United States Federal Government Freezes $30 Million in Online Poker Funds



Over $30 million belonging to at least 24,000 online poker players has been frozen by the U.S. Attorney for the Southern District of New York, according to statements released by the Poker Players Alliance (PPA) and Associated Press.

The seizure of funds, according to the PPA statement, is a result of violations of the Wire Act of 1961 and the Illegal Gambling Business Act. The former has traditionally applied to online sports books. A Southern District judge issued a warrant for “an account at a Wells Fargo bank in San Francisco and a federal prosecutor told a bank in Arizona to freeze an account,” according to the Associated Press. On June 4th, a total of $19 million was frozen in banks in Scottsdale and Los Angeles and, as the PPA explained, “It is important to underscore that in at least two cases, the prosecutor acted and the banks responded without a warrant being issued.”

None of the Southern District Court’s actions appear to come as a result of the Unlawful Internet Gambling Enforcement Act (UIGEA), which was passed in the waning moments of the 2006 Congressional session at the urging of then-Senate Majority Leader Bill Frist (R-TN). The PPA released a statement late Tuesday afternoon noting, “The PPA is disappointed that this unprecedented action has been commenced against law abiding poker players. The payment processor funds frozen by the Southern District of New York belong to individual poker players – not operators of poker websites – and do not represent the proceeds of any gambling activity, much less illegal gambling activity.”

Assistant U.S. Attorney Arlo Devlin-Brown sent a letter on Friday to Alliance Bank of Arizona calling for the seizure of accounts held by the payment processor Allied Systems. In response, the PPA sent a letter yesterday to the Assistant United States Attorney for the Southern District Court requesting to be involved in the process going forward. The PPA has over one million members in total and is fresh off a victory in Minnesota, where the state’s Department of Public Safety rescinded an order to block access to 200 internet gambling domain names by its residents.

The PPA added that the organization has been in contact with the online poker sites whose checks have bounced and has been told that all players will be reimbursed. A member of the Poker News Daily staff received a check from PokerStars dated June 1st backed by a bank in California that cleared three days later without incident. PokerStars currently offers eChecks for depositing and withdrawing. Paper checks are the site’s only other method of cashing out for players from the United States. Paper checks are available for all denominations and sent by first class mail or courier service within 15 business days. Full Tilt Poker also offers eChecks.

According to the Associated Press, a federal prosecutor claimed that the funds in question were seized “because they constitute property involved in money laundering transactions and illegal gambling offenses.” When prompted for comment by Poker News Daily, PokerStars Press Office Donna McLoughlin responded, “PokerStars has not made any comments on this matter thus far. I don’t have any more information for you, I’m afraid.”

Meanwhile, members of the online poker community are reacting to the news. On PocketFives.com, one poster expressed his outrage at the lack of a clear response from PokerStars, the world’s largest online poker site: “The payment processor where I got my Stars check from is part of this. Stars won’t really give me a straight answer.” Rich “TheEngineer” Muny commented on the same forum, “PPA will stand strong here. We have a nice record to date of winning in courts and we’re not planning to start losing now.”

In 2007, a similar occurrence involved Neteller. In July of that year, the company reached an agreement with the United States Attorney’s Office for the Southern District of New York to return frozen money to players. Approximately $60 million was seized; Neteller quickly exited the U.S. market and agreed to pay a $136 million fine. In January of 2007, Neteller founders John LeFebvre and Steve Lawrence were arrested on U.S. soil, which set off the funds seizure.

Stay tuned to Poker News Daily for the latest on this breaking news story.

Poker News Daily columnist Sean Gibson contributed to this report.

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11 Comments

Wes

I wonder what it’s like to live in a free country?


Ken

What is going on?

As if the government doesn’t have enough to do they find time to mess with joe poker player. Who does this government represent? They certainly don’t seem to represent me or my interests. I thought the new regime was going to clean up the doo doo that the last one tracked all over the place, things like the UIGEA which was passed under very suspicious circumstances.

The argument is religious groups and the NFL lobbied to get that passed. Why do religious people care what I do in the privacy of my own home? The NFL is just selfish self interest, no comment needed there. But with the church crowd, who are you to tell me how to believe or what to do? AND DO NOT give me that crap about you have to pay for blah, blah, blah. I dont recall anyone paying for me or any mistake I have made. I get the bill and I have to clean up my own mess. I dont see churches going around paying off mortgages for people losing their homes, or giving jobs to the unemployed etc. This is simply about some people don’t like poker or gambling and they feel it shouldn’t be allowed to exist. Well that is not how a free country works. Now that regular working people are being impacted by these stupid abuses of governmental power, you will see the American people get active and start exercising their rights to life, liberty and the pursuit of happiness.


john w murnion

I dont know why the government thinks they should poke their nose into what I do in the privacy of my home the nine men in black robes have said my bed room is off limits my online poker playing should be the same. my state has a law that says no poker pot can exceed 300 dollars and I usually play at levels on my poker site that respect that law. I usually only put 100$ per month in my account as it happens i havent put any money in my account for 60 days so I think the government should mind their own business


ed

lets get them out ..lets fire all of them in washington, join the movement.


bizhub619sdc

This sucks….and why isn’t JokerStars letting people know their funds have been seized?


Jane

Why do I get the feeling the government is more and more becoming the moral police? Tobacco, gambling, and gay marriage becoming more restricted… meanwhile the feds continue to raid medical marijuana dispensaries. We’re going in the wrong direction.


MbenN

Well, as a “religious” person, I feel that the comment left by Ken is grossly inaccurate regarding those of faith. It is not my mission (nor many other “religious” persons to dictate what other people can and cannot do. This is not about religion, it is about the government. if they are so worried about underage gambling etc, what about other underage activities such as viewing of pornography? It is easier for a 12 year old to view porn than it is for them to play on most poker sites. I feel as a citizen of the US my free will is being limited due to someone else’s choice as to what is or is not acceptable. I would like to decide that for myself. As for the comment left by Jane, I agree with you. Why waste tax dollars and time on this? Jails are overfilled with the wrong people… Let’s crack down on child molesters, rapists and murderers. I don’t care about neighborhood Joe and his dime bag, give him a fine and save the space for the sickos.


John SP

Not only are the funds frozen… I would imagine the IRS now has the names, account numbers and maybe even more…..


Gary

This is madness. I live in fort lauderdale, florida and there are at least 10 places where i can play poker, within a 45 minute drive. So its ok for me to go out into public and play poker, but not ok to play in the privacy of my own home. What has happen to true freedom in this country. I’m afraid it’s been lost long ago. How paranoid of our lovely government. God forbid they miss out on something. There is a simple solution……LEGALIZE IT. Then they wont miss a thing a can get their greedy *%#$( paid too. This is really a joke, and as someone who keeps a large amount in my poker account, i do hope this situation gets resolved quickly.


chubako

oh my god…. this is madness…
i agree with Gary, we shoud LEGALIZE IT !!!!


Gordo357

Do we now live in China where the Government blocks web access to freeroll poker?? Freeroll is poker where I invest 0 dollars and can win the Poker Sites money. So how am I Gambling? To be Gambling don’t I have to invest my own money? Everyday we lose more and more rights in the USA and we all sit back and take it. When will we rise again and take this the USA back. I am sick of all the meaningless laws out there telling us what we can and cannot do. Land of the Free my ass. Land of the Government control!!


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