Feds freeze online poker champ's winnings

Jun 11, 2009, 11:20 pm (38 comments)

Online Gambling

Federal officials order banks to freeze millions in online poker winnings

On the Sunday before Memorial Day, David made the big time.

Winning $10,000 in an online poker tournament made him eligible for the upcoming World Series of Poker, the game's premier event, where hundreds of players — amateur and professional — descend on Las Vegas from around the world to play for a multimillion-dollar pot.

To register, he simply had to cash a check cut by a company that processed payments for the poker Web site Pokerstars.com and use the $10,000 to buy into the series.

When he went to cash the check from Account Services Wednesday, it bounced, he said.

What David, a 41-year-old from Virginia who spoke on the condition that ABC News use only his first name, initially thought was a glitch turned out to be part of an unprecedented government crackdown on online poker that affected some 27,000 people.

Late last week, the federal government ordered five banks to freeze a total of $30 million in payments owed to the players from companies that process payments from two offshore gambling sites, according to the Poker Players Alliance, a group that represents the interests of the companies and players.

"It's not like the government went after money that the site made, instead they seized money that belonged to me," David said. "There is no law that restricts citizens from recovering money."

According to the alliance, federal prosecutors working out of New York's Southern District ordered Citibank, Wells Fargo and three smaller banks to freeze funds in accounts belonging to Allied Systems and Account Services, companies that process funds for the poker sites.

Some affected players who gamble at the popular sites FullTiltPoker.com and PokerStars.com first realized they could not access funds in their accounts over the weekend when checks issued from the companies bounced.

Online poker, a $9 billion to $12 billion a year industry, is legally a gray area, experts told ABCNews.com. Washington is the only state with a law on its books that bans residents from playing on the Internet. The sites themselves, however, are not allowed to operate in the United States and are all registered overseas.

Online poker players alliance criticizes freezing of accounts

"There is no legal precedent for what the government is doing," said John Pappas, executive director of the alliance.

"We contend playing online poker is not unlawful. The government is going after the players' money, not the sites'. The fact is, there is no federal law against playing online poker," he said.

Though the government maintains that online gambling is illegal, the U.S. attorney's office in New York would not comment on the case or confirm an investigation was under way.

According to federal documents obtained by The Associated Press, a judge in the Southern District of New York issued a seizure warrant last week for an account at a Wells Fargo bank in San Francisco. The AP reported that the documents also showed that a federal prosecutor told a bank in Arizona to freeze an account.

In a letter dated Friday and faxed to Alliance Bank of Arizona, Arlo Devlin-Brown, the assistant U.S. attorney for the Southern District of New York said that accounts held by payment processor Allied Systems Inc. are subject to seizure and forfeiture "because they constitute property involved in money laundering transactions and illegal gambling offenses," according to the AP.

In another letter, Devlin-Brown asks that the bank treat the funds "as legally seized" by the FBI, saying that the government has probable cause that the gambling payments of U.S. residents had been directed to offshore illegal Internet gambling businesses, the AP reported.

A source at Citgroup familiar with the government request, however, confirmed the "bank has been contacted and is cooperating" with the authorities.

According to the alliance, the laws cited by prosecutors "appear to allege violations of the Wire Act and the Illegal Gambling Business Act" and not to a more recent piece of legislation on online gaming called the Unlawful Internet Gambling Enforcement Act.

Another player, Sam Friedman, a 24-year-old accountant in New York City who plays every night in tournaments on FullTiltPoker.com, said he realized the company had last week removed an option to deposit winnings directly into his Citibank account.

Internet poker players say feds are 'Reaching into people's bank accounts'

"There are lots of ways to deposit and withdraw money and payment options are always disappearing, but something didn't seem right," Friedman said.

"I can't believe the government is reaching into people's bank accounts like this," he said. "For a lot of serious players this is their lifeblood. This is how they make ends meet."

Both FullTiltPoker.com and PokerStars.com have reimbursed players who tried to cash out and were unable to.

"In light of recent events involving the freezing of certain accounts, Full Tilt Poker would like to assure all players that their funds remain safe and secure," spokeswoman Michelle Clayborn said in a statement.

"All players who were affected by the current situation have had their funds returned to their accounts," the statement said. David, the World Series hopeful, said he had been reimbursed by PokerStars and given an additional 10 percent credit.

He used his own savings to buy into the World Series and will use the winnings from his championship game online to pay himself back as soon as he gets them, he said.

ABC News

Comments

JAP69's avatarJAP69

"All players who were affected by the current situation have had their funds returned to their accounts,"

Thats not small change they are talking about.

dr65's avatardr65

BS

dopey7719's avatardopey7719

"I can't believe the government is reaching into people's bank accounts like this," he said. "For a lot of serious players this is their lifeblood. This is how they make ends meet."

 

I thought I had it bad and have been considering calling gambler's anonymous for the past few weeks.  Here I am beating myself up for wasting 20-40 bucks on powerball & scratch-offs every week praying for a miracle....but at least I don't depend on it to make ends meet.  My lifeblood is my 9-5...not the lottery or card games. 

That really sucks what the government is doing to them though...they're punishing the players...anyway...it's all a gamble, isn't it.

Icezkube's avatarIcezkube

Thats not right, the feds are just greedy trying to hold peoples hard earned money.

AceKicka's avatarAceKicka

This gov of ours is a joke! Bankrupt, greedy, wasteful, corrupt, manipulative, etc. Talk about money laundering & counterfeiting ... that's all they're about. 

I usually try to keep a low profile and stay out of it but this BS is ridiculous. As much as they put on the backs of all of us, they ought to stay out of our personal affairs! Oh, and I will 'gets' mine!

When is enough ...ENOUGH?!?  You've corrupted the whole world with your TOXIC ASSets - have you no <snip> shame? And where's the freakin' "CHANGE"? I see alot of the SOS going down. Amateurs & clowns - that's what we have here.

Okay, time to get back to winning. I said what I had to say. It's not ALL that I could say but what good would it do any way? We're on the edge of disaster with not a brain in sight!

Hey, maybe I'll become the new Lottery CZAR. Don't get me started!

 

Hippy   ..."Now, I'm OUT!!''

~Ace

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

Dawn32's avatarDawn32

The government is allowed to do anything it wants. We are approaching socialization little by little.

Big Hitter

The united states federal government is a government in name only. These guys and gals are leading the American poulation down the path to total economic destruction. This government does NOT produce ANYTHING of VALUE and they intend to take EVERYTHING of VALUE owned by the American people. This country has been in the hands of the worldwide corporate rulers since 1913 and the country will continue to remain in said hands until it is officially a banana republic. As for gambling winnings being confiscated, the government will stoop to any level to deny average Americans the freedom to enjoy themselves. It dosen't matter who is in office, the worldwide corporate OWNERS will do whatever they want. Call me a conspiricy nut if you want, but everything in this world (economically and politically) is steadily progressing towards total worldwide government control.

Littleoldlady's avatarLittleoldlady

Online Gamblers need to get smart and do like the big corporations..BUY A LOBBYIST AND LOBBY CONGRESS!  Pad some of those congressmen's pockets and you will quickly see how this problem goes away.   Want to fix it?  Throw some money at it.

a$VeryLuckyMan's avatara$VeryLuckyMan

UPDATE::::::::::::::::::::::::::::::::::::::::::::::::::::::::

OBAMA IS GOINT TO USE THESE FUNDS THAT WERE SEIZED TO PAY FOR HIS TRIP TO PARIS WITH HIS FAMILY, AND ALSO THE NIGHT OUT ON NEW YORK!!1

 

If you voted for him, you are the sucker.

Kaptainess's avatarKaptainess

There is a lot of things I do not agree with the Government.  Lots.  We are taxed on our money once, twice, three times.  Seems like every few weeks they find a new tax to put upon the average citizen. 

Every nickel and dime gets taxed???  What about those in Government that gets the free trips?  The free goodies still?  Do they put that on their tax records?  Did they ever?  You betcha they didn't, its okay for them.  Its them and us. 

I know, non smokers agree with the huge increase tax on cigarettes.  I don't.  How come its always a tax that hurts the working men and women?  Take away the tax deductions away from the working man and women and give the rich a tax break?  What kind of Government would do that?  Ours - OUR Government did it and no one put up a fuss.  Why?  Because we forget too soon.  We lost our fight for injustice, its not American anymore to fight for our rights, to march on Washington and tell them we won't take it anymore.  We should, we ought to, but we won't.  We have become complacent, lazy, too self absorbed in our own world of texting and video machines, lets not forget the cable TV melting our brains.

What we need is mental fitness.  We lost the will to fight when in the 1960's - 1970's when we did march nothing changed.  We were outnumbered by the 'older' generation, well we are the older generation and we have the numbers now to make changes.  But we have become discouraged from a long time ago and its hard to rethink, regroup, but we must. 

The Government can't figure out how to tax the interment.  What a HUGE pie to cut up by  the States and Fed Government.  Where do they start?  How much can they get?  How do they collect?  And I'm sure they will find more ways to make our lives miserable with more taxes. 

This Poker Tournament has been going on for years and they just took notice of it?  What about all the other winners, what are they going to do with them?   I can't remember how many years this tournament has been going on - at least 10 years?   Now they want money from it???  Why??  Because they were too stupid to use the money they already taxed us on for things we really need instead of TWO wars we didn't need?? 

I recently blogged about unfair parking tickets.  Guess what was on my local news?  My City subcontracted tow trucks, the tow trucks towed cars that was LEGALLY parked to an Illegal parking space in front of a fire hydrant.  Then the cops came along and gave them a nice fat ticket. Not once, but twice that was reported in the news segment.  Nice huh?  Its another form of tax.

They didn't give the guy a chance, I'm sure he would have included his winnings in his tax records.  I just hope someone helps this person out and backs him so he can win the grand prize at the tournament.

Littleoldlady's avatarLittleoldlady

Quote: Originally posted by a$VeryLuckyMan on Jun 12, 2009

UPDATE::::::::::::::::::::::::::::::::::::::::::::::::::::::::

OBAMA IS GOINT TO USE THESE FUNDS THAT WERE SEIZED TO PAY FOR HIS TRIP TO PARIS WITH HIS FAMILY, AND ALSO THE NIGHT OUT ON NEW YORK!!1

 

If you voted for him, you are the sucker.

Whether you know it or not, these laws that give the Feds the power to take this money were enacted during the BUSH administration and the Clinton administration.  Obama has nothing to do with this.  You small minded embiciles blame everything on him.  It is as if nothing was wrong or happened until he became President and for your information, they were millionaires BEFORE he became President. I am sure they can afford the cost of the trip!!

Todd's avatarTodd

Quote: Originally posted by Littleoldlady on Jun 12, 2009

Whether you know it or not, these laws that give the Feds the power to take this money were enacted during the BUSH administration and the Clinton administration.  Obama has nothing to do with this.  You small minded embiciles blame everything on him.  It is as if nothing was wrong or happened until he became President and for your information, they were millionaires BEFORE he became President. I am sure they can afford the cost of the trip!!

Well, he did spend about half a million dollars on "date night" in New York City.

codmander

feds  musta got a bad beat super suk out somewhere down the line....even still tho.. I wouldnt put money into those fine if you win a freeroll........  When I play poker I take the 2 hour ride to mohegan casino  get paid as soon as tourny is over or walk out cussin...........Red Devil  .......Jester

Tenaj's avatarTenaj

Quote: Originally posted by Todd on Jun 12, 2009

Well, he did spend about half a million dollars on "date night" in New York City.

That money could have been used to find weapons of mass destruction in Iraq.

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