As reported by Forbes Magazine, Federal prosecutors have seized nearly $8 million from financial institutions in Washington State that were holding money for processors of major online poker sites like PokerStars, Full Tilt Poker, UB.com, and Absolute Poker. The move reportedly came in the past two weeks and is the latest in the Department of Justice’s crackdown on online gambling in the U.S.
Online poker sites have used payment processors to carry out transactions with customers before and after the Unlawful Internet Gambling Enforcement Act (UIGEA) went into effect in 2006. However, the Department of Justice stepped in and began seizing funds from banks across the U.S. in recent years, creating havoc for poker players wondering whether their online bankrolls are safe.
According to four civil forfeiture complaints filed in Federal court in Seattle since October, Federal prosecutors seized cash in accounts at Bank of America, J.P. Morgan Chase, Wells Fargo, and SunTrust. The money allegedly belonged to payment processing firms like Arrow Checks, Secure Money, Etegrity Processing, Anaya Trading Solutions, and Blue Lake Capital Management and Logistics.
The largest of the forfeiture cases, filed in December and involving $5.1 million, centered on Arrow Checks. A Washington State task force was notified by a witness in June that he had received a payout check from Arrow Checks that came from online poker winnings from PokerStars. The investigation tracked more than $20 million of wire transfers from Canada and Texas to Arrow Checks accounts at Bank of America controlled by Scott Seguin and Justin Sather, court documents say.
Federal prosecutors claim that Seguin and Sather were operating an unlicensed money transmitting business and violated the Federal Wire Act of 1961 “because online gambling is illegal in Washington State,” the Forbes article said.
The article also revealed that other payment processors operated six bank accounts at SunTrust and Wells Fargo controlled by Sanjay Panya that Feds say represented proceeds from Full Tilt and Absolute Poker. The Feds seized $1.3 million in the accounts connected to Panya in November, claiming he was operating an unlicensed money transmitting business violating the Wire Act.
The other payment processor companies involved in the civil forfeiture actions were run by Brian Kenny and Javier Carillo, both of whom court documents say facilitated payments to Washington State residents derived from online poker play at Ultimate Bet, now UB.com.
In June, Federal authorities in New York seized bank accounts worth $34 million belonging to 27,000 online poker players. The accounts were managed by Allied Systems and Account Services, which handled cash for various online poker sites. Ahmad Khawaja, who owned the payment processing companies, reached a $13.3 million civil forfeiture settlement with the U.S. prosecutors in August before exiting the country.
Then, in November, the U.S. Government seized funds from popular payment processor eWalletXpress. After weeks of questions regarding the reason behind the company’s “technical problems” on its website, eWalletXpress revealed to its customers that it had been served a warrant by authorities. The processor allowed customers to cash out their remaining balances and then shut down its U.S. operations in December.
This latest news is yet another blemish on the status of poker in the Evergreen State. Washington’s Supreme Court upheld a 2006 state law last September that made it a felony to play online poker for money. The ban being upheld caused PokerStars and Full Tilt Poker to cease providing real money poker for Washington residents shortly thereafter, resulting in many high-stakes online players having to make difficult life decisions.
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