|
 Online
Gambling Community
Reacts Over PayPal
Move
Heading into
Thursday it remained
unclear whether a
summons of customer
information from
payment solution
PayPal had any
relation to online
gambling.
Gambling911.com
first broke the
story Wednesday that
PayPal
had been summoned
by IRS
regarding
offshore
credit cards
requiring them to
produce various
account records
related to the use
of offshore credit
cards. Some
online gamers have
received the
notices.
The
summons relates to
the IRS’ offshore
compliance program
in which the IRS has
sought information
about offshore
credit card accounts
from a number of
companies.
The
summons and court
order both issue
from the United
States District
Court in an action
entitled: In The
Matters of the Tax
Liabilities of John
Does, Case No.
CV-05-04167-JW.
"In my opinion this
is a huge breach of
personal privacy -
they should not be
allowed to comb
through citizens'
accounts on a
fishing expedition
for illegal
activity," one tax
consultant told
Gambling911.com,
asking to remain
anonymous. "I have
a feeling, that
while they were only
in the gambling
industry for a year
- information
obtained from this
sweep could be used
to nail a lot of
people on unclaimed
income."
Edward Leyden,
President of
iMEGA.org,
believes that the
matter related to
PayPal may have
little to do with
online gambling
despite the fact
that virtual gaming
havens of Isle of
Man and Dominica are
named in the
original complaint.
Dominica had hosted
some of the earlier
Internet gambling
firms and was still
doing so during the
time of the initial
investigation.
"This appears to be
part of a larger IRS
investigation that
commenced several
years ago of tax
issues involving
Americans holding
credit cards issued
by banks located in
places the Treasury
Department considers
to be potential 'tax
havens'. While i-gaming concerns certainly
may become caught
up in this
effort, this does
not mean
that Internet gaming
in the primary
target of the
investigation."
PayPal had been
fined by disgraced
then Attorney
General of New York,
Eliot Spitzer, for
its participation in
online gambling
during 2002.
PayPal had only been
involved in the
industry for a
little more than one
year prior to an
acquisition by eBay
and the Spitzer
indictment.
U.S. Attorney for
the Eastern District
of Missouri was also
involved in the
matter.
The U.S. Attorney's
office had alleged
that PayPal had
provided services to
offshore sites in
violation of 18 U.S.
Code 1960, which
prohibits
transmitting funds
"derived from a
criminal offense,"
and 18 U.S. Code
1084, which relates
to the transmission
of information about
wagers. The $10
million settlement
represents what both
parties agreed
represented
forfeitable revenue
that PayPal obtained
from processing the
gambling
transactions.
As part of the
settlement, PayPal
also agreed to
maintain a corporate
compliance program
for at least two
years.
----
Christopher
Costigan,
Gambling911.com
Publisher
CCostigan@CostiganMedia.com
Originally published
April 23, 2008 10:39
pm EST
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