A major crackdown on online gambling has taken place in the US, led by the FBI and US Attorney’s Office. The charges leveled against the Internet sites range from bank fraud, illegal gambling, and laundering billions of dollars in relation to illegal gambling profits, according to an article from USA Today.
The FBI mentions 11 defendants it has indicted on these charges facing up to 20 years in prison. The most salient among the Internet gambling industry are PokerStars, Full Tilt Poker, and Absolute Poker. The swift actions of these investigative agencies led to the seizure of five Internet domains as well as restraining orders against 75 bank accounts set up by the sites to process payments. The US attorney’s office has gone further and would level $3 billion in punitive damages against these sites.
In the same article from the USA Today, the defendants, according to a statement by US Attorney Preet Bharara, deliberately created an illegal fraud scheme intended to deceive various US banks, and additionally bribing others to launder billions in illegal gambling proceeds. Specifically, the defendants are allegedly in violation of the Unlawful Internet Gambling Enforcement Act originally passed in 2006.
In response to the charges, the companies argue that they operated outside the jurisdiction of the US law, as they are officially ‘offshore’ companies. However, the feds note that the companies’ involvement with US banks makes them prosecutable under US law. Additionally, according to the feds, the acts of laundering deliberately undertaken by the companies to disguise the nature of the transactions are the most damning for the companies. The companies allegedly falsified the nature of the payments to hundreds of fictitious online merchants who were purportedly receiving payment for merchandise such as “jewelry and golf balls.” Then, according to the FBI the poker companies deceived banks into processing roughly a third of what the players would pay to gamble on the site.
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