More Than $30 Million Frozen in Online Poker Accounts

Written by:
C Costigan
Published on:
Instant eChecks Online Poker Seizure

As first reported on Gambling911.com Friday, the US Attorney's Office out of New York has put a stop to the Instant eCheck deposit and withdrawal method at both Full Tilt Poker and Poker Stars.  More information has come out Tuesday as it was now revealed that the US Government has seized some $30 million of both online poker company funds.

The Poker Players Alliance told The Associated Press that the U.S. attorney for the Southern District of New York instructed three banks to freeze the accounts.  The PPA has long insisted that the Unlawful Internet Gaming Enforcement Act (UIGEA) does not apply to online poker. 

Documents obtained by the AP show that a judge in the district issued a seizure warrant last week for an account at a Wells Fargo bank in San Francisco, and that a federal prosecutor told a bank in Arizona to freeze an account.

The Associated Press reports that  a letter dated Friday and faxed to Alliance Bank of Arizona, the prosecutor said that accounts held by payment processor Allied Systems Inc. are subject to seizure and forfeiture "because they constitute property involved in money laundering transactions and illegal gambling offenses." The letter was signed by Arlo Devlin-Brown, the assistant U.S. attorney for the Southern District of New York.

Devlin-Brown also asked that the banks treat the monies as "legally seized funds" by the FBI, stating that the US Government has "probable cause that the gambling payments of U.S. residents had been directed to offshore illegal Internet gambling businesses". 

So far only Poker Stars and Full Tilt Poker appear to be affected by this latest seizure.

John Pappas, executive director of the Poker Players Alliance, called the government's move an "unprecedented action" against online poker players.

In a letter Monday night to Devlin-Brown, Pappas said that the funds belong to the alliance's members, and requested that his group be notified and given the opportunity to be heard regarding attempts to seize the frozen funds.

"The PPA will pursue every legal course available to ensure that poker players' funds are not seized and their right to play poker online is protected," he wrote.
The US Justice Department apparently sees things different than John Pappas.

Late last year, PartyGaming founder, Anurag Dikshit, pled guilty to illegal Internet gambling and agreed to cooperate with the U.S. Justice Department in an investigation of Party Gaming, which prior to passage of the UIGEA, owned the largest online poker room in the world, PartyPoker.

Dikshit entered the plea to one count of online gambling in violation of the Federal Wire Act, which the PPA has long insisted does not apply to online poker.  Dikshit also agreed to forfeit $300 million.

"I came to believe it was in fact illegal under U.S. law," Dikshit told U.S. District Judge Jed Rakoff in New York, referring to PartyGaming's activity. "I have taken full responsibility for my actions."

Ironically, it was PartyGaming that initially helped in the creation of the Poker Players Alliance.  At the time of Dikshit's plea, many industry analysts believed Party's co-founder had opened a can of worms. 

Customers of PokerStars have confirmed payment of winnings by other withdrawal means, however, the eCheck features remain dismantled.

Christopher Costigan, Gambling911.com Publisher


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