Online Poker Founder Brent Beckley Pleads Guilty in U.S. Fraud Case

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By Thom Weidlich - Dec 20, 2011 12:02 PM ET

(Bloomberg) - Brent Beckley, a founder of Absolute Poker of Costa Rica, pleaded guilty in a U.S. illegal-gambling case that seeks at least $3 billion in forfeitures and penalties.

Beckley, 31, a U.S. citizen, pleaded guilty today before U.S. Magistrate Judge Ronald Ellis in Manhattan to conspiracy to commit bank fraud and wire fraud and conspiracy to violate an Internet gambling law. The sentencing guideline range in his plea agreement is 12 to 18 months in prison, Ellis said. Sentencing is set for April 19.

“I knew that it was illegal to accept credit cards from players to gamble on the Internet,” Beckley said to the judge before his plea. “I knew that it was illegal to deceive the banks in this way.”

Beckley and other defendants helped conceal money received from U.S. gamblers by disguising it as payments to hundreds of non-existent online merchants purporting to sell items such as jewelry and golf balls, according to prosecutors in the office of U.S. Attorney Preet Bharara in Manhattan.

Beckley’s attorney, Robert Cleary, declined to comment after the hearing.

Continued Operations

Prosecutors allege that after the U.S. enacted a law in 2006 barring banks from processing payments to offshore gambling websites, Absolute Poker, Isle of Man-based PokerStars and Ireland-based Full Tilt Poker worked around the ban to continue operating in the U.S. The case is one of several against Internet gambling companies Bharara has brought.

Bharara’s office in April announced an expanded indictment against the founders of the three companies, which are the leading online poker sites doing business with U.S. customers, according to the indictment.

They are accused of using fraudulent means to circumvent federal laws and “trick” banks into processing payments on their behalf.

Another defendant, Bradley Franzen, pleaded guilty in May.

The Internet poker market was $5.1 billion last year, 7.1 percent higher than 2009, according to U.K.-based H2 Gambling Capital, which supplies data on the industry. The global online gambling market now is about $30 billion.

The case is U.S. v. Scheinberg, 10-CR-336, U.S. District Court, Southern District of New York (Manhattan).