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Sunday, April 17, 2011

A black friday for poker and, grey days yet to come

As I'm sure everyone has heard by now, the founders of PokerStars, Full Tilt Poker, and Absolute Poker were indicted on charges based on the Illegal Gambling Business Act of 1955 and the Unlawful Internet Gambling Enforcement Act of 2006 this past friday. The charges include: bank fraud, money laundering, and illegal gambling.
There were also restraining orders issued against over 75 bank accounts used by the online poker companies and their payment processors, as well as five Internet domain names.

During the course of the investigation, apparently using information gained from making a deal with Daniel Tzvetkoff, the former head of a payment processing company named Intabill that processed transactions for the online poker companies, the Department of justice gained evidence that it believes would prove that the poker sites conspired to defraud U.S. financial institutions by disguising transactions used for Internet gambling as something else to circumvent the UIGEA.

Because U.S. banks and credit card issuers were largely
unwilling to process payments for internet poker after the enforcement of UIGEA in June 2010, the DOJ believes that the Poker Companies used fraudulent methods to trick them 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 are accused of arranging for the money received from U.S. gamblers to be disguised as payments
to hundreds of non-existent online merchants.

According to the indictment, the Poker Companies also worked with an array of highly compensated "payment processors" including defendants RYAN LANG, IRA RUBIN, BRADLEY FRANZEN, and CHAD ELIE, who supposably obtained accounts at U. S. banks on the Poker Companies behalf and, then lied to banks about the nature of the financial transactions they were processing, as well as covered up those lies by,
among other things, creating phony corporations and websites.

after U.S. banks and financial
institutions detected and shut down multiple fraudulent bank
accounts used by the Poker Companies, SCHEINBERG and BITAR changed strategies. Instead of lying to the banks, PokerStars, FullTilt Poker, and their payment processors persuaded the principals of a few small, local banks
facing financial difficulties to process the payments in return for multi-million dollar investments in the banks.
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 at the poker tables.

The crimes carry heavy sentences, with bank fraud being the most serious one with a possible penalty of up to 30 years in prison and fines up to $1 million. I don't agree with what the poker companies have done. There should have been a way to do this without Breaking the law , but on the other hand There's no victim here. The poker sites have not stolen anything from anyone. If crimes have been committed, it was done with the good intentions of running legitimate business through unreasonable government interference.

The UIGEA is in my eyes totally rediculous. Poker is not a crime and, should not be treated as such. The poker companies do earn revenue in form of rake, but so do the land based casinos and, nobody's trying to ban them. How can you allow one and not the other? Besides, the U.S. government sanctions activities such as the lottery and stock market, which are much bigger gambles than poker, as they don't require the skill that poker does. Now don't think for one second that I'd imply that the UIGEA came in to play because it's easier for the government to get their cut of the revenue in form of taxes from the land based casinos.. Ahem....

The indictment is not only hurting the poker companies. It is also having a terible impact on all the players who are having trouble to withdraw their funds. Not to mention that U.S. Players will no longer be able to play on neither FullTilt nor PokerStars. There are still other companies where U.S. players are allowed, Such as border='0' /> but that may just be a question of time now, whhich means that Hundrads of thousands of players will lose their only source of income. Others will only lose their recreational outlet, but that is taking away from a persons freedom as well.

One's gotta put blame where blame is do and, there's no doubt that the poker sites has a responsibility here, by making it possible for the government to shut down their U.S. activity, but this proves more than anything that the U.S. government needs to take action, not by hunting down the owners of the poker companies, but by regulating, regulating, regulating poker!

It is the only way to protect the players and, that is after all the purpose of the UIGEA, right? Not to mention that there's no doubt that the U.S. economy would benefit immensely from these extra earnings. It has been on the verge of collapse for quite a while now...

Now is the Time for the Poker Community to Stand Strong and take action for Our Rights!

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