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US Gambling Enforcement Summary 5/24/11

Black Friday indictee pleads guilty, and a covert e-cash processing company used by the feds
U.S. enforcement agencies kicked off the week with more indictments Monday and a guilty plea from Black Friday accused Bradley Franzen (41).
Franzen, described in the April 15th federal indictments as one of several "highly compensated payment processors" that helped online poker companies to circumvent the UIGEA, appeared in a New York federal court Monday.
Reuters reports that he pleaded guilty to helping large online poker websites dodge U.S. gambling laws by processing millions of dollars in payments from his home in Costa Rica and lying to banks about the nature of the transactions.
Franzen faces criminal charges of conspiracy to commit bank fraud, conspiracy to commit money laundering and being part of operating an illegal gambling business, on which he could receive a possible maximum prison term of 30 years.
The erstwhile payment processor was among 11 people named by federal prosecutors in New York on Black Friday, when authorities seized the Internet domain names for Absolute Poker, Full Tilt Poker and PokerStars, alleging that some $3 billion had been unlawfully moved through the US banking system.
During the plea hearing Franzen told the court he was contacted by an Internet poker company in 2009.
"I was aware that most U.S. banks did not process the payments ... and I understood U.S. law prohibits it," he admitted.
Asked by U.S. Magistrate Judge Kevin Nathaniel Fox how much money was involved, Franzen said: "I do understand in general terms that it was millions of dollars, but I don't know how much." He said he conducted most of his business from his residence in Costa Rica.
Franzen's lawyer declined to comment on the contents of what the judge described as "agreements and understandings" with the government that are contained in a May 10 letter, suggesting that Franzen has agreed to collaborate with the authorities.
Franzen's guilty plea was followed late afternoon Monday by reports of further US enforcement actions in which two new indictments were unsealed by federal officials, charging two businesses and three people with operating an illegal gambling business and money laundering.
10 Internet domains were seized under a court order in the latest action, including, and Funtime
Eleven bank accounts were also seized in the United States, Guam, Panama, Malta, Portugal and the Netherlands.
Those charged include ThrillX Systems Ltd, which was doing business as BetEd; K23 Financial Services, which was doing business as BMX Entertainment; Ann Marie Puig of Costa Rica, and Darren Wright and David Parchomchuk of Canada.
The case is believed to be related to the prosecution of Australian e-cash processor owner David Tzvetkoff, who is understood to have collaborated with federal authorities. The cases are USA v Tzvetkoff et al and USA v Franzen, U.S. District Court for the Southern District of New York, No. 10-336.
Throughout Monday afternoon and evening EST the details around the new indictments were developed widely across the media, with the Baltimore Sun reporting that Baltimore-based federal investigators were behind the latest moves...and that the feds had set up a covert e-processing company of their own in a two year sting operation leading to the new indictments.
The faux federal processor - Linwood Payment Solutions - was set up by Homeland Security Investigations - normally associated with anti-terrorism activities - in Baltimore, reports revealed.  The HSI is a division of U.S. Customs and Immigration Enforcement.
It reportedly handled $33 million in financial transactions involving online gambling as the investigation progressed, leading to the indictment of two online betting companies and their international owners.
"It is illegal for Internet gambling enterprises to do business in Maryland, regardless of where the website operator is located," Maryland U.S. Attorney Rod J. Rosenstein said in a statement Monday. "We cannot allow foreign website operators to flout the law simply because their headquarters are based outside the country."
Linwood Payment Solutions is described online as 10 years old, with 15 employees and annual sales of $760,000. A half-dozen Internet gambling companies ultimately relied on it to handle transactions over the past two years.
The Utah-incorporated company claims to have "over 10 years of team industry experience" on its Web page, Payment Processing
Only has so far commented on the clampdown.
The money made from illegal Internet gambling often funds organised crime, claimed William Winter, the special agent in charge of Homeland Security Investigations in Baltimore. "Together, with our law enforcement partners, we will disrupt and dismantle organizations that commit these crimes, regardless of their location," Winter said.
Court records claim that ThrillX and K23 run illegal gambling businesses based outside the U.S., but that they mostly deal with American customers, relying on third-party "payment processors" to move money between their companies and the gamblers.
The federal authorities have issued a comprehensive public announcement on the latest investigations at, and the affidavits associated with the new indictments can be viewed here:
The federal statement confirms that a federal grand jury has returned indictments charging two gambling businesses and three defendants with conducting an illegal gambling business and money laundering, and that as part of the investigation, 11 bank accounts located in Charlotte, North Carolina; Guam; Panama; Malta; Portugal; and the Netherlands; and domain names associated with 10 internet gambling sites were seized.
The following internet domain names were seized:
 Perhaps the best known of these is Doyles, an online poker site associated with poker veteran Doyle "Texas Dolly" Brunson which has operated on several online poker networks over the years.  Brunson recently distanced himself from the site.
The use of a covert processing company is confirmed in the federal announcement, along with allegations that last year a Maryland-based online gambler and 'cooperating informant' confirmed that he/she frequented gambling sites, opened accounts and gambled in Maryland.
"The gambler agreed to set up online gambling accounts and was provided $500 to place bets on gambling websites," the announcement recounts. "The gambler created an account on a BetEd website and placed several bets. On March 30, 2010, BetEd used Linwood to wire transfer $100 in winnings to the gambler’s bank account," the statement reveals.
Linwood allegedly processed gambling transactions since 2009 for BetEd, K23 and other gambling organisations using banks located in Guam and Charlotte, North Carolina.
According to the affidavit, between December 2009 and January 2011, Linwood processed over 300,000 transactions worth more than $33 million, including transactions for individuals in Maryland.
Between February 2010 and March 2011 alone, BetEd directed Linwood to wire transfer over $2.5 million of collected gambling proceeds to bank accounts in Panama; and between February 2011 and April 2011, K23 directed Linwood to wire transfer over $91,000 of gambling proceeds to bank accounts in Portugal and Malta.
"The defendants face a maximum sentence of five years in prison for operating an illegal gambling business and a maximum of 20 years in prison for money laundering. No court appearance has been scheduled," the statement concludes.
Online gamblers were quick to link the latest actions with the payment difficulties currently being experienced through QuickTender and alleged parent Ecocard, finding at sections 10 and 11 of the indictment that the accounts of a company called Chargestream Ltd in the Netherlands are among those that have been frozen.
One of the companies associated with the seized domains, issued an apparently defiant press release Monday night confirming it had "temporarily" lost the rights to the domain.
"We are confident that in time, it will be returned to us, until then, we have launched a new, temporary site:," the company announced.
"Despite having lost the domain, none of the business operations have otherwise been affected. Player account balances and information are safe and secure. Effective immediately, players can log on to and it's business as usual.
"You likely won't notice any other changes at all and will experience all the same features and benefits as our original site; just on a new address.
"We sincerely apologize if you were affected by our interruption. As always, if you have any questions or concerns please call our customer service department".

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William Hill Chairman Not Stepping Down - There are no plans for Gareth to step down. He is leading the CEO search process, which is well advanced, and is working with Philip Bowcock to deliver the key priorities for the business.

Canadian Lottery Looking at Online Gambling - The reaction of other provinces is not known, but the Newfoundland and Labrador government was apparently less than enthusiastic about the prospect, which it did not regard as a priority.

Red Riding Hood Online Slot Launched - The game, which has already attracted much preview interest, is part of the developers Fairytale Legends series, which the company plans to expand with further titles in 2017.

Super Heroes Slot Launches - When the feature is triggered, two of the heroes appear on each side of the screen to boost winnings. During free spins, heroes are triggered on every spin, with their super powers growing stronger each time.

SIS Stream To Deliver racing games to online customers - Online and retail betting industry provider SIS has signed a multi-year deal that harnesses the power of its SIS Stream product to deliver 49s-branded racing games to online customers.

Playngo in Deal With Betclic Everest Group - Swedish online gambling games developer Play’n GO has signed an agreement with the Betclic Everest Group that will see its full suite of games rolled out across the French group’s online casino brands.

2016 Italian Poker Tour main event in Malta - After besting a field of 775, many of them respected aces, Austrian poker pro Ismael Bojang claimed the main prize of Euro 101,940 over the weekend in the eighth edition of the Euro 1,100 buy-in Italian Poker Tour main event in Malta.

Betradar in Deal with OPAP - Sports betting data and analytics provider Betradar has inked a live betting supply deal with the major Greek licensed retail and online gambling operator OPAP.

2016 888poker Make It Big Tournament - A relatively unknown Hong Kong poker player, Ka Him Li (21), claimed victory after a two-way chop in the main event at the inaugural 888poker “Make It Big” live poker festival at the Aspers Casino in London over the weekend, earning the top prize of GBP 45,300.

Lightning Box Games in deal with WIlliam Hill - Sydney-based slot design specialist Lightning Box Games has signed an agreement to supply its content to William Hill’s licensed betting offices in the UK.

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