PokerStars, Full Tilt, Absolute Poker busted for fraud, money laundering in FBI crackdown

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The US Department of Justice has charged the owners of three of the largest Internet gambling sites for violating a cacophony of laws, including anti-gambling laws, money laundering and bank fraud, Reuters reports. The sites include Full Tilt Poker, Absolute Poker and PokerStars.

New York prosecutors have issued restraining orders against 76 bank accounts in 14 countries that they say these companies used to launder billions of dollars in illegal gambling funds. Five Internet domains associated with the sites have been seized.

The indictment includes 11 individuals from the three Internet gambling sites. The Justice Department has brought forth a civil complaint for money laundering through which it seeks $3 billion held by the companies. Authorities say these people used “fraudulent methods” to fool banks into processing the funds.

Two of the 11 charged have been arrested, and law enforcement agents expect at least one of the men to turn himself in. Eight others currently reside outside of the United States, and have not yet been brought into custody.

Those charged include: Isai Scheinberg and Paul Tate of PokerStars; Raymond Bitar and Nelson Burtnick of Full Tilt Poker; Scott Tom and Brent Beckley of Absolute Poker; and Ryan Lang, Ira Rubin, Bradley Franzen, Chad Elie and John Campos, all of whom are said to have been involved with processing the illegal funds.

The maximum penalties for the various charges brought forth against these individuals range from five years in prison and a $250,000 fine to 30 years in prison and a $1 million fine.

“These defendants, knowing full well that their business with U.S. customers and U.S. banks was illegal, tried to stack the deck,” Fedarcyk said. “They lied to banks about the true nature of their business. Then, some of the defendants found banks willing to flout the law for a fee. The defendants bet the house that they could continue their scheme, and they lost.”

The crackdown on these sites is expected to have significant effects on the US poker industry, as well as the millions of poker players who used the sites.

“On behalf of the millions of poker players across the country, we are shocked at the action taken by the U.S. Department of Justice today against online poker companies and will continue to fight for Americans’ right to participate in the game they enjoy,” said the Poker Players Alliance in a press release. “Online poker is not a crime and should not be treated as such. We are currently gathering all of the information around today’s announcement and will offer detailed analysis when the full facts become available.”

The man said to be responsible for facilitating the FBI’s investigation of the poker industry is 28-year-old Daniel Tzvetkoff, who became a prized informant after being arrested for masterminding a system for processing illegal funds between US gamblers and websites.

Some Internet gambling sites remain active, however, including Cake Poker and Bodog. PokerStars has relaunched under the domain PokerStars.eu, and is working normally at the time of this writing.

Online poker has been illegal in the US since the passage of the Unlawful Internet Gambling Enforcement Act in 2006.

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