Friday, April 15, 2011

Largest Internet Poker Sites Shut Down

One-Third Of Bets Said To Be Skimmed As Profits

The New York Field Office of the Federal Bureau of Investigation, announced the unsealing of an indictment today charging 11 defendants, including the founders of the three largest Internet poker companies doing business in the United States—PokerStars, 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 Bharra 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 don't like simply because they can't bear to be parted from their profits."

On October 13, 2006, the United States enacted the Unlawful Internet Gambling Enforcement Act, making it a federal crime for gambling businesses to "knowingly accept" most forms of payment "in connection with the participation of another person in unlawful Internet gambling." Despite the passage of UIGEA, the Poker Companies, located offshore, continued operating in the United States. In a press release dated October 16, 2006, Absolute Poker announced that the company would continue its U.S. operations because "the U.S. Congress has no control over" the company's payment transactions.

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. 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.

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. 

$3 Billion Sought By Government In Penalties And Forfeitures

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.


  1. Anonymous5:54 PM

    Poker Site seizure… The US govt is so broke they’re trying to steal the money from someone who knows how to run a business. Now the only ones who can play online are people from Russia, Germany, Korea, where ever else… Why does the U.S. have so much pride in having “freedom” for its citizens again??? Sounding pretty communist these days.

  2. Anonymous6:49 PM

    I have Money stuck on full tilt now.. The government is not taking from full tilt, they are taking from the citizens. I think I hate my government for the first time in my life... Nice job USA

  3. Anonymous7:38 PM

    good job
    keep walking

  4. Anonymous10:33 PM

    If you do not like the USA move to another country, possibly Mexico or Russia. Personally, I prefer to pay my taxes and forego the online poker (although I did enjoy playing)and stay in the the USA.

  5. Anonymous11:18 PM

    I laugh at all the suckers who lost their money on online poker-


  6. Anonymous2:33 AM

    For all of the people out there that laugh or don't care about what the Goverment is doing to us poker player's, just think what might be next. Maybe they want to bring back prohabition make it illegal to have a beer after work or while your watching a football game. What if they want to outlaw speaking out against the goverment. Are you going to laugh at that? JUST SOMETHING TO THINK ABOUT

  7. Anonymous1:33 PM

    It's ok to have state supported lottery??? That has no skill involved to gamble that money away.. I chose to gamble a little money on online poker, but I had more control over that than I do some stupid lottery ticket. So, now if I want to gamble I have to go to Vegas. It's amazing how it can be legal here and there where the government can regulate it and get their piece of the pie, but they couldn't figure out how to do that on the internet, so they just take the sites over and shut them down. What a bunch of hypicrits our government is. I fought for this country, but I would gladly move to another country that isn't so controlling, but honestly no other country wants to accept Americans. We are stuck in this hell hole! Thanks you US government for destroying a great country.

  8. Anonymous12:35 AM

    Did it ever come to mind that these online poker sites were run on off shore accounts- Winnings could not be tracked using 1099s

  9. Anonymous3:13 PM

    Laughing at all the IDIOTS who lost money-


  10. Anonymous11:52 AM

    for those of you who use this as their basis for calling this country a "hell hole," you need to look much deeper than this. Although I disagree with the action taken, there are much deeper problems than poker sites being shut down. Use that energy to get to the root of the problem, the people put in leadership. If you want to make a difference, quit wasting time griping about this and get active with groups that support change that will restore this great country and who knows, maybe that will mean fair online poker, not the rigged system in place today...and thank you to the gentleman or lady above who has served our country. We appreciate your sacrifice.

  11. Anonymous1:21 PM

    I know plenty of guys who play online poker....and every single one of them knew it was illegal.......

  12. Anonymous11:07 PM

    I'm old alone & lost my sex drive. I sit home bored nothing to do. I'm tired of watching TV and been getting forgetful so I play poker to sharpen my memory, it make me think twice before I make a move & keep me from progressing into dementia. Poker is a therapy. So what the hell I care if I win couple dollars or loose a bit more, that's a chump change compared to the medications & the physician fees. I rather spend the money while enjoying playing poker instead of all the side effect like drowsiness, constipation, hallucination that the legal drugs I take. That's why I think poker should be legal it make me concentrate and not forget that I had oat meal with a fried egg on top for breakfast 5 days ago.

  13. #1, I don't completely agree with you with the "stealing money" banter you believe. Perhaps they have clean motives on this way, misguided but still clean.

    They should see how taxing this then-thriving industry can help the US economy recover.