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Online Poker: Gambling911 Motion to Have Seizure Warrants Unsealed

Written by:
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Published on:
Jul/02/2009
Online Poker Seizure

Costigan Media, parent company of Gambling911.com, submitted a Memorandum of Law in Support of its Motion to Intervene and to unseal court records related to the issuance of a seizure warrant of funds tied to online poker's two biggest companies, PokerStars and Full Tilt Poker.

Earlier this month, Gambling911.com broke the story that the US Attorney out of the Southern District of New York had froze funds in excess of $30 million tied to both PokerStars and Full Tilt Poker.  That office had instructed three banks - Citibank, Goldwater Bank and Alliance Bank of Arizona - to freeze the accounts associated with the online poker rooms.

A magistrate judge in the district issued a seizure warrant for an account at a Wells Fargo bank in San Francisco, and a federal prosecutor told Alliance Bank to freeze accounts. In a letter faxed to Alliance Bank, the prosecutor said 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, assistant U.S. attorney for the Southern District of New York.

Up until now these seizure warrants have remained sealed. 

The question presented by the motion filed by Costigan Media on Thursday is whether the public and media are entitled to have the application for a civil seizure warrant unsealed after the issuance and execution of the warrant, but before the government -- which is engaged in a contemporaneous criminal investigation -- has filed any criminal charges.

"We do not want another situation like what happened with BetonSports," expressed Christopher Costigan, Publisher of Gambling911.com, making reference to a July 2006 indictment of what was at the time the largest online sports betting operation. 

The investigation into BetonSports began in 2002 and its customers were caught off guard when several criminal charges were brought against BetonSports and nearly a dozen of its key executives, thus forcing the company to be shut down before customers had a chance to pull their funds.  Players were out millions of dollars as a result and are yet to recoup their losses. 

"Customers of Full Tilt Poker and PokerStars have a right to know if their monies are in jeopardy should charges be leveled against principals in either company," said Costigan. 

Counsel for Costigan Media has contacted the United States Attorney's Office to see if the government would consent to the unsealing of the warrant application and related documents.  The government has indicated that it would not consent. 

All the pleadings were filed under seal.  Although the warrant was issued a month ago, and although the funds are now safely under the control of the government and in no danger of dissipation, the affidavit submitted in support of the warrant application still remains under seal.   So too are any supporting documents relating to this Court's decision to seal the warrant application.

This Motion contends that Costigan Media has the right to intervene for the purpose of seeking and unsealing the documents.  Costigan Media and the public are entitled to see these documents pursuant to both a First Amendment right and a common-law right of access to judicial documents.

Costigan Media functions as a member of the press and exercises rights and privileges arising under the First Amendment of the United States Constitution.

Gambling911.com Staff

 

 

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