Breaking News - Online Poker Giants Poker Stars, Full Tilt Poker, Absolute Poker and UB Poker Seized by Feds

If you are a poker player from the US or from anywhere for that matter, your poker playing days maybe over. The founders of the three largest poker websites on the internet were indicted today. A move that could send a major shockwave thru the industry at the very least and maybe signal the end of some major poker brands.

Eleven execs at Poker Stars, Full Tilt Poker, Absolute Poker and several other companies were hit with charges of bank fraud and money laundering. Two of the defendants were taken into custody this morning in Nevada and Utah. Federal agents are still on the lookout for the others.

The executives listed in the filing are Isai Scheinberg, Raymond Bitar, Scott Tom, Brent Beckley, Nelson Burtnick, Paul Tate, Ryan Lang, Bradley Franzen, Ira Ruben, Chad Elie, and John Campos. Restraining orders were issued against more than 75 bank accounts allegedly used by the defendants and their payment processing companies.

Prosecutors want the websites shut down and the execs sent to prison. They would also like to recover approximately $3 billion from the companies involved. This afternoon, Full Tilt Poker’s website displayed a message that read, “this domain name has been seized by the F.B.I. pursuant to an Arrest Warrant.” Soon after Poker Stars, Absolute Poker, and UB Poker websites displayed the same message. All four domains were seized by the Department of Justice.

In 2006, Congress passed legislation to curtail gambling online. Many of the big players managed to figure out how to circumvent the law, but it looks like in doing so they may have broken a few laws along the way.

“These defendants concocted an elaborate criminal fraud scheme, alternately tricking some U.S. banks and effectively bribing others to assure the continued flow of billions in illegal gambling profits,” says Preet Bharara, the U.S. attorney in Manhattan, where today’s indictment was unsealed.

“Moreover, as we allege, in their zeal to circumvent the gambling laws, the defendants also engaged in massive money laundering and bank fraud.”

This obviously is the major story of poker players on the internet and the full effects surely have not been felt.

US Still Free to Gamble Online & Bill Side Effects

The Unlawful Internet Gambling Enforcement Act of 2006 does not make it a crime for US residents to gamble online; American players are still free to gamble anywhere on the Internet, stated Rick Smith and Keith Furlong, who respectively are the Executive and Deputy Directors of the Interactive Gaming Council (IGC), in a press release this week.

The IGC is a leading trade association for the international interactive gambling industry with its membership operating or supplying services to most of the reputable interactive sites on the Internet.

Their press release continued, saying the bill focuses on the prosecution of financial institutions handling transmission of money from U.S. players to operators of online gambling sites. So some sites may no longer accept wagers, as many of the publicly traded online gambling companies announced they would stop taking American bets following recent passage of the bill by Congress. 

But they stressed that the bill will cause unintended negative consequences, in direct opposition to the bill's intent. 

"In the guise of protecting vulnerable Americans- minors who want to gamble and adults who can't control their gambling - Congress has actually heightened the risk to these groups," said IGC Deputy Director Furlong.

"It has driven away the operators who followed the most socially responsible practices. It has also increased the possibility of online gambling being used for money laundering, because it has outlawed the most easily tracked methods of payment."  Read More