Payment processor Ira Rubin has pleaded guilty in Manhattan federal court to money laundering, bank and wire fraud, and gambling offenses in connection with a scheme to deceive U.S banks into processing hundreds of millions of dollars in online poker transactions.
Preet Bharara, the U.S Attorney for the Southern District of New York, said that Rubin helped process payments for three of the largest internet poker companies, Pokerstars, Full Tilt Poker and Absolute Poker, by disguising transactions so that they would appear to be on behalf of non-gambling merchants selling clothing, jewellery, sports equipment and other items.
Rubin, a U.S citizen who had been residing in Costa Rica since 2008, was detained in Guatemala on April 26th 2011, and then transferred to the U.S in connection with the indictment unsealed on April 15th that charged him and ten others with crimes relating to the illegal operation of three internet poker companies.
According to the indictment, Pokerstars, Full Tilt Poker, and Absolute Poker turned to third party payment processors following the enactment of the UIGEA as U.S banks were largely unwilling to process internet gambling payments. These third party payment processors, including Rubin, were willing to disguise the payments so they would appear to be unrelated to internet gambling.
The DoJ said that in mid-2008, Rubin, together with co-conspirators, created dozens of phony e-commerce websites purporting to sell everything from clothing and jewellery to golf clubs and bicycles. In reality, these sites were used to disguise Pokerstars’ online poker transactions.
Between 2008 and March 2011, Absolute Poker also used Rubin at various times to process echecks disguised as, among other things, payroll processing, affiliate marketing, and online electronics merchants.
Rubin committed the charged offenses while in Costa Rica where he has been living since 2008.
Rubin, 53, pled guilty yesterday before U.S Magistrate Judge Gabriel W Gorenstein to one count of conspiracy to violate the UIGEA, one count of conspiracy to commit bank and wire fraud, and one count of money laundering conspiracy.
He faces a maximum sentence of 55 years in prison, and is scheduled to be sentenced by U.S District Judge Lewis A Kaplan on May 17th 2012.
Four other defendants charged with Rubin have appeared in the U.S to date, including Bradley Franzen, Brent Beckley, Chad Elie, and John Campos. Franzen and Beckley pled guilty on May 23rd and December 20th of last year respectively, while Elie and Campos are scheduled to go to trial before Judge Kaplan on April 9th 2012.
The remaining six defendants charged in the superseding indictment remain at large.
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