Friday July 24,2015 : U.S. SECURITIES AND EXCHANGE COMMISSION BUSTS LINKED TO ONLINE CASINO OWNERS
But the questionable online gambling conduct of the defendants is probably the least of their worries.
Reports Thursday in the Israeli media linked a major Securities and Exchange Commission scandal in the United States with the online casino industry, impacting a dozen online casinos in the Affactive, Netad Management and RevenueJet groups, which have abruptly ceased business, leaving both players and affiliates unpaid.
Industry insiders were not surprised by the revelations, given that the online companies involved have become notorious for bad conduct, in particular ripping off winning players, spamming, search engine manipulation and even alleged DDoS activity.
The SEC transgressions involve fraud, money laundering and identify theft allegedly perpetrated through "pump-and-dump" style white collar crime in penny-stock manipulation schemes. The unlawful activity allegedly took place over several years and generated illegal income of around $2.8 million.
It also led to the arrest in Israel earlier this week of Gery "Gabi" Shalon and Ziv Orenstein at the behest of the US Attorney for the Southern District of New York. The duo have been detained without bail pending extradition to the United States.
During the arrests, a search of Shalon’s residence found two million shekels (about USD $520,000) in cash.
It is understood that a third suspect, American citizen Joshua Samuel Aaron is on the run but is believed to be somewhere in Russia.
All three men are known by a number of aliases and are in their thirties.
Bloomberg News linked the indicted individuals to the 2013 hacking of the JPMorgan Chase & Co. investment bankers, when gigabytes of financial information, including customer-account data were stolen.
Describing the fraudulent "pump and dump" stock market activity, a statement from the SEC disclosed:
“Aaron and Shalon allegedly wrote and designed the e-mails, Shalon allegedly disseminated them, and Orenstein allegedly provided essential operational support by handling brokerage accounts using numerous aliases.”
The SEC charges have also resurrected reports last year that Affactive was involved in hacking inactive online publications in order to manipulate and boost Google rankings for its casinos, allegations which Affactive spokesmen have denied.
Read the allegations in detail here: