FBI busts three biggest online poker houses

By Michael McCarthy, USA TODAY


In a major crackdown on online gambling, the FBI and U.S. Attorney's Office have charged the founders of the three biggest Internet poker sites with fraud, illegal gambling and laundering billions of dollars in illegal gambling proceeds.










The FBI said Friday it's indicting 11 defendants -- including the founders of PokerStars, Full Tilt Poker and Absolute Poker -- with bank fraud, money laundering, and illegal gambling offenses. The feds also seized five Internet domain names used by the companies to host their poker games and issued restraining orders against 75 bank accounts in 14 countries used to process payments. The U.S. attorney's office is also seeking $3 billion in damages. The defendants could be sentenced with up to 20 years in prison.








PokerStars posted a statement early Saturday through its computer software and on Twitter saying the company has had to suspend real money play to customers based in the U.S., according to the Associated Press.

"Please be assured player balances are safe. There is no cause for concern," the statement said. "For all customers outside the U.S. it is business as usual.

Earlier, Manhattan U.S. Attorney Preet Bharara said in a statement: "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."

"These defendants, knowing full well that their business with U.S. customers and U.S. banks was illegal, tried to stack the deck," added FBI Assistant Director in Charge Janice Fedarcyk. "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."

The feds say the poker sites violate the Unlawful Internet Gambling Enforcement Act passed in 2006. The offshore poker companies have argued they operate outside the reach of U.S. law. The U.S. government considers Internet gambling to be illegal. Still, it's been estimated Americans gamble up to$6 billion per online.

The feds say 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 in payments 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," according to the FBI.

Most of the defendants have been arrested and are scheduled to appear in federal courts over the next week. Several are still at-large.