Days for the profitable business of online gambling seems like over as FBI and US Attorney’s Office charged the founder of three biggest Internet poker web sites with bank fraud, money laundering, and illegal gambling offenses. The sites are – PokerStars, Full Tilt Poker and Absolute Poker. Among the charged are – Isai Scheinberg and Paul Tate of PokerStars, Raymond Bitar and Nelson Burtnick of Full Tilt Poker and Scott Tom and Brent Beckley of Absolute Poker.

 

Manhattan U.S. Attorney PREET BHARARA said: “As charged, 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. Moreover, as we allege, in their zeal to circumvent the gambling laws, the defendants also engaged in massive money laundering and bank fraud. 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.”

FBI Assistant Director in Charge JANICE K. FEDARCYK said: “These defendants, knowing full well that their business with U.S. customers and U.S. banks was illegal, tried to stack the deck. 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.”

Source: www.fbi.gov

 

The feds have seized 5 Internet domain names and issued restraining order against 75 bank accounts. On October 13, 2006, the United States enacted the Unlawful Internet Gambling Enforcement Act (“UIGEA”) which made it illegal to accept money from unlawful online gambling. The companies found ways to circumvent the law and keep getting the payments.

Because U.S. banks and credit card issuers were largely unwilling to process their payments, the Poker Companies allegedly used fraudulent methods to circumvent federal law and trick these institutions into processing payments on their behalf. For example, defendants ISAI SCHEINBERG and PAUL TATE of PokerStars, RAYMOND BITAR and NELSON BURTNICK of Full Tilt Poker, and SCOTT TOM and BRENT BECKLEY of Absolute Poker, arranged for the money received from U.S. gamblers to be disguised as payments to hundreds of non-existent online merchants purporting to sell merchandise such as jewelry and golf balls. Of the billions of dollars in payment transactions that the Poker Companies tricked U.S. banks into processing, approximately one-third or more of the funds went directly to the Poker Companies as revenue through the “rake” charged to players on almost every poker hand played online.Source: www.fbi.gov

The indicment filed in New York, is seeking $3 billion in money laundering penalties and forfeiture from the defendants.

The charged are looking at 5 years in prison for illegal Internet gambling, 20 years for money laundering and 30 years for bank and wire fraud. Most of the charged defendants have been arrested while the rest are still at large.
Still missing online gambling? Why not visit Hustler’s free online gambling site (it is legal since no money involved).

 

Hustler Casino launched its own online gaming site on the same day federal authorities indicted and began to shut down prominent poker hubs Absolute Poker, PokerStars and Full Tilt Poker.

“It’s just one of those phenomenal coincidences that happen very rarely in a marketer’s career where something so monumental occurs in the online gaming community as what happened today,” said Al Underwood, marketing director for Hustler Casino in Gardena. “It opens up a space for us, and people who enjoy this online activity at least have a place to go that is familiar, legal and safe.”

Source: latimesblogs.latimes.com

 

Is this the end of online gambling? Something tells me that this isn’t the end, and new loopholes will be used soon. Makes you wonder, if I can drive down to the nearest Casino (on the nearest Indian reservation) or fly down to Las Vegas to play poker, then why not play it online? Maybe it is time that online gambling becomes legal and the country benefits from the much needed taxes? Wouldn’t regulated and taxed be a better alternative?

 

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