DOJ Source Said PokerStars, Full Tilt Poker Created “Financial Black Hole”

Written by:
C Costigan
Published on:
PokerStars, Full Tilt Poker

A most interesting post from an obviously well-connected member of the Two Plus Two posting forum (with over 5300 posts to his credit we might add) whereby he attempts to shed some light on why the US Department of Justice went after three of the largest online poker rooms.

It was all about volume, bank transactions that simply could not be accounted for.  It’s the type of thing that raises red flags similar to discrepancies in tax preparations could ultimately lead to an audit.

It’s one of the more informative posts on an excellent industry-related website that attracts the very bets minds in poker and the gambling sector in general. 

The responses are equally as rewarding.  The initiating post to start the thread appears below. 


Hey all,

I know that nerves are a little raw around here right now, and we have been arguing amongst ourselves about skill vs. luck, "fraud" where no one actually lost anything, etc. I posted in another thread that I thought that maybe the term "war on poker" is a little off, and some people responded that there is no way there isn't a "war on poker." Obviously, our opponents are many: Kyl would like to put us six feet under and throw away the shovel, Bachus believes that everyone has the right to their own beliefs so long as they equal those of Spencer Bachus, FoF leaders continue to act as out-of-touch prohibitionists, certain B&M casino companies will use any legal means possible to defend their ever-eroding turf, and so on. It is a battle, but I think that it is important that we understand the motives of the various actors.

I had a good conversation yesterday with a Senator's aide about the poker crackdown. This aide is charged with work on Internet-related legislation, and last week I left him a voice mail with details on the situation and a request for help in retrieving my funds. He called me back yesterday and we had a lengthy conversation; it was obvious that the aide had done his homework and researched the issue before returning my call.

The aide told me that he has a contact at the DOJ, and that he reached out to him (her?) for information on what was going on. The aide shared some good info with me regarding the DOJ's motivations.

Keep in mind that this is feedback that I got second-hand, as in "I talked to a guy who knows a guy." I have no idea who the aide's contact at the DOJ is (for all I know the contact could be a pissed-off janitor or Preet Bahrara himself), so I can't personally vouch for the source's reliability.

According to the aide, his source offered this, verbatim:

- Part of the DOJ's mandate is to enforce federal financial laws

- Part of that mandate necessitates some level of monitoring of banking transactions

- The three targeted sites, in their attempts to get around audits and other rules, were engaging in activities aimed at masking the source of various transactions, or at the minimum making it appear that they did not come from poker or gaming related companies (he did not specifically mention UIGEA but I am assuming that it encompasses this)

- When the above is true, it is difficult for banks to know their customers, and it is difficult for the DOJ to ensure that the funds are not coming from or intended for some criminal purpose such as terrorism (the aide specifically cited terrorism funding as a type of money-laundering issue that the DOJ fears in this case)

- That, combined with the sheer volume of transactions that the sites were initiating, created a massive financial black hole that couldn't be monitored. "Massive financial black hole" were the aide's words, and he said that his DOJ source used that exact phrase.

The aide then went on to say that his source specifically told him that the "black hole" was the main motivating factor behind the crackdown.

Again, that is all second-hand info from a source that I don't know, so take it for what it is worth.

There is *some* good news here, though. I turned that point around and asked the aide, would it not make sense to set up some rules for operators to follow, rather than allow such problems to arise? He responded that it absolutely makes sense, and that he thinks that if someone crafts some reasonable regulatory legislation, that his boss would support it.

- Christopher Costigan, Publisher


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