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?
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.
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 online
.
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!
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 !!!!!!!!!!!!!!!!!!!!
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.
OUCH. I have a friend that plays at Full Tilt and he averages a good $1500-$4000 a month in extra income from poker. He's going to cry when he hears this news.
The article estimates 15 million American online players. Who knows the amount of revenues being lost.
The sites are up and running just fine for me.
Federal laws cease to amaze me. Greedy ba$tards !!
this is what most people are getting. You can log in but can't sit at a table to play
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".
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
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!!!!!
bam bo kla
back door way of getting taxes
what in the hell they are still sticking their feet in people private business. This is the reason other country have problem with them.
Its illegal to play online poker in the US. If Joe doesn't drive even to the nearest casino the bustards fooling with oil futures will be in a deep trouble.
Holder says , "no more Hold' em without us greedy <snip>s getting a cut" D.C. is full of crap!
They taugh us this in college : To h*ll with the employees and what is good for the country, the company is more important. Big Business runs this country now, we don't have a fighting chance anymore with our votes. They buy the candidates before they run for office with back room deals, they support them with lobbying them with back room deals, and we lose.
Can anyone tell me how it made sense to give tax breakes to companines to send our jobs overseas? We lost the tax revenues from workers, we PAID the companies to do it, and now we are crying because we don't have money to run the Government?
Look at the stats, we are behind China, Japan, India, and some other country. The country is failing, our rights are being stripped away due to home land security, and to make the poor pay for more they hide 'taxes' with more parking and moving violations, new laws with fines, and dig up old laws they haven't used in years. We are policed to death. Look around your town, how many ''police'' departments do you have?
As for the poker sites being busted, big business strikes again, Las Vegas, Atlantic City and the few others are hurting for revenue, so they attack the online gaming.
I think some are missing the point. While I think online gambling should be allowed, and I play myself, the companies went about it the wrong way. They performed illegal actions to keep their business running.
Laws are there for a reason. YOU voted in your governement as I do mine. If you don't vote, you don't really have a say about the governement, and if you DO vote... well... =]
I'm more angry that the companies are being shut down due to poor management and illegal action. Blaming the governement is a normal thing, but don't jut on the bandwagon if you don't have any other answers... think logically and blame the root cause-the companies that went against the rules.
If the root cause IS your governement... then do what you can as a voter. Find out what it takes to change a law and follow the steps to making it happen (and if it is even possible). Is it a long process? Maybe... but the question is, how bad do you really want it? How much are you willing to research and how much are you willing to sacrafice to fight for change? Don't let someone else do it and then bitch and moan on a forum about it, hoping that it will change.
I hope I get my money back also...
D. C. is trying to set up US poker in their cities.
Makes no sense to me.
Thank you Gurl. I agree with your post entirely.
I sincerly do feel badly for the folks who had legimate monies due them to ever get them back. BUt then again, illegal is illegal and they were an accesory to this crime knowingly or not. I thank the Feds for stepping in, its no different then the Bernie Madoff scam, sometimes the Govt is looking beyond their noses at the bigger picture.
That stinks, I used to go on there to play for fun. I would never play online poker games or similar games becaue you don't know who is real and who is a robot.
Well, just removed it from my computer, 44 MB recovered, yippee!
You know, the Government can add a 5% tax per deposit, so let's say if you deposit $200.00 into your account, they get $10.00. Well, knowing this Government, it would be like 6.237 %, you know, some stupid number.
Please, can someone tell me how to do the "RB wheel" for Texas?
I thought that shutting down the illegal sites would be one of the steps they will take to bring back legal online gambling. Just thought I had read that. Oh well, doesn't matter. As soon as they shut down these three sites, six more will replace them.
"They performed illegal actions to keep their business running."
Maybe Canadians are guilty until proven innocent but the U.S. Justice Department hasn't entered into the plea phase let alone a trial. What ever the poker sites did, it was to help Americans find a way to spend THEIR MONEY playing online poker. Those businesses are running fine today just without any American playing.
"I thought that shutting down the illegal sites would be one of the steps they will take to bring back legal online gambling."
First of all the sites are legal foreign businesses and secondly the Justice Department has no jurisdiction to prevent anyone but Americans from playing. The Internet gaming bill purposed by Harry Reid would require foreign owned poker sites to not allow Americans to play after 30 of passage and another 16 months or until the time they are granted a U.S. gaming license.
There are over 160,000 foreign players on Pokerstars right now. The only thing shut down are Americans playing for real money on any of the sites.
I went to download full tilt onto my new computer and it wouldn't let me..now I know why!!
Where do you people get off talking about the New Black Panthers intimidating voter in a predominated Black polling place . Who were they trying to scare away Black People . Then they probably were working for the Republicans that their tactics.Neverless Black People wasn't afraid.Beside what's your worry, you people have all the guns. God knows you people( militia,tea party,conservatives and Republicans)build up an arsenal since the election of a Black President. You might as well fly the Confederate flag.
Naw, we're not guilty until proven innocent, but I'm sure we'd be shut down during an investigation as well if we were suspected of breaking laws... let's just see what comes out of it.
Canadians and other countries are use to being censored from American websites and video games, etc... this is not new to us, and I'm sure some of us also find ways to skirt the laws for those, but you'd still have to expect to pay the piper if you get caught, or if they crack down.
They're not going to let it keep running while they look things over :)... it doesn't matter who's money it is...
This totally sucks. Does anyone know if people in Canada or Mexico can play on betslips?
I wonder if it is as simple as setting up a bank account in those countries and then logging in with a proxy server located in canada. All of this can be had at minimal cost. I just know they are coming after the *other* site so I think its prudent to keep future options open.
"Naw, we're not guilty until proven innocent, but I'm sure we'd be shut down during an investigation as well if we were suspected of breaking laws... let's just see what comes out of it."
You're confusing the Pokerstars website with the actual poker games site. The poker games site was never shut down and the information given to U.S. Pokerstar players was shown two pages ago. Simply put, Americans can't wager on that site or any other, but the rest of the World can.
"Canadians and other countries are use to being censored from American websites and video games, etc..."
Did you actually read the article?
It's not about Americans censoring the rest of the World or the World censoring Americans.
Because of U.S. Government regulations, Americans can't play for real money on those sites, but they can still watch the rest of the World play or play using imaginary free money.
If you check the poker news it says the sites are back up at www.fulltilpoker.co.uk and www.pokerstars.eu, it seems everything is back to normal except US players can't deposit for now. I really hope they find another payment processor soon.
New York has won 2 Powerball Jackpots since 12/25/2010 & 5 Mega Millions Jackpots since 5/25/2010 !
I would like to know the odds on that !
I sense something rotten !
This is some bullsh..t ! The government is always looking to get their greedy azz hands on everything ! I hate the fact that Online gambling is not legal here in the good old USA. If it were it would benefit the country in more ways then one. I hate the fact that this happened because I enjoy playing poker online because its much easier then going to a casino which for me is 8 hours away ! There is no gambling with the exception of State lottery here in boring azz North Carolina ! This luxuray of playing a game that I have learned to play well enough to make a profit has been snatched away from me ! Darn government knows how to ruin it for everyone !!!
While during my taxes, I noticed that gambling and lottery winnings has been added to the list of monies that are subjected to my city taxes this year.
Until these online gambling businesses come up with a way to pay taxes same as legal local businesses, they are going to be illegal. Federal, states and local governments aren't going to allow them to take millions of dollars out of their communities and not give anything back.
I must have missed something because pokerstars is up and running fine, I'm playing on it as we speak? from what I read the top three sites including pokerstars was shut down? What's the story?
It's called bad News reporting!
Pokerstars dot com, Fulltilt dot com, and Absolute poker dot com were all seized and shut down by the FBI. Their poker room sites never shut down and it's business as usual for everyone outside the U.S. I'm assuming you're playing for free money because Pokerstars won't let any U.S. player play for real money.
So many different comments, however, no one is commenting on the "acutal charges" of fraud these sites conducted in the transactions of money in and out. How come?
Some call it fraud.
Some call it being creative.
It's a dance that some learn in order to do what they want and keep what they have.
People in government think it's their job to keep people from doing what they want and they like to confiscate a portion of what they have.
They're obviously wrong but for some reason we put up with it.
ya pokerstars is up and running but friday they no longer let United States players play for real money just for fun ...I have 40 dollars in acount but cant use it ,,,,,,,they tell me my money is safe so i guess i will be cashing out all my chips soon...you could still play for money friday night on fulltilt but come sat morning i could no longer get on sight to play for fun even,,,,, it asked me if i wanted to update account which is common just about every day and then it said it couldnt download.....so i tried it again and this time i clicked no to update and it wouldnt do anything....i got thier new website from another LP member because thier old domain name was siezed by FBI ...the new website gave a phone number to contact them , but it looks like no United states players can play for fun even now...I am on 2 other small time poker websites ultimate bet and intertops and you can still play for money there....the took the big dogs down first and im sure next they will go after all the smaller poker wesites soon ....its sad the profesional players and part timers cant play anymore ,,think about all the money they put in the economy here...some players will move and some will stay an figure out another way past roadblock.
Wow that is a shame.
I am wondering with all this and that going wrong and the government and businesses in turmoil if they will soon allow more states to have casinos.
Living near Nashville I can make it to Tunica MS or Metropolis IL pretty quick -- 2 or 3 hours (or even fly to Vegas via Southwest, directly), but it is still pretty far to go. But many folks are much further away than that.
I think every state, or maybe every other state should have a casino. They could regulate it, get their share and let everyone be happy.
At least we have lottery, I guess..
I don't think they'll go after sportsbooks, with the exception of maybe Bodog. Sportsbooks aren't as big as poker sites. So far they're all up and running still.
im so glad its shutdown i deposited about 1,500.00 on it and live on a fixed income i though i would try my luck on poker online at first it was ok than about4/1/2011 i could not win hardly win any hands it was like playing a comp.last monday after i lossed all my money monday date was 4/11/2011 i started to watch other players i noticed HWGDF playing at about 20 tables and winning on all of them this player was only playing 5.00 and up tour.and sit go tables B.S i have lots of other names,and how can a person get beat 95% of the time i have aa ak u know play the good hands just to get beat on 4 and 5 cards by 5,j not even suited isendFTP EMAIL ON 4/11/2011 and told them to please send my money back to my bank i got no reply no money back what A SUCKER I WAS I hope they all get fryed now i have got to get back on my feet again FRY THEM BASTER , P.S IF POLICE OR F,B.I NEED THE NAMES CONTACT ME USERNAME COULD BE TRACKED BACK TO ALL THE CHEATERS
Why didn't you report it to the sites themselves so they can look at hand history. The police can't do a thing about offshore sites.
I didn't have such a problem. I won a lot, lost a lot....in the end won more than I lost.
Is your friend ok? That's a great amount of extra income each month....but when it's gone households can change quickly. Glad I don't play poker and was a member of that site; winning that amount of money monthly...I would be totally devasted!!!!!!!!
This government can not stand the thought of someone making money without confiscating some as tribute to their gross mismanagement of the money they confiscate from us.
I'm not sure what the law is today, but, in my younger days, I was always perimtted to deduct my gambling losses from my gross income as long as I had proof on paper that I had actually lost the money. My winnings, of course, fell into the classification as taxable income. And this is the thing about online poker - can one get a written statement of winnings/losses? If you can't, you're screwed by law.