friday morning in Utah and Nevada. Federal agents are searching for the others.

Prosecutors are seeking to immediately shut down the sites and to eventually send the executives to jail and to recover $3 billion from the companies.  Prosecutors seized five Internet domain names used by the poker companies.  By Friday afternoon Full Tilt Poker's site displayed a message explaining that "this domain name has been seized by the F.B.I. pursuant to an Arrest Warrant."

The online gambling industry has taken off over the last decade, drawing an estimated 15 million Americans to bet online.

In 2006 Congress passed a law prohibiting online gambling. Most of the leading sites found ways to work around the law using foreign banks, but prosecutors allege that in doing so they broke the law.

Federal prosecutors in Manhattan have alleged the poker companies, which are located outside the U.S., tried to sidestep U.S. laws prohibiting banks and credit-card issuers from processing gambling payments by disguising billions of dollars from U.S. gamblers as payments to nonexistent online merchants for golf balls, jewelry, flowers and other merchandise.

After U.S. banks and financial institutions began detecting and shut down bank accounts used by the scheme in late 2009, prosecutors allege, a new strategy was developed in which two online poker websites allegedly persuaded a few small, local banks facing financial difficulties to process their payments in return for multimillion-dollar investments in those banks.

"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 Preet Bharara, the U.S. attorney in Manhattan.  "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."

Representatives of PokerStars and Full Tilt Poker didn't immediately respond to requests for comment Friday. Contact information for Absolute Poker couldn't immediately be located.

Federal authorities also have filed restraining orders against 76 bank accounts in 14 countries allegedly associated with the poker companies and others as a part of a separate civil forfeiture action. They are seeking at least $3 billion in civil money-laundering penalties and forfeiture.

Friday's indictment and seizures mark the latest effort by U.S. authorities to crack down on online gambling. In recent years, some executives of overseas online-gambling firms have been arrested when they travel to the U.S.

In the latest indictment, U.S. prosecutors have alleged that the poker companies recruited third parties to open bank accounts and process "e-check" transactions using phony company names. Four men who allegedly acted as middlemen in collecting payments also have been charged.

About a third of the funds deposited by gamblers went to the poker companies as revenue, known as the "rake," prosecutors said. A rake refers to a percentage of a poker pot that is collected by a casino or online poker site after a player wins the hand. 

Poker fans took to Twitter in droves, worried about the money in their online gaming accounts, fretting that online poker's days were at an end.

"Well the good news is I think I only had about $300 left on the online poker sites overall," tweeted Jimi Schindler of Madison, Wis. "Maybe I'll see that money?!!?"

LA Times, Wall Street Journal, Lottery Post Staff

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48 comments. Last comment 3 years ago by johnph77.
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Kentucky
United States
Member #32652
February 14, 2006
5268 Posts
Offline
Posted: April 15, 2011, 5:53 pm - IP Logged

Executives indicted, arrested

The founders of the three largest online poker sites were indicted by the FBI on Friday in what could serve as a death blow to the thriving industry.

Eleven executives at PokerStars, Full Tilt Poker and Absolute Poker were charged with bank fraud and money laundering in an indictment unsealed in a Manhattan court. Two of the executives were arrested on Friday morning in Utah and Nevada. Federal agents are searching for the others.

Prosecutors are seeking to immediately shut down the sites and to eventually send the executives to jail and to recover $3 billion from the companies.  Prosecutors seized five Internet domain names used by the poker companies.  By Friday afternoon Full Tilt Poker's site displayed a message explaining that "this domain name has been seized by the F.B.I. pursuant to an Arrest Warrant."

The online gambling industry has taken off over the last decade, drawing an estimated 15 million Americans to bet online.

In 2006 Congress passed a law prohibiting online gambling. Most of the leading sites found ways to work around the law using foreign banks, but prosecutors allege that in doing so they broke the law.

Federal prosecutors in Manhattan have alleged the poker companies, which are located outside the U.S., tried to sidestep U.S. laws prohibiting banks and credit-card issuers from processing gambling payments by disguising billions of dollars from U.S. gamblers as payments to nonexistent online merchants for golf balls, jewelry, flowers and other merchandise.

After U.S. banks and financial institutions began detecting and shut down bank accounts used by the scheme in late 2009, prosecutors allege, a new strategy was developed in which two online poker websites allegedly persuaded a few small, local banks facing financial difficulties to process their payments in return for multimillion-dollar investments in those banks.

"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 Preet Bharara, the U.S. attorney in Manhattan.  "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."

Representatives of PokerStars and Full Tilt Poker didn't immediately respond to requests for comment Friday. Contact information for Absolute Poker couldn't immediately be located.

Federal authorities also have filed restraining orders against 76 bank accounts in 14 countries allegedly associated with the poker companies and others as a part of a separate civil forfeiture action. They are seeking at least $3 billion in civil money-laundering penalties and forfeiture.

Friday's indictment and seizures mark the latest effort by U.S. authorities to crack down on online gambling. In recent years, some executives of overseas online-gambling firms have been arrested when they travel to the U.S.

In the latest indictment, U.S. prosecutors have alleged that the poker companies recruited third parties to open bank accounts and process "e-check" transactions using phony company names. Four men who allegedly acted as middlemen in collecting payments also have been charged.

About a third of the funds deposited by gamblers went to the poker companies as revenue, known as the "rake," prosecutors said. A rake refers to a percentage of a poker pot that is collected by a casino or online poker site after a player wins the hand. 

Poker fans took to Twitter in droves, worried about the money in their online gaming accounts, fretting that online poker's days were at an end.

"Well the good news is I think I only had about $300 left on the online poker sites overall," tweeted Jimi Schindler of Madison, Wis. "Maybe I'll see that money?!!?"

Is it just a coincidence the Justice Department moved against the foreign online poker companies days after Washington D.C announced they were entering the online poker business?

As we speak, nobody residing in the U.S.A can play online poker for even 2 cents. What exactly is the difference between playing online from our homes and playing in a casino?

    time*treat's avatar - radar

    United States
    Member #13130
    March 30, 2005
    2171 Posts
    Offline
    Posted: April 15, 2011, 5:56 pm - IP Logged

    Is it just a coincidence the Justice Department moved against the foreign online poker companies days after Washington D.C announced they were entering the online poker business?

    As we speak, nobody residing in the U.S.A can play online poker for even 2 cents. What exactly is the difference between playing online from our homes and playing in a casino?

    The difference is whether or not Unscrupulous Scam has figured out a way to get 40% of the take for doing 0% of the work.

    In neo-conned Amerika, bank robs you.
    Alcohol, Tobacco, and Firearms should be the name of a convenience store, not a govnoment agency.

      JonnyBgood07's avatar - Patriots logo1.jpg
      Connecticut
      United States
      Member #61623
      May 29, 2008
      19320 Posts
      Offline
      Posted: April 15, 2011, 6:10 pm - IP Logged

      if i didn't know any better,I'd swear old sammy is trying like hell to turn america into a third world country...has anyone in congress  done  any estimates on how much potentially gets poured back into the economy from peoples won moneys? .... seeing as though they have an estimate for how many folks gamble onlineConfused.

      "...Life is not a matter of holding good cards,but sometimes playing a poor hand well...
      'Fortune Cookie wisdom'

       


        dpoly1's avatar - driver
        PA
        United States
        Member #66141
        October 16, 2008
        1434 Posts
        Offline
        Posted: April 15, 2011, 6:22 pm - IP Logged

        New Black Panthers intimidate voters in Philadelphia in the 2008 Election & Eric Holder determines that there was no crime, but somebody actually stimulates the economy and they are arrested !?

         

        ........................... that is why many Patriotic Americans fly the "Don't Tread On Me" Flag!

         

        US Flag

         

        I have a friend that is a math genius ........ he earns allot of money from on-line poker ! Paying his way thru college without debt ............. but who would want that !!!!!!!!!!!!!!!!!!!!

          Avatar
          Kentucky
          United States
          Member #32652
          February 14, 2006
          5268 Posts
          Offline
          Posted: April 15, 2011, 7:44 pm - IP Logged

          The difference is whether or not Unscrupulous Scam has figured out a way to get 40% of the take for doing 0% of the work.

          Sounds like the oil companies. I filled my car in December for $33 and for that today, I can get a little over half a tank of gas.

            unseen's avatar - 4eyes
            louisville, Ky
            United States
            Member #4928
            June 3, 2004
            137 Posts
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            Posted: April 15, 2011, 7:47 pm - IP Logged

            OUCH.  I have a friend that plays at Full Tilt and he averages a good $1500-$4000 a month in extra income from poker.  He's going to cry when he hears this news.

              Avatar
              Kentucky
              United States
              Member #32652
              February 14, 2006
              5268 Posts
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              Posted: April 15, 2011, 7:51 pm - IP Logged

              if i didn't know any better,I'd swear old sammy is trying like hell to turn america into a third world country...has anyone in congress  done  any estimates on how much potentially gets poured back into the economy from peoples won moneys? .... seeing as though they have an estimate for how many folks gamble onlineConfused.

              The article estimates 15 million American online players. Who knows the amount of revenues being lost.

                James1's avatar - 5599078405 12a562a9e7_t.jpg
                Florida
                United States
                Member #104438
                January 14, 2011
                2172 Posts
                Offline
                Posted: April 15, 2011, 7:52 pm - IP Logged

                The sites are up and running just fine for me. 

                Federal laws cease to amaze me. Greedy ba$tards !!

                2014 Highest Winner: $500

                  unseen's avatar - 4eyes
                  louisville, Ky
                  United States
                  Member #4928
                  June 3, 2004
                  137 Posts
                  Offline
                  Posted: April 15, 2011, 7:58 pm - IP Logged

                  this is what most people are getting.  You can log in but can't sit at a table to play

                   

                   

                    Avatar
                    Kentucky
                    United States
                    Member #32652
                    February 14, 2006
                    5268 Posts
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                    Posted: April 15, 2011, 8:02 pm - IP Logged

                    The sites are up and running just fine for me. 

                    Federal laws cease to amaze me. Greedy ba$tards !!

                    The sites I saw are up and running fine too WITH NO U.S. PLAYERS.

                    When I tired to enter a tourney a pop-up said "Sorry, do to government regulations playing for real money is not allowed in your area".

                      joshuacloak's avatar - avatar 23415.gif

                      United States
                      Member #32537
                      February 12, 2006
                      639 Posts
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                      Posted: April 15, 2011, 8:35 pm - IP Logged

                      illegal gambling profits

                      my beep,this is my issue with govt, its not illegal to spend our money however we want......, its just govt being a biggest jerk on the block , aka a evil dictatorship of the rights of their own people.

                      how is it anyone else's business as americans  in united states What i do with my own money????

                      None, you all have no business in my business onless am harming you somehow......

                      onless am hiring a freaking hitman or something etc         , Ever other american has no business telling Me/you  how to spend my/your  money, let alone your united states representatives, aka congress who you put in power

                      so this is bullcarp law agiant  online gambling,but then  and they know it, you know it

                      congress needs to back off and learn to stfu and gtfo of everyone business

                        Jordans121's avatar - nw bookeep.jpg

                        United States
                        Member #69169
                        January 5, 2009
                        2080 Posts
                        Offline
                        Posted: April 15, 2011, 9:18 pm - IP Logged

                        there are more worse things happening in the world than trying to indict an online poker site. I NEED TO MOVE TO CANADA!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! I'm sick and tired of these federal Bullies spending our tax dollars on this type of ####!! Try catching the man that is killing people in NewYork, you <snip>s!!!!!

                        This post has been automatically changed by the Lottery Post computer system to remove inappropriate content and/or spam.

                        "Many Strategies|One Game"

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                          New Member
                          brooklyn,Ny
                          United States
                          Member #109570
                          April 15, 2011
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                          Posted: April 15, 2011, 10:31 pm - IP Logged

                          bam bo kla

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                            BILOXI, MISSISSIPPI
                            United States
                            Member #19651
                            August 3, 2005
                            621 Posts
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                            Posted: April 15, 2011, 10:36 pm - IP Logged

                            back door way of getting taxes