|
|
|
|
Welcome to the News desk. |
|
|
|
FBI charge 11 poker company officials |
18/04/2011 |
|
Richard Whitehouse |
FBI charge
11 poker company officials and shutdown three major online
poker sites operating in the USA
PREET BHARARA, the United States Attorney for the Southern District
of New York, and JANICE FEDARCYK, the Assistant Director in Charge of the New
York Field Office of the Federal Bureau of Investigation (FBI),
announced the unsealing of an indictment on April 15th charging 11 defendants,
including the founders of the three largest Internet poker companies doing
business in the United StatesPokerStars, Full Tilt Poker, and Absolute
Poker with bank fraud, money laundering, and illegal gambling
offenses.
The United States also
filed a civil money laundering and in rem forfeiture complaint against the
Poker Companies, their assets, and the assets of several payment processors for
the Poker Companies. In addition, restraining orders were issued against more
than 75 bank accounts utilized by the Poker Companies and their payment
processors, and five Internet domain names used by the Poker Companies to host
their illegal poker games were seized.
Manhattan U.S. Attorney PREET BHARARA said:
As charged, these defendants concocted an elaborate criminal fraud
scheme, alternately tricking some U.S. banks and effectively bribing others to
assure the continued flow of billions in illegal gambling profits. Moreover, as
we allege, in their zeal to circumvent the gambling laws, the defendants also
engaged in massive money laundering and bank fraud. Foreign firms that choose
to operate in the United States are not free to flout the laws they dont
like simply because they cant bear to be parted from their
profits."
FBI Assistant Director in Charge JANICE K. FEDARCYK said:
These defendants, knowing full well that their business with U.S.
customers and U.S. banks was illegal, tried to stack the deck. They lied to
banks about the true nature of their business. Then, some of the defendants
found banks willing to flout the law for a fee. The defendants bet the house
that they could continue their scheme, and they lost."
Because U.S.
banks and credit card issuers were largely unwilling to process their payments,
the Poker Companies allegedly used fraudulent methods to circumvent federal law
and trick these institutions into processing payments on their behalf. For
example, defendants ISAI SCHEINBERG and PAUL TATE of PokerStars, RAYMOND BITAR
and NELSON BURTNICK of Full Tilt Poker, and SCOTT TOM and BRENT BECKLEY of
Absolute Poker, arranged for the money received from U.S. gamblers to be
disguised as payments to hundreds of non-existent online merchants purporting
to sell merchandise such as jewelry and golf balls. Of the billions of dollars
in payment transactions that the Poker Companies tricked U.S. banks into
processing, approximately one-third or more of the funds went directly to the
Poker Companies as revenue through the rake" charged to players on almost
every poker hand played online.
As alleged in the Indictment, to
accomplish their fraud, the Poker Companies worked with an array of highly
compensated payment processors"including defendants RYAN LANG, IRA
RUBIN, BRADLEY FRANZEN, and CHAD ELIEwho obtained accounts at U. S. banks
for the Poker Companies. The payment processors lied to banks about the nature
of the financial transactions they were processing, and covered up those lies,
by, among other things, creating phony corporations and websites to disguise
payments to the Poker Companies. For example, a PokerStars document from May
2009 acknowledged that they received money from U.S. gamblers through company
names that strongly imply the transaction has nothing to do with
PokerStars," and that PokerStars used whatever company names the
processor can get approved by the bank."
By late 2009, after U.S. banks
and financial institutions detected and shut down multiple fraudulent bank
accounts used by the Poker Companies, SCHEINBERG and BITAR developed a new
processing strategy that would not involve lying to banks. PokerStars, FullTilt
Poker, and their payment processors persuaded the principals of a few small,
local banks facing financial difficulties to engage in such processing in
return for multi-million-dollar investments in the banks. For example, in
September 2009, ELIE and others approached defendant JOHN CAMPOS, the Vice
Chairman of the Board and part-owner of SunFirst Bank, a small, private bank
based in Saint George, Utah, about processing Internet poker transactions.
While expressing trepidations," CAMPOS allegedly agreed to process
gambling transactions in return for a $10 million investment in SunFirst by
ELIE and an associate, which would give them a more than 30 percent ownership
stake in the bank. CAMPOS also requested and received a $20,000 bonus"
for his assistance. In an e-mail, one of ELIEs associates boasted that
they had purchased" SunFirst and that they were looking to
purchase" a grand total of 3 or 4 banks" to process payments.
The
indictment and civil complaint seek at least $3 billion in civil money
laundering penalties and forfeiture from the Poker Companies and the
defendants. The District Court issued an order restraining approximately 76
bank accounts in 14 countries containing the proceeds of the charged offenses.
Pursuant to a warrant for arrest in rem issued by the U.S. District Court, the
United States also seized five Internet domain names used by the Poker
Companies to operate their illegal online businesses in the United
States.
Defendants CAMPOS and ELIE were arrested on the morning of the
15th in Saint George, Utah and Las Vegas, Nevada, respectively. ELIE appeared
later before a U. S. Magistrate Court Judge in Las Vegas, Nevada. CAMPOS
appears before a U.S. Magistrate Court Judge in Saint George, Utah on April 18,
2011. Defendant FRANZEN is expected to appear for his arraignment on April 19,
2011 in the Southern District of New York. Defendants BITAR, SCHEINBERG,
BURTNICK, TATE, TOM, BECKLEY, RUBIN, and LANG are not presently in the United
States and have not yet been arrested. The U.S. Attorneys Office for the
Southern District of New York is working with foreign law enforcement agencies
and Interpol to secure the arrest of these defendants and the seizure of
criminal proceeds located abroad. BITAR, TOM, RUBIN, BECKLEY, CAMPOS, ELIE, and
FRANZEN are U. S. citizens.
The most serious charge amongst 9
indictments, that of Money Laundering Conspiracy, which has a potential penalty
of 20 years in prison, was made against ISAI SCHEINBERG (Pokerstars), RAYMOND
BITAR (Full Tilt Poker), BRENT BECKLEY (Absolute Poker), NELSON BURTNICK (Full
Tilt Poker), PAUL TATE (Pokerstars), RYAN LANG (Full Tilt Poker), BRADLEY
FRANZEN (Full Tilt Poker), IRA RUBIN (Full Tilt Poker), CHAD ELIE (Full Tilt
Poker) and JOHN CAMPOS (Full Tilt Poker).
Full list
of charged in U. S. v. Scheinberg et al. (10 Cr. 336)
Defendant
|
Citizenship
|
Residence
|
Age |
Company |
ISAI
SCHEINBERG |
Canada, Israel
|
Isle of Man |
64 |
Pokerstars |
RAYMOND BITAR |
United States |
California, Ireland
|
39 |
Full Tilt
Poker |
SCOTT TOM |
United States |
Costa Rica |
31 |
Absolute Poker |
BRENT BECKLEY |
United States |
Costa Rica |
31 |
Absolute Poker |
NELSON BURTNICK
|
Canada |
Ireland |
40 |
Pokerstars |
PAUL TATE |
? |
Isle of Man |
? |
Pokerstars |
RYAN LANG |
Canada |
Canada |
36 |
Full Tilt
Poker |
BRADLEY FRANZEN
|
United States |
Illinois, Cost Rica
|
41 |
Full Tilt
Poker |
IRA RUBIN |
United States |
Costa Rica |
52 |
Full Tilt
Poker |
CHAD ELIE |
United States |
Nevada |
31 |
Full Tilt
Poker |
JOHN CAMPOS |
United States |
Utah |
57 |
Full Tilt
Poker |
|
|
|
|
|
|
|
|