Criminal fraud charges against executives at three large Internet poker companies could cripple the booming offshore industry and chances of legalizing online gaming, reported Forbes.com.
On April 15, executives of PokerStars, based on the Isle of Man, Ireland’s Full Tilt Poker and Absolute Poker of Costa Rica, and their affiliates were indicted for bank fraud and money laundering, reported Bloomberg.
Two of the defendants were arrested on the morning of April 15 in Utah and Nevada, and federal agents are searching for the others. As of mid-day April 18, only Full Tilt Poker remained up and running; the other two sites note that the “domain name has been seized by the F.B.I. pursuant to an Arrest Warrant.”
Prosecutors allege that after the enactment of the Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006, which made it illegal for banks to process payments to offshore gambling websites, these operators disregarded the ban and continued transactions with U.S. customers. “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,” Preet Bharara, the U.S. attorney in Manhattan, said in a statement.
The government seeks at least $3 billion in forfeitures and penalties, reported Bloomberg.
Restraining orders have been issued on more than 75 bank accounts allegedly used to process payments illegally, reported The Christian Science Monitor.
The recent crackdown may stymie legislation recently proposed to legalize Internet poker nationwide. On March 17, U.S. Rep. Barney Frank (D-Massachusetts) introduced the latest incarnation of his Internet gaming bill to the House Financial Services Committee, with bipartisan support from U.S. Rep. John Campbell (R-California), who co-authored the proposed legislation, to legalize, regulate and tax online poker and other non-sports betting other than pari-mutuel racing and undo the UIGEA.
Tribal led organizations like the California Online Poker Association (COPA), a coalition of California tribes and card rooms led by the Morongo Band of Mission Indians, have long advocated legalizing online poker in California.