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FBI Declares War on Online Poker Sites: PokerStars, Full Tilt Poker, and Absolute Poker All Shut Down


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The FBI has officially declared war on the online poker industry by shutting down three of the largest online poker sites and levying serious charges against their owners and cohorts.

PokerStars, Full Tilt Poker, and Absolute Poker were shut down by the FBI yesterday following the indictments of 11 people involved with the online sites and those involved with financial transactions. The owners of the three largest pokwer sites were charged with bank fraud, illegal gambling offenses and money laundering.  

The 11 defendants are Isai Scheinberg and Paul Tate (PokerStars), Raymond Bitar and Nelson Burtnick (Full Tilt Poker), Scott Tom and Brent Beckley (Absolute Poker) and Ryan Lang, Ira Rubin, Bradley Franzen, Chad Elie and John Campos (involved with payment processors).

Back in 2006, Congress passed legislation to limit online gambling, but these sites still found a way to work around the laws despite operating outside the United States.

In the official indictment, they are charged with conspiracy to violate Unlawful Internet Gambling Enforcement Act (UIGEA), violation of UIGEA, operation of illegal gambling business, conspiracy to commit bank fraud and wire fraud, and money laundering conspiracy . And, the maximum penalties from these charges range from five years in prison and a $250,000 fine to 30 years in prison and a $1,000,000 fine (or twice the gross gain or loss).

The FBI is looking to recover $3 billion in money laundering penalties and seeking forfeiture from the defendants.

The FBI’s message is pretty clear - online poker is not in the cards for businessmen. If you operate an online poker site, you’re going to go to jail. This basically marks the end for online poker in it's current form. If you’re not operating a casino then you can forget about running a gambling operation in America.

"Some of the defendants found banks willing to flout the law for a fee," Janice Fedarcyk, the assistant director in charge of the FBI's New York Field Office, said in a prepared statement. "The defendants bet the house that they could continue their scheme, and they lost."

The other day, they were still operating like business as usual. Now if you go to either of the three sites, there is an FBI warning stating that “this domain name has been seized by the FBI pursuant to an Arrest Warrant.”

The Poker Players Alliance responded "On behalf of the millions of poker players across the country, we are shocked at the action taken by the U.S. Department of Justice today against online poker companies and will continue to fight for Americans' right to participate in the game they enjoy. Online poker is not a crime and should not be treated as such. We are currently gathering all of the information around today's announcement and will offer detailed analysis when the full facts become available."

Atlantic City, Vegas, and the casino industry as a whole have the government in their pocket. These companies clearly circumvented the system to remain in business, but this case has more to do with threatening the profits of the "legal" gambling industry. Don't be surprised to see the FBI go after sites like Bodog next.

It will be a tall task for the PPA as they are going up against the Federal Government. When the Federal Government goes after an organization or entity, they pretty much always come out victorious. They have the money, resources, and laws on their side.

This goes to show you that if you're an independent entrepreneur looking to make it big in the online gambling industry, forget about it. If online gambling ever becomes legalized in this country, the fat cats in the "legal" gambling industry will get first dibs.

Contact Dennis Bakay at dbakay@philly2philly.com


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