Friday Federal prosecutors unsealed a sweeping indictment
against Isai Scheinberg and Raymond Bitar, founders
of the world's biggest online poker companies, and
moved to try to shut down their businesses.
The indictment filed by Preet Bharara, the U.S. Attorney
in Manhattan, charges Scheinberg, the founder of PokerStars,
and Bitar, the founder of Full Tilt Poker, as well
as nine other individuals, accusing them of operating
illegal gambling businesses. Federal prosecutors also
filed a civil lawsuit seeking $3 billion in civil
money laundering penalties, alleging the online poker
companies disguised money they received from U.S.
poker players as payments to online merchants selling
jewelry and golf balls.
The
U.S. Attorney in Manhattan moved to try to shut down
the online poker business in America by seizing five
Internet domain names, including pokerstars.com and
fulltiltpoker.com, used by the three main companies
facilitating online poker games in the U.S. In addition,
a federal judge issued a restraining order against
76 bank accounts in 14 countries utilized by those
online poker firms.
The
indictment sets up a complicated global legal battle
between the Department of Justice and the online poker
entrepreneurs who have long argued that their operations
in the U.S. do not violate U.S. law. Indeed, in recent
days, one of the nation's most prominent casino billionaires,
Steve Wynn, announced a strategic relationship with
PokerStars and said "in the United States of
America the Justice Department has an opinion but
several states have ruled and courts have agreed that
poker is a game of skill, it's not gambling. PokerStars
rests their argument on that."
But in a 51-page indictment filed in federal court
in Manhattan, federal prosecutors allege that PokerStars,
Fullt Tilt Poker and Absolute Poker, "used fraudulent
methods to avoid restrictions and to receive billions
of dollars from United States residents who gambled."
The indictment largely focuses on financial transactions,
claiming the online poker companies violated a 2006
law that Congress passed to cut off the flow of cash
to online gambling companies, saying the firms "deceived
or directed others to deceive United States banks
and financial institutions into processing billions
of dollars in payments."
