Chad Elie, a former online poker payment processor and one of eleven people named in the infamous Black Friday indictment was sentenced to five months in prison Wednesday by a judge in a Manhattan federal court. Elie had previously pled guilty to a single charge of bank fraud back in March 2012.
Elie served as a payment processor for all three online poker rooms that were hammered by the United States Department of Justice on Black Friday: Full Tilt Poker, PokerStars, and Absolute Poker. In the Black Friday indictment, the U.S. government said 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.”
In a statement Wednesday, Preet Bharara, the United States Attorney for the Southern District of New York, put forth the example of Elie falsely representing to a bank in which he opened an account that his transactions for PokerStars were for “payday loans.” Other transactions at another bank were supposedly for “Internet membership clubs.”
Elie was also involved with John Campos, former Vice Chairman of the Board of Directors and part owner of SunFirst Bank in Utah. Campos accepted an “investment” from Elie in exchange for processing online poker payments at his bank. Campos was sentenced to three months in prison in June.
U.S. District Judge Lewis Kaplan, who sentenced Elie Wednesday, also presided over Elie’s plea hearing in March. At that time, when Elie pled guilty, Kaplan asked him, “You are pleading guilty because you are guilty?”
“Yes, your honor, I know that my conduct was wrong,” Elie replied.
The charge to which Elie pled guilty carried with it a maximum sentence of five years, but under the terms of the plea agreement, Kaplan was going to limit the sentence to between six and twelve months. Obviously, five months actually comes in just under that range.
In addition to the prison term, Elie had to forfeit all claims to $25 million seized from his payment processing accounts, pay an additional $500,000 penalty, and will be subject to an additional two years of “supervised release.”
Two other defendants from the Black Friday indictments were sentenced this summer. Brent Beckley, co-founder of Absolute Poker, pled guilty to Conspiracy to Commit Bank and Wire Fraud in December and was originally scheduled for sentencing this spring. Judge Kaplan pushed it back to July, however, so that an upward adjustment could be considered. In the end, Beckley was sentenced to 14 months in prison, well within the guideline of 12-18 months.
Also in July, Ira Rubin, another former payment processor, was sentenced a three year prison term, much longer than the 18-24 month that the sentencing guidelines suggested. Rubin had a history prior to his online poker exploits and Judge Kaplan used his past as part of the reason for the harsh penalty. According to Judge Kaplan, Rubin was “an unreformed conman and fraudster. A significant sentence is necessary to protect the community.”
