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.
"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.
"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.
Thats not right, the feds are just greedy trying to hold peoples hard earned money.
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!
~Ace
The government is allowed to do anything it wants. We are approaching socialization little by little.
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.
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.
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.
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.
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.
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...........
.......
That money could have been used to find weapons of mass destruction in Iraq.
Hot off the Government website - its a drop in the bucket what Obama spent on his date night compared to the Wars. Not only the monetary amount, its the human factor we should be up in arms about. Many men and women in these wars lost their lives, many children will grow up resenting the person that started the wars, continued the war, and not stopped it in time to save their Mom or Dad. If I was a sensible person, I would fear those children's resentment more than the money we have lost. There is no telling what can happen to a child's mind with emotional trauma such as that.
Going to the monetary factor -
"Supplemental request is enacted, total war-related funding would
reach $941 billion, including $684 billion for Iraq, $223 billion for Afghanistan, $28 billion for enhanced security, and $5 billion that cannot be allocated" I didn't get the part for Homeland Security, which in my view is watching and spying on the American Citizen.
This is right out of a recent Government Report. Yeah, I have too much time on my hands these days. Huh? And the worst part about all of this is we are not OUT of there yet. Can you imagine what we could have done with that money here in the States? We couldn't help those in New Orleans with a decent rebuilding program for homes or build a levee that could stand, nor other parts that were affected, we could have helped improve education, repair bridges that are falling down all over the US. I can't go on because the waste of all those lives and money gives me a headache.
I hope that Obama takes the Mrs out every chance he gets, and if it costs the tax payer money it can't be helped, they live in a cage and its not a healthy thing mentally.
I agree 100%!!!!!!
The only weapon of mass destruction are the ones who voted for the walking time bomb we now have in the Oval Office. But it doesn't matter. Obama will never be blamed for the three trillion dollar non-stimulas bill that he claimed we needed so it would create all these so called jobs.
Stupid question of the day: what happens if, had the gov't not seized $ as they did, that is, that he gets the check for $10K, and decides he'd rather have that than be in the tournament? That's a lot to trust someone with!
or am I misunderstanding? maybe it's like those fake checks from the credit card co's?
and oh, I tried to warn everyone but no one would listen or labeled me a nut. "Anyone else is better than Bush!" or "Republicans are only for the rich" or "Stop listening to Rush Limbaugh" or "(the Republican candidate) has issues also." I notice too whoever sends the most junk mail seems to win the election!
I tried to warn them also. All I got was " we win, you lose " replies. Well guess what? We are all losers now.
True, even that would be more worthy.
How did this all turn to Obama? I just wonder how much it cost for Bush to go back and forth to Texas. Were was all the blame when the Bushes were in office. For all you hater leave him along. If you have a better way are ideas than you should have run for office. We put up with the bushes for 8 years, and I'm so sick of people downing Obama back all the time, maybe if you had being on George back we wouldn't be here. Show some respect. Watch it your true colors are showing. I personal think this shouldn't be on this board. People have different ideas and it is very insulting.
^
pepper, settle down its a forum. Free speech leave that alone, Bush was bad but imo Obama isnt any better. People think hes going to save us LOL. The stimulus? are <snip>ing serious? the bail outs? tax cheat tim geithner? giving the Queen an ipod, bowing down to a Saudi King? LOL!!! then his apology tour? i'll stop here. lol
You settle down. You don't have free speech you can go to jail and be kill for free speech.He has being in office
long enough to be judge. I don't think he going to save us I know that this is bigger than him, but at least he trying. What about big bonus, housing cheats people and kids are being put out on the street. The Queen would think that was refeshing. You bow to Saudi everytime you go to the gas pump. I stop here. Your true self is showing.
my true self is showing?, your judging me quicker then a fart in the wind. When i said free speech, its for people on this forum to express their opinions. I dont see anyone crossing the line either. But you may stop 'here' and go give your mommy a hug
What is FREE about America, nothing
getting like CHINA. only thing free is the air
Wait just a minute! Since when is receiving a cash prize for winning a T O U R N A M E N T considered gambling? It's not!!! Is this another example of NWO government doing what ever they feel like and the rule of law is out the window?
So is this website about politics or the lottery? I hear more than enough about politics on the news, at work, at home, etc. Can we stick to lottery issues???
Thanks you someone gets it. I wish I could hug my mother.
you two are fcking idiots, like monkey stop hanging off each other nuts. Lottery issues? govt gets your taxes lol, online gambling no differences, thats why you fill out a fcking form after you win.
Calm down dude, just let it go. It's not worth it.
This whole issue is about the GOVERNMENT sticking their nose into gamblers business. Lottery is gambling. Government is political. They go hand in hand. One day they may decide to change the laws where winners of the lottery of $600 or less will be forced to pay a fed tax to help repay the stimulas bill.
Pepper1, I don't know from what country you come from but by your sentence structure you apparently are not from the USA. In this country you do not get thrown in jail for exercising your First Admendment, which is freedom of speech.
I'm from the USA what country are you from? You can exercising your First Admendment right which I know is your
freedom of speech and still go to jail depend if it consisder a threat are not. Also I'm not a monkey and I don't have a set of nuts to hang off of.
Welcome to Lottery Post. If you take as much time and research on picking your numbers as you have on looking up what the drive by media has reported on Bush you must be a very rich person.
Welllllllllll,
This was one of the more entertaining threads I've read in a while. LOL. Monkeys, hanging on nuts (hurts to think about that).
Seriously, it goes back to this guy won the money in an online poker tournament. ONLINE. Right now, right or wrong, agree or disagree, gambling online is risky business, for your money and dealing with the gov't. If you play online, you are taking chances. This person did, they found out, bye bye $.
I don't agree with it, but it is what it is.
"Right now, right or wrong, agree or disagree, gambling online is risky business"
Right or wrong it's also, at least according to the government, illegal. This guy gambled at poker and won, but he also gambled on whether or not the government would catch him and enforce the law. Looks like he lost that bet. If they seized money from somebody who was being paid 10 grand to kill somebody nobody would be whining about the government interfering in hislife and taking his money, and nobody would be surprised. As long as the government keeps it (or maintains that it is) illegal, you can play your money, but you'll also be taking your chances.
Wow - I was censored !
The government wants to spread the wealth !
The taxes you pay after winning the lottery are already high !
The story had political implications !
So does this mean its safe to make a cashout now? I cashed out for 300 bucks like 10 days ago and the check bounced, and I clearly understand why. And I appreciate Pokerstars putting the money back in my poker account for what its worth. But it doesnt do me much good unless its in my pocket. So what Im asking is this: If I request a cashout tomorrow is the exact same thing going to happen to me again? Or did this situation get fixed? Any thoughts or advice is greatly appreciated. Thanks guys.
I wouldn't count on using the money for paying bills. You might as well plan on never having it, and if you do get paid, consider yourself fortunate.