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REACTION TO ONLINE POKER PROSECUTIONS
Written On 4/16/11 By Recentpoker.com staff writer Frank Polliern :
Repercussions already being felt
Friday's shock indictments and domain seizures targeting some of the Internet's biggest online poker operators have been massively reported in the mainstream media, and have resulted in some immediate follow-up stories.
One of the biggest was the speed with which Wynn Resorts distanced itself from Pokerstars, one of the companies listed in the federal indictments. Within hours of the indictments being unsealed, a spokesman for Wynn Resorts, Michael Weaver, announced that his company’s proposed internet venture with the world's biggest online poker company was off.
The deal, signed less than two weeks ago, was dependent on federal legality and could have resulted in a substantial internet poker presence in the United States.
Weaver announced that Wynn has terminated the alliance as a result of the indictment.
Meanwhile, Australian media speculated that the collaboration of Intabill's Daniel Tzvetkoff, the owner of an Australian-based e-cash processing company bust whilst visiting Vegas last year, may have been key in building the federal case against online poker companies and associated processors.
Certainly, Tzvetkoff would have been familiar with the commercial ruses allegedly used to circumvent the UIGEA in the United States, and one of the more serious aspects of the charges is centred on bank fraud.
In another report, Full Tilt's equally recent partnership with Fertitta Interactive, whose owners have been connected to Station Casinos, also came under the microscope, with Fertitta spokesperson Caren Bell reiterating that its collaboration with Full Tilt Poker was contingent on federal legality.
The Poker Players Alliance was quick to comment as well, with it chairman, former Senator Alfonse D’Amato, saying: “On behalf of the millions of poker players across the country, we are shocked at the action taken by the U.S. Department of Justice today against online poker companies and will continue to fight for Americans’ right to participate in the game they enjoy.
"Online poker is not a crime and should not be treated as such. We are currently gathering all of the information around today’s announcement and will offer detailed analysis when the full facts become available.”
Player forums around the internet were active with recommendations from players to their US contemporaries that it may be smart to withdraw monies, at least until the dust has settled.
One of the federal initiatives has involved filing a civil lawsuit seeking $3 billion in money laundering penalties and alleging that online poker companies disguised money they received from U.S. poker players as payments to online merchants selling jewellery and golf balls.
In actions clearly connected with the main 51 page indictments Friday, the federal authorities in Las Vegas and Utah arrested two men, payment processor Chad Elie (31), and John Campos (57), a part owner of a small bank.
Another payment processor, Bradley Franzen, is to be arraigned in Manhattan next week.
Others named in the indictment and associated closely with the companies concerned are reportedly based outside the United States and are presumably at this point beyond the physical reach of US law.
Some of the allegations read like a cloak and dagger novel, outlining the creation of fictitious businesses such as flower shops and pet centres which allegedly helped move financial transactions, along with elaborate debit card schemes.
The evidence assembled suggests that much of the information has come from previously indicted processors who have cooperated with federal investigators in order to ameliorate their own punishments.
Legal experts have observed that litigation around the latest federal action is likely to be more concerned with financial and banking wrongdoing rather than legality issues around internet poker per se.
The US Attorney for Manhattan, Preet Bharara, gave an indication of the prosecution's strategy when he 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".
Full Tilt Poker posted a general advisory on the developments, telling interested parties:
"In light of recent events involving the freezing of certain accounts, Full Tilt Poker would like to assure all players that their funds remain safe and secure. Processing of both deposit and withdrawal requests is proceeding as normal and is still available to all of our players.
"All players who were affected by the current situation have had their funds returned to their accounts and all new withdrawal requests are processing normally. We assure all players on Full Tilt Poker that your online playing experience will not change and that you will be able to both deposit and withdraw funds as needed. Your money remains safe, secure and accessible at all times.
"Full Tilt Poker remains committed to the protection of our players’ security and legal rights, and will continue to provide the best and safest online poker room available worldwide."
The many players who remain interested in the historic hole card scandals at Absolute Poker and UltimateBet have commented on one name in particular in the indictment; that of Scott Tom.
This at times enigmatic figure is often claimed to have been involved in the cheating scandal, and was allegedly an early manager of the affairs of the poker companies. Players will closely watch what emerges from the prosecutions in the hope that more information on his role in the scandals will be uncovered.
The federal indictment names Isai Scheinberg and Paul Tate (PokerStars), Raymond Bitar and Nelson Burtnick (Full Tilt Poker), and Scott Tom and Brent Beckley (Absolute Poker) among others.
As we went to press, US players were reporting that the Pokerstars website now reroutes to a page redolent with Department of Justice seals and warnings.
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