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It appears that US law enforcement action is at the root of Instant eCheck problems reported by major online poker sites PokerStars and Full Tilt Poker late last week .
The online poker action group Poker Players Alliance took the lead in issuing a statement on the issue this week which achieved major mainstream press coverage through the Associated Press news agency.
In the statement, PPA chairman Alfonse D'Amato characterised as questionable the actions taken by a federal prosecutor in the Southern District of New York to freeze payment processor accounts containing more than $30 million in poker players' deposits and payouts.  SuperSlots
The PPA also sent a letter to the Assistant United States Attorney for the Southern District of New York asking for an opportunity to be heard in any future warrant hearings.
In its statement, the PPA comments: "The PPA is disappointed that this unprecedented action has been commenced against law abiding poker players. The payment processor funds frozen by the Southern District of New York belong to individual poker players – not operators of poker websites – and do not represent the proceeds of any gambling activity, much less illegal gambling activity.
"This money should be immediately released by the Southern District to ensure that player payouts are not further disrupted. To that end, the PPA is coordinating a legal strategy to appropriately protect PPA members who are impacted by the Southern District's actions. Further, the PPA has contacted the affected poker websites and has been informed that deposit and payout issues of players are being addressed and will be fully satisfied.
"There are many legal issues that question the merit of the Southern District's actions. Of greatest concern is that, in at least two cases, these actions were taken without first obtaining a seizure warrant. Seizure of money without judicial authority and litigation tactics inconsistent with previously stated Department of Justice policy appear to be the type of conduct that the Department has recently committed to change. Accordingly, the PPA on June 8th wrote to the prosecutor in charge of the matter and raised appropriate challenges and constitutional concerns with the actions taken to date.
"We are also concerned that the Southern District has selectively taken action against online poker when the current law regarding the activity is far from clear, and policies from various levels of government are inconsistent at best. In fact, no federal or state court has ever found a payment processor or a player accessing an Internet poker site to have violated the federal laws alleged by the Southern District in this case.
"For more than three years the PPA has advocated for a clear US policy, established through licensing and regulating skill games like peer-to-peer Internet poker. The PPA remains committed to legislation that creates a clear regulatory framework and we will continue to pursue every legal course available to ensure that in this instance poker players' funds are not seized and their right to play online poker is protected."
Taking up the story, Associated Press reported that it had seen documents showing that a Southern District of New York judge had issued a seizure warrant last week for an account at a Wells Fargo bank in San Francisco, and that a federal prosecutor told a bank in Arizona to freeze another account. Apparently the prosecutor informed the Alliance Bank of Arizona that accounts held by payment processor Allied Systems Inc. are subject to seizure and forfeiture "because they constitute property involved in money laundering transactions and illegal gambling offenses."
“The FBI has authority to seize proceeds of specified unlawful activity without a warrant under exigent circumstances,” another enforcement letter read.
The letter was signed by Arlo Devlin-Brown, the assistant U.S. attorney for the Southern District of New York. Devlin-Brown went further, claiming that the funds were "legally seized" by the FBI because the US government has "probable cause that the gambling payments of U.S. residents had been directed to offshore illegal Internet gambling businesses". 
In a letter sent to Devlin-Brown on June 8 and referred to in the PPA statement, John Pappas, executive director of the Poker Players Alliance, asserted that the seized funds belong to the Alliance's members, and requested that his group be notified and given the opportunity to be heard regarding attempts to seize the frozen funds.
The PPA letter advises Devlin-Brown that “seizure of Allied Systems’ bank accounts would constitute a violation of due process because there are no exigent circumstances to justify deprivation of PPA members’ property without prior notice and a hearing.
"The PPA will pursue every legal course available to ensure that poker players' funds are not seized and their right to play poker online is protected," Pappas wrote.
It is not known whether Devlin-Brown responded to the PPA executive.
Reporting on the seizure, the Wall Street Journal confirmed that federal authorities in New York had frozen or seized bank accounts worth $34 million belonging to 27 000 online poker players.
The respected international business publication revealed that the enforcement operation began last week, when the office of the U.S. Attorney for the Southern District of New York froze or issued seizure orders for bank accounts in Los Angeles, San Francisco and Arizona held at Wells Fargo, Citibank, Goldwater Bank and Alliance Bank of Arizona.
Approached for comment by the WSJ, a spokeswoman for the U.S. attorney's office declined to provide frther information.
The WSJ claims that the frozen accounts are managed by Allied Systems Inc., and Account Services, which handle cash for popular online poker sites, including Full Tilt Poker, Poker Stars, Ultimate Bet and Absolute Poker. Though the money belongs to the poker players, it is held for them in accounts managed by the two service companies.
According to WSJ reporters, Account Services, which had an account worth $15 million frozen in its San Francisco bank, doesn't accept deposits, but writes checks to players who are cashing out, said a lawyer for the company, Jeff Ifrah. As a result, thousands of players receiving checks from the company won't be able to cash them, he said.
Associated Press also reports that in addition to the moves by Devlin-Brown, a grand jury subpoena was issued last week to Allied Systems, seeking information on communications, financial transactions and processing services between the company and Internet gambling operations. The subpoenas also seek corporate records and bank accounts.

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