Chad Elie, one of the eleven men named in the April 15th, 2011 “Black Friday” online gambling indictments, has pleaded guilty to one of the nine crimes with which he was charged.
Elie was set to stand trial on April 9th for his role as a payment processor for PokerStars, Absolute Poker, and Full Tilt Poker. The Black Friday indictment stated that Elie opened “bank accounts in the United States, including through deceptive means, through which each of the Poker Companies received payments from United States-based gamblers.” He was charged with nine counts in total, including violating the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA), conspiracy to engage in money laundering, and operating illegal gambling businesses.
Rather than risking years in prison, Chad Elie decided to plead guilty to a single count of conspiracy to commit bank fraud. In a Manhattan court, U.S. District Judge Lewis Kaplan confirmed with Elie, “You are pleading guilty because you are guilty?”
Elie replied, “Yes, your honor, I know that my conduct was wrong.”
The charge carries a maximum sentence of five years in prison, but under the terms of the plea agreement, it appears that Judge Kaplan will limit the sentence to between six and twelve months. Elie must also hand over $500,000. He is currently free on $250,000 bond and is due back in court for sentencing on October 3rd.
Also scheduled to stand trial on April 9th is John Campos, Vice Chairman of the Board of Directors and part owner of SunFirst Bank in Utah, who accepted an “investment” from Elie to process payments through his bank. Both he and Elie had previously requested their cases be thrown out, citing the U.S. Department of Justice’s December clarification that the Wire Act of 1961 only makes online sports betting illegal, not poker or other gambling. Of course, this request was denied.
Campos has yet to enter a similar plea as Elie, yet there are rumblings in the industry that he is expected to do so, particularly as the reality of his trial draws nearer. One thing that should worry Campos is the recent revelation that Daniel Tzvetkoff, former owner of payment processing company Intabill, will testify for the prosecution at the April 9th trial. Chad Elie worked with Intabill, which disguised online poker payments as being for “repayments of short-term loans, transfer of funds to prepaid debit cards, and e-commerce purchases.”
Tzvetkoff was arrested in April 2010, a year before the Black Friday indictments, on the same charges as the Elie and Campos. He was surprisingly released on bail five months later. Business Insider theorized that Tzvetkoff agreed to help the U.S. government build its case against Elie, Campos, and the other men named in the indictments, in exchange for his freedom.
