Internet Poker Casinos Busted for Money Laundering & Fraud
FROM THE - JOURNALS of Monte Friesner ~ Financial Crime Consultant for WANTED SA Saturday April 16, 2011>
WANTED SA Investigators & Agents have spent approximately 3 months following leads pertaining to this story. United States Federal prosecutors have laid charges of Bank Fraud, Money Laundering and other gambling offences and are seeking penalties upward of $3 billion.
Federal authorities also froze approximately 76 bank accounts in 14 countries that contain proceeds from the alleged offences. They also shut down five internet domain names used by the three companies to host their games.
A total of 11 defendants, including the founders of Poker Stars, Full Tilt Poker and Absolute Poker, were named in the indictment.
In the indictment, federal prosecutors explain that poker companies operating offshore cannot accept most forms of payment "in connection with the participation of another person in unlawful internet gambling." Since most banks in the US would not process their payments, the companies circumvented federal law by making payments appear to be transactions for other types of merchandise.
In the indictment, federal prosecutors say they arranged for payment processors with bank accounts in the US to receive payments from US gamblers and disguise them as payments for products such as jewellery or golf balls.
Of the billions of dollars in payment transactions that the Poker Companies tricked US banks into processing, approximately one-third or more of the funds went directly to the Poker Companies as revenue through a charge players must make on almost every poker hand played online.
That scheme worked for a while until some banks caught on. By 2009, they had shut down many fraudulent bank accounts used by the poker companies. Two of the defendants later came up with a scheme to persuade the principals of a few small, struggling banks to process payments in return for multi-million investments.
In one case, they persuaded the vice chairman of SunFirst Bank in Saint George, Utah, to process gambling transactions in return for a $10 million investment.
"As charged, these defendants concocted an elaborate criminal fraud scheme, alternately tricking some US banks and effectively bribing others to assure the continued flow of billions in illegal gambling profits," said Preet Bharara, US Attorney in Manhattan. "Moreover, as we allege, in their zeal to circumvent the gambling laws, the defendants also engaged in massive money laundering and bank fraud."