You're mistaken. The main underlying crime isn't illegal gambling, it's bank fraud. This is why Absolute and not Bodog and the others are indicted.

This is why the US doesn't care about this small measly amount of money,its meaningless, the US need trillions not billions.

Same goes for the "tax it' argument for regulating online poker at the federal level, its such as small amount of revenue it might as well be zero. Online poker tax revenue plays better at the state level, were the amounts have actual meaning. Certainly tax revenue should continue to be part of our argument to Congress but not our main argument.

The only people a seizure of this size helps are the DOJ prosecutors in the SDNY,money seizures are always good for their careers.

False. DUCY?

No, I'm 100 percent sure that I am right.

Good thread despite the trolls. Thanks to those with a background in Law for your input.

One can slap Quint for his grammatical errors, but his legal arguments are right on the mark. Realistically the arguments against his positions require a real reach in terms of imagination.

My roommate is a white-collar criminal attorney who regularly appears in federal court. I am an attorney who works for a big government agency that regularly coordinates with the DOJ. (would rather not identify myself online, especially here)

Whether Quant's arguments are "right on the mark" is debatable, but this thread is asking the right questions. We should run with this instead of breaking the man down. To be fair, there is no "right" answer to the legal issues presented by the indictment.

I'd like to propose some ground rules to make this discussion more fruitful: 1. identify whether you are/are not an attorney before commenting; 2. be respectful; and 3. add something to the conversation or don't post.

I'm a criminal defense attorney but don't specialize in constitutional law. I've taken courses in the subject but would get smoked by a specialist.

Your humility makes you seem smart. Thank you for the breath of fresh air. If everyone in this thread was like you, we might get somewhere.

Just some clarification.

In this thread people have made claims that PS/FT fraudulently charged their credit cards. One Person said that it appeared as a cell phone charge.

Have other people reading this thread had similar charges appearing on their credit card statements when depositing on Stars/FT.

I've only used a prepaid Visa Card or a E check to deposit on either site ever and every time its has been clear that Stars/FT have been the ones debiting said accounts.

So are these charges from a time when Stars/FT weren't able to get funds deposited on the site like I got my funds on the site?

Secondly has the UIGEA ever been challenge in court? Is say this because in my layman's eyes it seems borderline constitutional.

It seems that the majority opinion here and on the inter web is that when the DOJ brings a case its like winning already. That nobody challenges that case in court. Its has been said here that Microsoft took that challenge and won a victory of sorts as I recall. Furthermore I seem to recall many a MOB boss fighting and winning cases against the DOJ with charges that were brought up on a similarly amorphous law like the RICO ACT.

In those instances the best defense seemed to be the creditability of the states witness. I see some resemblance between those "flipped" mob associates and the guy from Australian who flipped on Stars/Ft.

Arthur andersen is a horrible example. They were an audit firm and by law couldnt provide audit services to public companies while under indictment. Audit fees accounted for a huge portion of their revenues, hence the went out of business. I agree with most others, quant seems clueless and cant even translate thoughts to accurate analogies.

Does it make a difference that this is SDNY and not the DOJ?

You sure?

July 2008 – The US Department of Justice seized $24 million dollars of Bodog’s money claiming it was used for money laundering and to fund illegal sports betting.

Bodog has had US Govt Agents chasing it for years trying to find their processors. You really think they havent done the same activities to keep the payouts, deposits coming. Im sure everyone who provides service to US players are doing almost the same exact activities alleged by DOJ against PS FTP and AP

They open accounts at banks and do not disclose they are poker.gambling operations to get around UIGEA.

It is one of the offices of the DOJ Its the DOJ of The Southern District of New York

Absolutely correct WEC.

And that is one of the ironies of the whole thing. Stars, FTP and UB were easier targets for the DOJ precisely because they sought to have more open processing (and also probably because that's who the turncoat processor had info on).

The sportsbooks (and now sites) who do the best job of hiding the nature of their transactions from US banks will now be the ones who continue to service the US market.

Skallagrim

I'm not a lawyer but I have a friend who is. He gave permission for me to x-post this here from another location, but he doesn't want his name or any info associated with it.



Just did a little research.

Money laundering is defined as:

(a)(1) Whoever, knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity, conducts or attempts to conduct such a financial transaction which in fact involves the proceeds of specified unlawful activity--

(A)(i) with the intent to promote the carrying on of specified unlawful activity; or

(ii) with intent to engage in conduct constituting a violation of section 7201 or 7206 of the Internal Revenue Code of 1986; or

(B) knowing that the transaction is designed in whole or in part--

(i) to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity; or

(ii) to avoid a transaction reporting requirement under State or Federal law,

shall be sentenced to a fine of not more than $500,000 or twice the value of the property involved in the transaction, whichever is greater, or imprisonment for not more than twenty years, or both. For purposes of this paragraph, a financial transaction shall be considered to be one involving the proceeds of specified unlawful activity if it is part of a set of parallel or dependent transactions, any one of which involves the proceeds of specified unlawful activity, and all of which are part of a single plan or arrangement.

___________________________________________

Key question is: what are the proceeds of specified legal activity? Are the proceeds profit?

This is from a U.S. Court of Appeals decision (282 F.3d 475):

If Congress had levied a tax on the “proceeds” of a casino, most speakers of English would understand this as a tax on the profits of the business (what's left after paying suppliers and the winning gamblers) rather than on the amount wagered. It makes sense to read “proceeds” in § 1956(a)(1) the same way. If instead the word “proceeds” is synonymous with gross income, then we would have to decide whether, as a matter of statutory construction (distinct from double jeopardy), it is appropriate to convict a person of multiple offenses when the transactions that violate one statute necessarily violate another. See, e.g., He-flin v. United States, 358 U.S. 415, 79 S.Ct. 451, 3 L.Ed.2d 407 (1959); Simpson v. United States, 435 U.S. 6, 98 S.Ct. 909, 55 L.Ed.2d 70 (1978); Busic v. United States, 446 U.S. 398, 100 S.Ct. 1747, 64 L.Ed.2d 381 (1980). By reading § 1956(a)(1) to cover only transactions involving profits, we curtail the overlap and ensure that the statutes may be applied independently to sequential steps in a criminal enter-prise.

This is from a later case: (558 F.3d 630):

No more need be said about Kubly's conviction for using interstate facilities to conduct a racketeering enterprise. Money laundering is a different matter. The evidence did not show what Kubly did with the business's net revenues. The prosecutor's theory is that Kubly violated § 1956 simply by paying business expenses: rent, advertising, utilities, and so on. The prosecutor recognizes that in United States v. Sci-alabba, 282 F.3d 475 (7th Cir.2002), and Santos v. United States, 461 F.3d 886 (7th Cir.2006), affirmed, --- U.S. ----, 128 S.Ct. 2020, 170 L.Ed.2d 912 (2008), we held that the word “proceeds” in § 1956 means an illegal business's net income rather than its gross in-come-in other words, that “proceeds” are profits, not receipts. But the United States maintains that what remained after the prostitutes received their cut was the business's net profits, which could not be spent on anything without violating § 1956.

That's a preposterous understanding of net re-ceipts. To determine the net proceeds of a transaction, which is to say the profits, one must subtract all costs of doing business, not just an arbitrary subset of the costs. True, the only costs at issue in Scialabba and Santos, which concerned unlicensed gambling, were the gamblers' winnings; we held that by paying the gamblers the defendants did not engage in financial transactions with proceeds. That does not imply, however, that only an illegal business's largest (or first) expense is outside the statutory scope of “proceeds.” Size matters not, Yoda tells us. Nor does time. Whether Kubly paid the rent before or after paying the prostitutes has nothing to do with the distinction be-tween gross and net. And the prosecutor is wrong to suppose that the prostitutes got the first cut of cus-tomers' money. Rent usually is paid in advance of occupancy; advertising certainly precedes the cus-tomers it generates. Only the utility bills can be paid after the transactions to which they pertain.

Scialabba holds that paying the ordinary and necessary expenses of a business is not a federal crime, just because that business violates state laws. That principle covers this case (at least it covers the proof at trial, for the prosecutor did not show what Kubly did with whatever remained after expenses).

Reading these together I think makes it clear that "paying the gamblers the defendants did not engage in financial transactions with proceeds." And I think they won't get a conviction on money laundering under this. That doesn't help us, and it doesn't mean the other charges won't stick, but I think the feds have a real problem under the money laundering statute.

+1

I only hope that FT and PS have the guts to take the case to trial.

Different situation. I'd say that FT and PS got the heads-up when the owner of Neteller was arrested, right after the UIGEA passed. Years ago. They knew the other sites didn't want to play chicken with the US government. But they were willing. And there was another heads-up when player accounts were frozen awhile ago. And again when the stuff hit the fan in Washington State. There have been warnings. They have not been quiet things. The sites continued to operate. Hopefully, they have their teams of lawyers on call and ready to go.

And we have no clue whether they have been getting letters from the DOJ, formal and informal, to stop it or else. But, really, did they need to? Of course this was coming. That it all happened on one single day shocked us -- but did it shock the sites?

This thread has started a good discussion, I think. And most of us make typos. I certainly don't proofread everything I post. I wish I did but I don't. Don't sweat the nit-pickers.

I am not a lawyer, nor do I pretend to be one on internet forums. However, I did serve on a jury in a federal money laundering case. The law was made VERY clear to us jurors: to convict the defendants of money laundering the prosecution had to prove that the defendants were aware that the source of the funds came from certain specified criminal activities. The only evidence that the prosecution presented in this regard was that the defendants' behavior was suspicious. Given this criteria, since the prosecution did not present any evidence with regard to the defendants knowledge of the source of the funds, all 5 defendants were acquitted of money laundering charges.

In the case against the online poker sites, it seems that it would be even more difficult to prove that the defendants were aware that the source of the funds was from criminal activity, given the ambiguity of the law with regard to how illegal gambling is defined. After all, how can the defendants "know" that the source of the funds is from illegal activity when no one seems to know definitively whether poker is included under the definition of "illegal gambling".

Aside from the money laundering count, 7 of the 8 remaining counts are directly related to operating an illegal gambling site. So 8 of the 9 counts in the indictment are clearly dependant on the definition of "illegal gambling".

In regard to the remaining count on the bank fraud charges, I have no experience or expertise in this area so I will defer to others who do. Could it still be considered fraud if the source of the funds is not an illegal activity?

Very interesting. I just hope the poker sites take it to court.

THIS! Literally makes me sick to my stomach. Despicable people running this country.

My thoughts exactly. Unless they can prove that poker is an illegal activity, then the basis for fraud, and other counts melt away. I know a few posters said that its laughable if we believe that the skills games argument of poker is going to make a difference, but, I do feel it matters.

I am not a lawyer; I only play one on tv.

I'm not a lawyer, but I did stay at a Holiday Inn Express last night.

I just can't help but believe it's more than coincidental that in the week leading up to the indictments, two governing bodies passed legislation to legalize online poker in their area?

April 11: Washington DC passes legislation to legalize online poker. Intrastate only, but it's the foundation needed for when federal legalization passes.
April 13: Nevada AB 258 passes unanimously, legalizing online poker in NV. Again, Intrastate only.

Obviously this is state level legislation that was passed, but doesn't it just reek of clearing out the market for internal players to take over?

9 of 698

#TeamUSA
#NeverLoggingOff

I'd like to give my take on this. I'm not a lawyer, but studying law is a hobby of mine. I acquired this hobby a few years back when the government tried to railroad me into copping a plea on a BS drug charge. They searched me illegally and discovered some pills that I had in my car. I had a prescription for the pills, yet it still took me MONTHS to get them to drop the charges.

There are 2 issues to consider:
1. Do these charges have merit?
2. What is the practical likely outcome of these charges?

As for #1, the answer is that the charges are insane, totally baseless, completely absurd, and without merit according to the law.
Everyone wants to talk about subject matter jurisdiction, but few people are aware of a component to subject matter jurisdiction known as standing. The important elements of standing are (1)the violation of a right, and (2) injury (also known as 'harm'). In other words, if there is no victim, there is no crime. Period.
You will NEVER find an attorney that will admit to this, even though the Supreme Court has ruled hundreds if not thousands of times that this is the case. Here is a good website with some excellent relevant caselaw:
http://marcstevens.net/component/con...reference.html

If you take the time to read those cites (sites? sorry spelling), you will soon discover that the entire judicial system of the USA is nothing more than an extortion racket. Consider that the government almost NEVER has a case, because almost all of the fake 'crimes' that the government prosecutes people for have no victim.

Which brings us to number 2. What will happen in the real world? Unfortunately, our government and especially our judicial system is run by criminals that don't care at all about the law. Ergo, this will probably end badly for the true victims- us.