The U.S. Department of Justice has charged the founders of online poker sites PokerStars, Full Tilt Poker and Absolute Poker with fraud and conspiracy in an idictment unsealed Friday morning.
The indictment includes Isai Scheinberg and Paul Tate from PokerStars, Ray Bitar and Nelson Burtnick from Full Tilt, Scott Tom and Brent Beckley of AbsolutePoker. Also charged were Ryan Lang, John Campos, Bradley Franzen, Ira Rubin and Chad Elie who are believed to be working for payment processors. Campos and Elie were arrested Friday morning in Las Vegas and Utah. The DOJ is working with Interpol to secure the arrest of the other defendants.
A total of five domain names, including UB.com, PokerStars.com, FullTiltPoker.com, have been seized by the DOJ. Restraining orders were also issued for 75 bank accounts used by the poker sites and payment processors.
“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 inillegal gambling profits,” said Manhattan U.S. Attorney Preet Bharara. “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.”
The indcitment alleges that the poker companies worked with payment processors to fool U.S. banks into processing payments to and from players. All 11 defendants have been charged with Conspiracy to Violate Unlawful Internet Gambling Enforcement Act which has a maximum sentence of five years in prison, a fine of $250,000 or twice the gross amount won or lost and three years supervised release.
The founders of the three poker sites have been charged with Violation of Unlawful Internet Gambling Enforcement Act , which carries a maximum sentence of five years in prison and a fine of $250,000 or twice the gross amount won or lost and three years supervised release, and Operation of Illegal Gambling Business, which also carries a maximum sentence of five years in prison and a fine of $250,000 or twice the gross amount won or lost and three years supervised release plus the forfeiture of proceeds of offense.
The other charges are Conspiracy to Commit Bank Fraud and Wire Fraud and Money Laundering Conspiracy.
The DOJ is seeking $3 billion in penalties from the companies.
PokerStars has since prevented U.S. based players from accessing any cash games or tournaments on their site.