Thursday June 27,2013 : UTAH BANK UNDER INVESTIGATION FOR ALLEGED ILLEGAL ONLINE POKER PAYMENTS
Tens of millions of dollars said to be involved
The United States Attorney's Office for New York is not done with its crackdown on US online poker yet, it appears from US media reports, which indicate that federal officials are investigating the Zion Bank in Utah on allegations of processing tens of millions of dollars in illegal online poker payments in the mid-2000s.
The reports quote court documents filed by the federal authorities that claim a local businessman named as John Scott Clark was involved, and that the bank assisted him in transmitting around $150 million to overseas destinations.
Clark also stands accused of operating an illegal Ponzi scheme, in which the Securities and Exchange Commission's Salt lake City office says that investors were promised extraordinary returns whilst Clark was actually using their money for personal projects such as motor vehicles, art works, snow mobiles and home improvements.
SEC official Ken Israel said, "Clark recruited new investors through referrals from earlier investors who thought the Ponzi payments they received were actual returns on their investments, and sought to share the lucrative opportunity with family and business associates.”
The reports note that last year Clark pleaded guilty to four charges of conspiracy and obstruction of justice associated with the processing of millions of dollars of illegal payments to online poker companies. He was sentenced in December to time served – around a week following his arrest back in 2009.
The court documents appear to suggest that Clark may be cooperating with federal investigators in the online payment processing issue. There are also indications that Zion may have handled accounts involving Jeremy Johnson, whose name has featured in previous processing cases.
In advising that investigations were underway, a Zion Bank spokesman noted that the bank takes considerable trouble at substantial cost to stop illegal or fraudulent use of the bank facilities
"Obviously we process millions of transactions, and there are situations that develop over time where we perhaps have given customers the benefit of the doubt and, in retrospect, perhaps that trust was misplaced," he said.
In 2011 Zion Bank was fined $8 million by federal authorities for failing to properly monitor foreign customers in a case that included $7.9 billion of wire transfers to Latin America from 2006 to the end of 2008, an operation that has since been shuttered.