Internet gambling sites owners charged with fraud

NEW YORK Fri Apr 15, 2011 3:58pm EDT

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NEW YORK (Reuters) - The owners of three of the largest Internet poker companies operating in the United States were accused on Friday of tricking regulators and banks into processing billions of dollars of illegal Internet gambling proceeds.

Eleven people, including the owners of Full Tilt Poker, Absolute Poker and PokerStars, were charged with violating U.S. anti-Internet gambling laws, according to charges filed by federal prosecutors in Manhattan.

Prosecutors also filed civil money laundering charges seeking to recover at least $3 billion from the companies, which are all based overseas, court documents said.

The Internet domain names of the companies were also seized. Representatives for the companies could not immediately be reached to comment on the charges.

Two of the men were arrested on Friday, one is expected to turn himself in to law enforcement and eight others are not currently in the United States, prosecutors said.

Raymond Bitar, 39, of Full Tilt Poker and Isai Scheinberg, 64, of PokerStars were charged with violating the Unlawful Internet Gambling Enforcement Act and other laws. Absolute Poker owners Brent Beckley, 31, and Scott Tom, 31, faced similar charges.

The criminal charges outlined a scheme by the company owners and some of their employees to direct the gambling profits to online shell companies that would appear legitimate to banks processing payments.

The charges are part of a crackdown on Internet gambling in the United States, where it has been illegal since 2006.

In March, Wynn Resorts Ltd said it had entered into a partnership with PokerStars, and that they would work for passage of U.S. legislation on Internet poker.

U.S. lawmakers have in the past tried to pass legislation legalizing Internet gambling in the hope of reaping billions in tax revenue.

(Reporting by Basil Katz; Editing by Steve Orlofsky)

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Comments (7)
USAPragmatist wrote:
Unreal….Poker is a game of skill, there is not one SINGLE reason in a ‘free’ country why we cant play poker on these sites.

I thank good ole Trent Lott for sticking this stupid Unlawful Internet Gambling Enforcement Act into a Port Security bill at the last minute that NO Senator could vote against in that political climate(was about 5-6 yrs ago). Before this act I made my living playing poker online AND i paid my taxes on my winnings.

They mention ‘gambling profits’ this is a mis characterization. These sites do not make money when people lose, they make money when people PLAY, no matter who wins and loses. They take a fee for ‘hosting’ the game or tourney, e.g a $20 dollar tourney normally as a $2 entry fee.

On issues like this I am with the libertarians.

Apr 15, 2011 4:20pm EDT  --  Report as abuse
BobSmith223 wrote:
I’m glad I recently cashed out at Poker Stars! Anyone who plays on that site long enough knows that they have a faulty shuffling algorithm (far too many three to a suit flops occur, for example), and I suspect it’s even worse than that. I personally believe there is rigging of the site such that good players, such as myself, don’t win as much, in exchange for the poor players, who win more than they should. You may ask, “How does that help the site?”. Well, as the previous poster noted, the site makes money whether you win or lose, so it is in their interest to keep poor players playing longer, so that the site makes more entry fees from them. For example, a bad player has $100, and plays 20 5-dollar, 9-person tourneys. His skill level should make him cash in 3 of the 20, but the rigged deck on Poker Stars makes him cash in 5 of the 20, resulting in the $100 being used to enter more tourneys, and the site making more. Eventually, the bad players lose all their money to the site and other players, but the rigging makes the site get an unfair share of the losers money.

Apr 15, 2011 4:41pm EDT  --  Report as abuse
noPolitician wrote:
Zynga Poker on Facebook is all very okay, but I have an issue with it. It will TAKE our money by Credit Card, PayPal, or whatever, but it will NEVER give us money in return. I have nearly $500,000 in “chips” that I would like to “cash in” and convert into my currency – hell, if I could I would be able to retire and never have to play this stupid game again. But they won’t answer my questions. I think it’s just another FRAUDulent operation that TAKES REAL MONEY and gives back SQUAT!

Apr 15, 2011 5:09pm EDT  --  Report as abuse
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