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Author Topic: Online poker companies indicted for fraud  (Read 3067 times)
jimbobway
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April 15, 2011, 08:29:48 PM
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They should have used bitcoin, they should have used bitcoin...

http://money.cnn.com/2011/04/15/news/economy/online_poker_indictments/index.htm?hpt=T2


By Ben Rooney, staff reporterApril 15, 2011: 3:25 PM ET

NEW YORK (CNNMoney) -- The founders of the three largest Internet poker companies have been indicted for bank fraud and money laundering, federal law enforcement officials said Friday.

The United States Attorney in New York unsealed the indictment against eleven people, including the founders of PokerStars, Full Tilt Poker, and Absolute Poker.

In addition, federal authorities filed civil charges against the poker companies and several payment processors for alleged money laundering.

Some of the defendants were arrested Friday, including individuals who worked on behalf of the poker companies to obtain U.S. bank accounts.

Prosecutors said they were working with foreign law enforcement agencies and Interpol to secure the arrest of other defendants who are not in the United States.

Preet Bharara, the U.S. Attorney in Manhattan, said the defendants tricked some banks and bribed 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," Bharara said in a statement.

Prosecutors are seeking at least $3 billion in civil penalties and forfeiture from the poker companies and the defendants.

"These defendants, knowing full well that their business with U.S. customers and U.S. banks was illegal, tried to stack the deck," said Janice Fedarcyk, FBI assistant director-in-charge. "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."

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FreeMoney
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April 15, 2011, 08:39:36 PM
 #2

So there are about a million Americans who want to play poker right now and can't. It would be a good time to open a nice Bitcoin poker room.

If some developer with experience making things happen needs a little capital, let me know.

Play Bitcoin Poker at sealswithclubs.eu. We're active and open to everyone.
vuce
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April 15, 2011, 08:46:18 PM
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So there are about a million Americans who want to play poker right now and can't. It would be a good time to open a nice Bitcoin poker room.

If some developer with experience making things happen needs a little capital, let me know.
we're in the process of assembling a team that would/will make this happen.
Cryptoman
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April 15, 2011, 08:56:56 PM
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This is why it is essential for online gambling operators to maintain anonymity.  Register domains and pay for hosting anonymously.  Also, make sure the site functions correctly with IP addresses only (no shared hosting).

Edit: This is going to propel Bitcoin into the stratosphere, seeing as how Matonis just gave a talk at a major gaming conference about how Bitcoin is the ideal eGaming currency: http://bitcointalk.org/index.php?topic=5266.msg77015.

"A small body of determined spirits fired by an unquenchable faith in their mission can alter the course of history." --Gandhi
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April 15, 2011, 09:42:19 PM
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This is why it is essential for online gambling operators to maintain anonymity.  Register domains and pay for hosting anonymously.  Also, make sure the site functions correctly with IP addresses only (no shared hosting).

Edit: This is going to propel Bitcoin into the stratosphere, seeing as how Matonis just gave a talk at a major gaming conference about how Bitcoin is the ideal eGaming currency: http://bitcointalk.org/index.php?topic=5266.msg77015.

I think it is crucial to rather comply with the needed regulations. Otherwise, this bitcoin poker activity could easily kill bitcoins as government would go after it.

>15years analysis experience

Always do your own due diligence & consult your financial advisor. Never invest unless you can afford to lose your entire investment.

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Jered Kenna (TradeHill)
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April 15, 2011, 09:47:46 PM
 #6

Comply and use bitcoins. Should be easier to comply using bitcoins anyways.

This sucks but it's great for bitcoins.

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April 15, 2011, 09:51:29 PM
 #7

Comply and use bitcoins. Should be easier to comply using bitcoins anyways.

This sucks but it's great for bitcoins.

thats what I mean
+1

>15years analysis experience

Always do your own due diligence & consult your financial advisor. Never invest unless you can afford to lose your entire investment.

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JohnDoe
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April 15, 2011, 09:52:51 PM
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Awesome news. Thanks for helping Bitcoin out, DOJ.
allinvain
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April 15, 2011, 10:02:31 PM
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So there are about a million Americans who want to play poker right now and can't. It would be a good time to open a nice Bitcoin poker room.

If some developer with experience making things happen needs a little capital, let me know.

They're going to go after bitcoin next then. Granted this will bring on publicity like crazy though! I just worry that bitcoin will be made into the next e-gold.

marcus_of_augustus
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April 15, 2011, 11:33:09 PM
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And in other news, Wall Street bankers bonuses rose again today ...

.... the biggest fraud goes unpunished, the society itself is criminal to core now so police action becomes meaningless, we are all criminals now, it is law of the jungle from here on in ...

Anonymous
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April 16, 2011, 12:50:22 AM
 #11

http://www.pokernewsdaily.com/u-s-department-of-justice-seizes-major-online-poker-sites-18779/

Now we know what has driven the price up.

Ive also heard rumors bitcoin will be mentioned in TIME magazine article about this.

I suggest you buy all the bitcoins you can right now.

Quote
In what has been a lively afternoon in the online poker world, the Federal Government has seized the domain names belonging to PokerStars, Full Tilt Poker, UB.com, and Absolute Poker. Poker News Daily has learned that PokerStars, the world’s largest site, has ceased taking action from the United States.

According to a statement from the Justice Department, the founders of PokerStars, Full Tilt Poker, and Absolute Poker have been charged with “bank fraud, money laundering, and illegal gambling offenses.” 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.”

Visiting any of the four major online poker sites yields a message that reads in part, “This domain name has been seized by the FBI pursuant to an arrest warrant in rem obtained by the United States Attorney’s Office for the Southern District of New York… Conducting, financing, managing, supervising, directing, or owning all or part of an illegal gambling business is a Federal crime.”

The new home page of PokerStars, Full Tilt, UB.com, and Absolute Poker adds that violating such laws can result in up to five years behind bars and a fine of $25,000. Preet Bharara, the U.S. Attorney in Manhattan, commented in the Justice Department statement, “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.”

The statement discusses the passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) five years ago and revealed, “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.”

The defendants include Isai Scheinberg and Paul Tate of PokerStars, Ray Bitar and Nelson Burtnick of Full Tilt Poker, and Scott Tom and Brent Beckley of Absolute Poker. Bank accounts in 14 countries have been seized. The Justice Department is seeking to recover several billion dollars in 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.”

Sources close to Poker News Daily tell us that UB.com and Absolute Poker will likely remain in the United States despite Friday’s news. Attempts to access PokerStars and Full Tilt Poker from a computer outside of the United States were successful. When visiting UB.com or Absolute Poker, the same Justice Department message appeared.

The news was first reported around 2:00pm ET on Friday. As we sit here writing, the Justice Department is apparently in hot pursuit of its defendants, as the same statement explained, “The U.S. Attorney’s 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.”

The Poker Players Alliance was set to release a statement in the coming hours. Needless to say, you can keep checking back with us for the latest.


goldmongler
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April 16, 2011, 01:27:24 AM
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the problem was they used the oldest trick in the book to conceal gambling payments 'hey.. let's make some fake US merch accounts and then pretend our users are buying jewels and golf balls!' /facepalm

you can't use bitcoin for gambling because the value change too much. you could use liberty reserve however




Littleshop
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April 16, 2011, 01:32:53 AM
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the problem was they used the oldest trick in the book to conceal gambling payments 'hey.. let's make some fake US merch accounts and then pretend our users are buying jewels and golf balls!' /facepalm

you can't use bitcoin for gambling because the value change too much. you could use liberty reserve however

The value of a bitcoin changing relative to other currencies such as the dollar does not stop or even cause any harm for gambling.  The value of the dollar changes vs the euro as well.  Both can are still used for gambling. 

steelhouse
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April 16, 2011, 01:37:50 AM
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The recent rally in bitcoin may be because of this indictment.  Maybe one of the 11 arrested knew the hammer was coming down and decided to put his money into bitcoin, to save a couple hundred K just in case.  Bitcoin has another use, similar to offshore accounts.
kiba
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April 16, 2011, 01:40:57 AM
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The recent rally in bitcoin may be because of this indictment.  Maybe one of the 11 arrested knew the hammer was coming down and decided to put his money into bitcoin, to save a couple hundred K just in case.  Bitcoin has another use, similar to offshore accounts.

Or maybe it was just a coincidence.

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April 16, 2011, 01:42:20 AM
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The recent rally in bitcoin may be because of this indictment.  Maybe one of the 11 arrested knew the hammer was coming down and decided to put his money into bitcoin, to save a couple hundred K just in case.  Bitcoin has another use, similar to offshore accounts.

Or maybe it was just a coincidence.

Will see how the volume goes today.
steelhouse
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April 16, 2011, 01:50:17 AM
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Another use.  Full Tilt Poker can stay open and use bitcoin to transfer money between players.  killer app.  winning gone.
The Script
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April 16, 2011, 02:46:01 AM
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Where's the connection to bitcoins?  Did some of those sites use bitcoins?
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April 16, 2011, 02:49:44 AM
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http://www.pokernewsdaily.com/u-s-department-of-justice-seizes-major-online-poker-sites-18779/

Now we know what has driven the price up.

Ive also heard rumors bitcoin will be mentioned in TIME magazine article about this.

I suggest you buy all the bitcoins you can right now.



Buncha coincidence.

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April 16, 2011, 03:40:18 AM
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Here's my two cents (posted elsewhere previously):

Since regulation looks imminent, and the DOJ is not going to be able to keep seizing payment processors after it's explicitly legal in the US, they're going for one big score before it becomes impossible. Especially since they know no one they indicted will show up in the US For court. They're just trying to get them to pay money for the promise that they'll be able to enter the US market again once it's legalized.

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