The three largest poker operations frozen Friday by the U.S. federal government wasted little time in getting back into business. The online operations are all offshore and all three have returned with .eu domain names.
The Costa Rican operation involved is Absolute Poker, based in Plaza Mayor, Rohrmoser. The primary Web site is now Absolutepoker.co.eu. The online gambling business is operated by Blanca Games Inc., which says it is incorporated in Antigua and Barbuda. Blanca says it is licensed by the gaming commission of the Mohawk Territory of Kahnawake in Quebec, Canada.
The two other firms are Full Tilt Poker, licensed by the Alderney Gambling Control Commission in the Channel Islands and PokerStars, based in the Isle of Man.
The U.S. Attorney’s Office in Manhatten, New York, announced the unsealing of indictments Friday charging 11 defendants, including the founders of the three poker companies with bank fraud, money laundering, and illegal gambling offenses. The United States also filed a civil money laundering and forfeiture complaint against the companies, their assets, and the assets of several payment processors. In addition, restraining orders were issued against more than 75 bank accounts used by the poker companies and their payment processors, and five .com Internet domain names used by the companies to host their games were seized, the U.S. Attorney’s Office said.
Scott Tom and Brent Beckley, both 31 and founders of Absolute Poker, were two of the 11 person indicted in the same action. Two other persons with Costa Rican ties, Bradley Franzen, 41, and Ira Rubin, 52, also were indicted. All are U.S. citizens. Federal authorities described Franzen and Rubin as highly compensated payment processors who helped the poker companies get around money transfer prohibitions in a 2006 U.S. law.
“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 K. Fedarcyk, assistant director in charge for the Federal Bureau of Investigation, in a release. “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. The defendants bet the house that they could continue their scheme, and they lost.”
The federal government was able to take over the domain names of the companies because the .com designations are administered in the United States
Full Tilt posted a message on its .eu Web site saying that it is “unable to accept ‘real money’ play from U.S. players; however, we continue to conduct business as usual in the rest of the world. Please be assured that your funds remain safe and secure.”
The federal government posted a notice on the Absolute Poker site saying that the domain name had been seized by the FBI.
The Sidney, Australia, Morning Herald said the indictments were the result of inside information given by Daniel Tzvetkoff, who was arrested when he visited the United States a year ago. The newspaper said that the poker operators tipped FBI agents to Tzvetkoff’s whereabouts because they had been feuding with his handling of their funds. Tzvetkoff, in turn, told federal agents all that he knew about the elaborate routes money was taking to get from the United States to the poker companies, the newspaper said.
Only three of the indicted individuals have been arrested. Eight were reported to be outside the United States. Frantzen was expected to appear in U.S. court in New York Tuesday.
Among those arrested is John Campos, vice chairman and part owner of SunFirst Bank in Saint George, Utah. Federal officials said that he processed payments for the poker sites in exchange for a $10 million investment in the struggling bank. He was arrested in his hometown. In Las Vegas, Nevada, FBI agents detained Chad Elie, who is accused of setting up the SunFirst deal for the poker firms. He, like Rubin, was identified as a funds processor.
Money received from U.S. gamblers was disguised as payments to hundreds of non-existent online merchants purporting to sell merchandise such as jewelry and golf balls, federal officials said. Of the billions of dollars in payment transactions that the poker companies tricked U.S. banks into processing, approximately one-third or more of the funds went directly to the poker companies as revenue through the rake charged to players on almost every poker hand played online, the officials said.
The U.S. Attorney’s Office for the Southern District of New York said it is working with foreign law enforcement agencies and Interpol to secure the arrest of the other defendants and the seizure of criminal proceeds located abroad.
Also indicted were those associated with the poker firms located elsewhere: Isai Scheinberg, a Canadian and Israeli citizen whose address was listed as the Isle of Man; Raymond Bitar, who lives in California and Ireland; Nelson Burtnick, a Canadian; Paul Tate, resident of the Isle of Man, and Ryan Lang, a Canadian.
Most of the charges stem from the Unlawful Internet Gambling Enforcement Act that makes it a federal crime for gambling businesses to knowingly accept most forms of payment in connection with the participation of another person in unlawful Internet gambling.
Federal officials might have difficulty in extraditing Tom, Beckley and Rubin if they still are in Costa Rica. This country only accepts extradition requests if the activities alleged represent crimes here. Online gambling is legal here. In addition Costa Rica does not extradite Costa Rican citizens, and one or more of the suspects may have acquired dual citizenship.