Reading the FBI official statement on the poker scandal
It seems that some poker establishments have been rather lax in their adherence to the law. This laxity is coming back to bite them. It all started with the US banks which were not willing to process payments. The poker companies then decided to get round this problem using fraud. Federal law defines the circumstances under which payments may be investigated or rejected by the relevant authorities. Of course the prosecution of a company is enough to completely destroy any reputation that it has built over the years. This is no exception in as much as it exposes the companies in a very public way.The dirty tricks that brought poker companies down
Given the fact that certain USA institutions were unwilling to or unable to process payments, the poker companies in question decided to trick them. A case in point was presented where the companies or entities called Isai Scheinberge and Paul Tate worked for Poker Stars to complete the scheme. Raymond Bitar and Nelson Burtnick were working for Full Tilt Poker. Scott Tom and Brent Beckley worked for Absolute Poker. The money that was received from USA players was disguised as payments to merchants that did not exist. The fictitious merchandise which they presented in the case includes golf balls and jewels.
A clever poker scam that got too clever
The banks continued to process the payments without knowing that there were legal restrictions or that the transactions never existed in the first place. About 30% of all the fund that were processed ended up going to the Poker Companies using the funding account. The rake charged to players was one of the key features of the fraudulent transactions and it has been one of the critical components of the investigations. Nearly every hand that was played involved the scam without the players necessarily understanding the implications.
The role of the payment processers
It appears that the payment processors that worked for the poker houses lied to the banks. They did not disclose the nature of the financial transactions in question. There were multiple strands in the lies in an attempt to cover up what was really happening on the ground. The creation of phony corporations was an aggravating feature of the crimes and also indicated the laxity with which these regulations were being implemented on the ground. The internet played a role too with phony websites.
Acknowledging the presence of the poker fraud
Evidence that was being presented to the grand jury included a document from the PokerStars website which seemed to indicate that they had received money from USA gamblers. According to the indictment, the prosecutors will be seeking $3 billion in civil money laundering penalties and also forfeiture of any ill gotten gains. That will be a devastating blog for the poker companies involved. For the defendants, there is every chance that they will be spending the next couple of decades in a federal prison. The gambling industry is not shocked given the inconsistent USA gambling laws.