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US federal prosecutors are reportedly preparing their most comprehensive case yet that online poker is illegal
The Black Friday indictment of individuals connected with Pokerstars, Full Tilt Poker and Absoslute Poker has given US federal prosecutors their best opportunity yet to defend and promote their oft-stated opinion that online poker is an inherently illegal activity in US law...and according to reports in Forbes magazine this week they intend to make the most of it.
The publication reports that on Friday federal prosecutors in Manhattan filed a comprehensive 51-page document in response to the pre-trial motions of indicted banker and payment processor, John Campos and Chad Elie. The rationale behind the duo's application to dismiss the DoJ charges is that online poker companies like PokerStars and Full Tilt Poker are not gambling businesses.
"John Campos, a former vice-chairman of a Utah bank, and Chad Elie, who ran a payment processing business, are the only two individuals who have directly stood up to U.S. Attorney Preet Bharara’s April crackdown on the online poker industry in the U.S., which included the indictment of 11 individuals. It is because of Campos and Elie that the government is being forced to litigate its case against online poker for the first time," Forbes observes.
In their latest response, federal prosecutors claim that Campos, Elie and the rest of the U.S. online poker industry, are wrong in their contention that poker is a game of skill and not chance - a fundamental difference that draws the line between the definition of what is illegal gambling and what is not.
The federal document references some exotic points in drawing its conclusion that online poker is illegal; in one passage the general understanding that poker is generally viewed as gambling is illustrated by referring to popular country and western music on the pastime. In another, the federal litigators claim that a mafia associate was involved in processing payments for the poker companies, and was at one point called upon to assist in collecting $4 million from Elie.
The defence attorneys will probably want to address the latter, with its dangerous connotations of organised crime involvement in the industry.
Forbes reveals that the new federal document also contains some interesting items of fresh information, including that PokerStars founder Isai Scheinberg, pursued Elie for stealing, after Elie transferred some $4 million from a poker processing account at the National Bank of California to himself. The legal document says Elie paid some of the money back, after which Scheinberg hired Elie to process more transactions.
The government also claims that after the authorities shut down covert e-payment solutions used by the poker companies, PokerStars and Full Tilt started to pursue “transparent processing” that did not rely on false disclosures to banks.
Elie was tasked with the job and found SunFirst, Campos’ Utah bank, which processed $200 million of payments for PokerStars and Full Tilt Poker in exchange for fees and an investment until the FDIC blocked this processing channel in November 2010, creating major difficulties for Full Tilt in particular.
Elie is alleged to have assisted in addressing the problem, finding two distressed banks in Illinois and promising them investments if they would cooperate, but this channel, too, was shut down by the FDIC, exacerbating Full Tilt's already acute problems - the company was allegedly crediting player accounts despite the fact that it had no effective means to actually take in the money.
The federal case will apparently also depend on the extent to which the judge accepts the Justice argument that the US Congress did not intend to exclude poker from the Unlawful Internet Gambling Enforcement Act of 2006, and that if Congress had wanted to exclude the pastime; it would have done so in a clearer and unambiguous fashion.
Other arguments address the relationship of poker to other gambling activities as defined in the Gambling Business Act; on technical jurisdictional issues; and on a claim by Elie that his actions had not caused loss or damage to the banks involved.
On the latter, the government counter-claims that deceptive e-check processing did expose banks to loss because the payment systems allowed customers to reverse e-check transactions long after they occurred and robbed banks of their right to make a decision over whether such business was worth accepting.
The government sums up its case by claiming that the online poker companies “engaged Elie and Campos, among others, to perform an indispensable service: find ways, by hook or crook, to move money from United States residents, through the United States financial system, to the offshore accounts of the poker companies. They did so in violation of IGBA, the UIGEA and other federal statutes.”
In related news, the main federal driver of the case, U.S. Attorney for the Southern District of New York Preet Bharara, has agreed to an extension of the response deadline for Full Tilt Poker, PokerStars and Absolute Poker in the $3 billion federal civil complaint issued on Sept. 20, 2011.
The previous deadline faced by the three defending companies was October 31, but they have since been granted until the end of November 2011 to present their counter-arguments. This is the second extension granted - the first expired at the end of September.
The extension also applies to indicted payment processor Chad Elie.

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Marks and Spencer store Manager steals to Gamblie Online - The Cambridge News reports that a 28-year-old manager of a Marks and Spencer store, Martin Trenor, has been jailed for three years for stealing GBP 254,538.11 in shop takings over the course of a year and spending it almost immediately at online gambling websites.

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2016 EPT Malta - The European Poker Tour is off to a good start in Malta, with German pro Dietrich Fast claiming a well-earned Euro 174,000 main prize in the Euro 10,000 buy-in Single-Entry Rebuy event.

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