The Big 5 Major Poker Websites Targeted in Federal Crackdown

from ChaoticFate.com by qew

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By CHAD BRAY

NEW YORK—Eleven people, including the founders of three of the largest online poker companies doing business in the U.S, have been charged in the latest crackdown on Internet gambling by U.S. authorities.

Federal prosecutors in Manhattan have alleged the poker companies, which are located outside the U.S., tried to sidestep U.S. laws prohibiting banks and credit-card issuers from processing gambling payments by disguising billions of dollars from U.S. gamblers as payments to nonexistent online merchants for golf balls, jewelry, flowers and other merchandise.

After U.S banks and financial institutions began detecting and shut down bank accounts used by the scheme in late 2009, prosecutors allege, a new strategy was developed in which two online poker websites allegedly persuaded a few small, local banks facing financial difficulties to process their payments in return for multimillion-dollar investments in those banks.

"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," said Preet Bharara, the U.S. attorney in Manhattan.

Those charged Friday include the founders of online poker websites PokerStars, Full Tilt Poker, and Absolute Poker. The charges include bank fraud, money laundering and online-gambling offenses.

Representatives of PokerStars and Full Tilt Poker didn't immediately respond to requests for comment Friday. Contact information for Absolute Poker couldn't immediately be located.

Federal authorities also have filed restraining orders against 76 bank accounts in 14 countries allegedly associated with the poker companies and others as a part of a separate civil forfeiture action. They are seeking at least $3 billion in civil money-laundering penalties and forfeiture.

Prosecutors also seized five Internet domain names used by the poker companies.

Friday's indictment and seizures mark the latest effort by U.S. authorities to crack down on online gambling. In recent years, some executives of overseas online-gambling firms have been arrested when the travel to the U.S.

In October 2006, the U.S. made it a crime for companies to knowingly accept electronic payments in connect with Internet gambling.

In the latest indictment, U.S. prosecutors have alleged that the poker companies recruited third parties to open banks accounts and process "e-check" transactions using phony company names. Four men who allegedly acted as middlemen in collecting payments also have been charged.

About a third of the funds deposited by gamblers went to the poker companies as revenue, known as the "rake," prosecutors said. A rake refers to a percentage of a poker pot that it is collected by a casino or online poker site after a player wins the hand.