Feds Go All In Against Online Poker Sites, Seize Domains, Issue Warrants

If you are an online poker player using PokerStars.com, you would have found the site had been seized Friday and a Department of Justice notice was there in place of your normal access page. While online gambling has been illegal in the United States for five years under the UIGEA (Unlawful Internet Gambling Enforcement Act) that prohibited online gambling sites to operate in the United States and financial institutions from transferring money to or from any online gambling operation, there has been a push to legalize it recently.

Full Tilt Poker and Absolute Poker were also seized on what bloggers and marketers of online poker services are calling Black Friday,


Eleven people were indicted though many are out of the country and have yet to be served. “In addition to the individual charges of bank fraud, money laundering and illegal gambling, the feds seized five domains and issued restraining orders against 75 bank accounts in 14 countries allegedly used to process payments. The U.S. attorney also is seeking $3 billion in damages, and sentenecs for the defendants of up to 30 years in prison plus million dollar fines.” AVN reported.

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

An Australian newspaper reported that the information for the arrests could have come from a credit card processor who had been arrested last year and was cooperating with the government to reduce his own sentence. “Daniel Tzvetkoff, who had been facing 75 years jail in the US, has done a deal with prosecutors which has seen him freed on bail and living in a secret New York location.” the Courier Mail reported.

“In the indictment, federal prosecutors say they arranged for payment processors with bank accounts in the US to receive payments from US gamblers and disguise them as payments for products such as jewelry or golf balls.

Of the billions of dollars in payment transactions that the Poker Companies tricked US banks into processing, approximately one-third or more of the funds went directly to the Poker Companies as revenue through a charge players must make on almost every poker hand played online.

That scheme worked for a while until some banks caught on. By 2009, they had shut down many fraudulent bank accounts used by the poker companies. Two of the defendants later came up with a scheme to persuade the principals of a few small, struggling banks to process payments in return for multi-million investments.”

The interesting part of this is that there have been moves to legalize gambling online both federally and by individual states. Revenues from this could bring as much as $2.5 billion in new tax revenue each year.

The impact on affiliate marketing has yet to be seen, and the loss of money people had in their accounts at the time of the seizures may never be known as people fear repercussions.


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