The owner of two payment processors for online poker sites has agreed to forfeit $13.3 million seized by the FBI in June of last year. Ahmad Khawaja, together with his two firms, Allied Systems and Allied Wallet, reached a civil settlement with the U.S. Government this week in order to keep from getting into further legal trouble.
Khawaja’s two payment processors were at the forefront a federal case involving online gambling fund transfers. Allied Wallet and Allied Systems actively processed funds to players from sites such as PokerStars, the world’s biggest online poker site. The companies also transferred money from outside the U.S. through wire transfers from people who understood that the money was being exchanged as part of the gambling operation.
According to a civil forfeiture complaint by the U.S. Government, the funds constituted proceeds of operating an illegal gambling business that were deposited between January 2009 and May 2009 in an account at Goldwater Bank in Scottsdale, Arizona. Those funds were traceable to PokerStars and other offshore online gambling companies, and the Federal Bureau of Investigation confiscated all $13.3 million at Goldwater Bank in June 2009.
The government has not bothered offshore online gambling sites since the Unlawful Internet Gambling Enforcement Act (UIGEA) was signed into law, instead primarily focusing its efforts on the payment processors that are aiding in completing the financial transactions. PokerStars wasn’t pleased when word of the settlement between Khawaja and the government was released.
“PokerStars does not condone efforts by processors to conceal the nature or purpose of funds used to play online poker,” a spokesperson for PokerStars said. “PokerStars has taken steps to ensure that processors properly disclose the nature of their business to their relevant financial institutions.”
Payment processors are being watched even more closely since the UIGEA’s regulations went into effect in June of this year. The law, passed in 2006, aims to stop online gambling by preventing credit card companies and banks from processing fund transfers for unlawful internet gambling. The fight to regulate online poker in the U.S. took a big step last month with the passage of Barney Frank’s H.R. 2267, the Internet Gambling Regulation, Consumer Protection, and Enforcement Act. However, there’s still a long climb ahead in order to turn the bill into a law, leaving sites like PokerStars concerned in the meantime.
Even if legislation were to pass, there’s no guarantee PokerStars would even be allowed to conduct business in the U.S. One of the amendments added to the legislation during the markup phase was that any company that that has illegally done business in the U.S. would be prohibited from getting a license to operate in the States. PokerStars, Full Tilt Poker, and UB.com would fall under that category and likely be forced out of the U.S. gaming market if that amendment held up.
Stay tuned to Poker News Daily for the latest from Capitol Hill.
