Online poker player accounts frozen

U.S. Attorney Preet Bharara in Manhattan and Janice Fedarcyk, the FBI’s assistant director in charge in New York, announced on April 15 a revised indictment against the founders of PokerStars, Full Tilt Poker and Absolute Poker.

PokerStars, based on the Isle of Man, Ireland’s Full Tilt Poker and Absolute Poker of Costa Rica are the leading online poker sites doing business with U.S. customers, said prosecutors. Five sites displayed notices yesterday that the FBI had seized the domain names.

“These funds are currently being reviewed by the U.S. as part of an ongoing criminal investigation, and we are looking at the funds and accounts to determine if they are the profits of an illegal enterprise,” Langmesser said. “The funds won’t be available until a determination has been made.”

The investigation is focused on “the larger criminal enterprise of those who operate online Internet gambling sites and the individuals behind these sites,” said Langmesser of the Federal Bureau of Investigation.

Prosecutors allege that after the U.S. enacted a law in 2006 barring banks from processing payments to offshore gambling websites, PokerStars, Full Tilt and Absolute worked around the ban to continue operating in the U.S.

The poker companies named in the indictment are accused of using fraudulent means to circumvent federal laws and “trick” banks into processing payments on their behalf. The government seeks at least $3 billion in forfeitures and penalties.

The indictment names two principals from each company and others who allegedly worked with them to illegally process payments. A total of five domains were seized, according to Carly Sullivan, a spokeswoman for the U.S. Attorney in Manhattan. They are: Pokerstars.com, Fulltiltpoker.com, Absolutepoker.com, Ultimatebet.com and UB.com.

Bradley Franzen, one of 11 people charged last week, pleaded not guilty today before a U.S. magistrate in New York. Franzen, 41, of Illinois and Costa Rica, is accused of lying to banks about the nature of the transactions they were processing, and of creating fake companies and websites to disguise payments to poker companies.

Players who use the sites can’t be prosecuted under federal law and the U.S. states that have laws against making bets rarely use them against “mere customers,” said I. Nelson Rose, an Encino, California-based consultant to governments and industry on gambling laws.