Three of the largest Internet poker websites are facing a stacked deck.
In a Manhattan court today (April 15), eleven defendants — including the heads of the poker sites PokerStars, Full Tilt Poker and Absolute Poker — were charged with bank fraud, money laundering and illegal gambling.
The government also issued a civil money laundering complaint for $3 billion against the poker companies, their assets and the assets of several payment processors associated with them.
Restraining orders were also issued to seize 76 bank accounts in 14 countries, and to take control of five Internet domain names.
“These defendants, knowing full well that their business with U.S. customer and U.S. banks was illegal, tried to stack the deck,” FBI assistant director-in-charge Janice K. Fedarcyk said in the Department of Justice press release.
“They lied to banks about the true nature of their business,” she said. “Then, some of the defendants found banks willing to flout the law for a fee. The defendants bet the house that they count continue their scheme, and they lost.”
The government’s action today is rooted in the 2006 establishment of the Unlawful Internet Gambling Enforcement Act (UIGEA), which made it a federal crime for gambling businesses to accept payment for illegal gambling.
Located offshore, Full Tilt Poker, PokerStars and Absolute Poker continued to do business in the U.S after the law was enacted, claiming that the U.S. had no control over their financial transactions.
But because of the UIGEA, the poker websites faced difficulties in getting legitimate companies to accept users’ payments, and “allegedly used fraudulent methods to circumvent federal law and trick these institutions into processing payments on their behalf,” the press release said.
In one instance, the operators of Full Tilt Poker and Absolute Poker made the money from American gamblers appear as payments to “nonexistent online merchants purporting to sell merchandise such as jewelry and golf balls.”
If charged with conspiracy to commit bank fraud, wire fraud and money laundering, the defendants each face a maximum penalty of 30 years in prison and a $500,000 fine.