Also, I feel bad about the lack of a graph, so here's one. Doesn't have much to do with the indictment, though.

These questions are beyond my pay grade. I'll just note that it appears that the defendants are scattered among several countries, which may have different views as to whether to cooperate with extradition. The first step in the analysis would be to figure out which countries even have extradition treaties (though it can happen without a treaty too).

Conspiracy is the crown jewel for federal prosecutors. It is merely an agreement to commit a criminal act, and the penalties are often as severe as the ones for the commission of the crime itself. It's also great for the government because once you flip someone you are basically home on a conspiracy charge, assuming they are credible.

Interesting... I get the same FBI message at UltimateBet.com as I do at the others. So I guess even if they weren't mentioned by name, UB is still involved.

http://www.ultimatebet.com/

It's also broad as hell in some jurisdictions, to the point where you literally do not need to have any communication with co-conspirators.

Thanks for the info Wynton.

Thanks Wynton. I also want to thank everyone in advance for not hijacking this thread. This is very serious business to a lot of people here, so I want this thread to remain about this case, not theoretical views about what changes in government structure should or could be made to fix this. There are a lot of places to make posts like that, so I want to reserve this thread for discussions about the actual case.

Tytyty

Wynton,

Very good posts. Probably the best about this issue.

I have some questions regarding the indictment. It is said that some bank processors are also seized, right? (Or something like that). Are Neteller and Moneybookers among them? Is there any "safe" method to cash out from PS and FT?

Thanks.

The family had alotta a buffers imo..

Wynton,

Thank you for a truly outstanding post.

Al

Wynton,

Another question, if you alow me to ask. The indctment has a list of many bank accounts. Is there any chance players funds were kept on those accounts? If so, things are a litle worse, aren't they?

Thanks, again.

I think if your a US player your in the biggest hole. I am curious how other countries withdrawals will be affected. I was able as a CDN to request a check withdrawal and I know they process the CDN requests in Vancouver. I was not able to request a moneybookers withdrawal at all.

Will see what happens. I feel for the American players. Can you imagine some of the high stakes players and what they may have frozen on the sites.

The sad thing is Congress or your elected official will not be to concerned as the poker player represents a small minority.

heh so hot women get arrested more and/or convicted less?

anyway, thx for the thread.

Civil complaint is online.

http://www.scribd.com/doc/53170382/3...lt-UB-AP-et-al

Get cracking OP!

Reading over the civil complaint there were two things that stood out ot me that may mean nothing but were interesting:

1. IoVation was not mentioned as a defendant in the case but Titlware is. My understanding is that both companies are essentially the same in that they created the software and merely license it to the sites.

2. There was a few uses of the phrases "largely" and "mostly" by the DoJ in describing the acts committed. Does this not offer wiggle room to the defendants if the prosecution can't explain away adequately the cases that didn't fit the indictment?

I once did a lot of research on different forms of gambling and the law for some articles I was writing, and I think the feds will have a pretty hard time selling that poker is gambling, especially using the legal definition of "gambling" where it is composed of prize, chance and consideration. If memory serves there is precedent on the books where they have to not only prove that chance is present in the game, but also that it is the predominant factor in determining the outcome. Seems like that's going to be pretty hard to do when the Defendants have like $2 billion on the line to mount a defense with.

In the forfeiture section of the indictment, the government asserts the right to the DEFENDANTS' interests in numerous entities, businesses and dozens of bank accounts. Neteller and Moneybookers does not appear to be on the list (unless I read it too fast).

But this doesn't really answer your question. First, the indictment only refers to the interest of the DEFENDANTS, not other parties' interests (such as players). (This may or may not be a distinction with a difference as a practical matter.) Second, I haven't reviewed the civil complaint (yet). And it's possible that Neteller and Moneybookers have been pursued separately.

I haven't a clue as to whether there is a safe method for a person to cash out.

Can't tell from the indictment whether players funds were in those accounts, but it sure seems possible If players' funds are there - or are commingled - could be pretty bad for the players.

I really don't want to hazard guesses as to whether people have a real chance of getting their money. If the sites are going to mount a serious defense, one would think that they'd strive to keep the players happy, if at all possible. On the other hand, the government is asking for the return of literally billions of dollars, which may be somewhat hard to find just by looking under the mattresses.

As promised, I'll start listing the elements of the crimes for each count, i.e., what the government actually must prove to win a conviction.

(Down the road, I'll try to discuss potential defenses and sentences, depending upon interest level.)

Elements of a violation of the UIGEA

The UIGEA is found in 31 USC 5363.

Here is the literal language of Section 5363:

No person engaged in the business of betting or wagering may knowingly accept, in connection with the participation of another person in unlawful Internet gambling--


(1) credit, or the proceeds of credit, extended to or on behalf of such other person (including credit extended through the use of a credit card);

(2) an electronic fund transfer, or funds transmitted by or through a money transmitting business, or the proceeds of an electronic fund transfer or money transmitting service, from or on behalf of such other person;

(3) any check, draft, or similar instrument which is drawn by or on behalf of such other person and is drawn on or payable at or through any financial institution; or

(4) the proceeds of any other form of financial transaction, as the Secretary and the Board of Governors of the Federal Reserve System may jointly prescribe by regulation, which involves a financial institution as a payor or financial intermediary on behalf of or for the benefit of such other person.


Not surprisingly, there is a dearth of cases interpreting this language. A quick and dirty look at Westlaw shows exactly ONE case to discuss the statute, Interactive Media Entertainment and Gaming Ass'n Inc. v. Attorney General of U.S., 580 F.3d 313 (3rd Cir. 2009). This case does not interpret the elements of the crime, but is still relevant here because it addresses a claim that the law was unconstitutionally vague (i.e., too vague to give a person notice of what is criminalized, thereby violating Due Process).

In rejecting the vagueness argument, the Third Circuit made the following observations:

1. The Act prohibits a gambling business from knowingly accepting certain financial instruments from an individual who places a bet over the internet, if such gambling is illegal at the local in which the business is located or where the individual initiates the bet.

2. While the law does not, in itself, outlaw any gambling activity, it incorporates other Federal and State law. The court said a vagueness problem did not arise simply because the law might differ among the states. The difficulty in determining the state law of the bettor, the court said, was also not a constitutional problem.

In any event, because no court has explicitly said what the elements of the crime are, it's up to us to look at the language of the statute. You guys can do this as well as I can, but it appears pretty clear to me. I'd say the elements are:

1. The defendant must be "engaged in the business of betting or wagering."

2. In connection with that business, the person must have "knowingly accepted" either (a) credit; (b) an EFT; (c) a check; or (d) proceeds of a financial transaction.

3. The acceptance of the credit/eft/money,, etc must have been "in connection with the participation of another person in unlawful internet gambling.

Courts could rephrase this or re-arrange the elements. Courts can enumerate it so it's 2 elements or 4 elements. But the intent of the law seems pretty obvious. Businesses can't knowingly accept money from someone participating in unlawful internet gambling, and whether the gambling is illegal is decided by referring to the federal and state laws where the bettor is (as well as where the business is locate).

On first blush, I agree with many posters here that it's hard to imagine a FACTUAL defense to these charges. But there are definitely some viable LEGAL defenses, which I'll get into later.

Elements of conspiracy to violate UIGEA

This is easy. As mentioned earlier in this thread, a conspiracy is simply an agreement to do something illegal between two or more people. So, the elements of this charge are the same as I just mentioned for the substantive violation of UIGEA, with the addition of language requiring the jury to find that two or more people agreed to violate that law.

As a practical matter, the proof of the conspiracy charge and substantive violation of UIGEA in this case would appear to be identical.

nice

Elements of conspiracy to commit bank fraud and wire fraud

These conspiracies could have been charged separately but, for whatever reason, the government chose to combine them. In other words, the allegation is that the defendants were involved in a conspiracy with two separate “objects”: bank fraud and wire fraud. The government does not need to prove both bank fraud or wire fraud. In effect, the jury has a choice, but they must unanimously agree that the defendants conspired to commit bank fraud or unanimously agree that the defendants conspired to commit wire fraud. If half the jury believes bank fraud but half believe in wire fraud, then the jury would have to acquit.

Bank fraud

The bank fraud statute is 18 USC 1344. The literal language of that statute is as follows:

“Whoever knowingly executes, or attempts to execute, a scheme or artifice--

(1) to defraud a financial institution; or

(2) to obtain any of the moneys, funds, credits, assets, securities, or other property owned by, or under the custody or control of, a financial institution, by means of false or fraudulent pretenses, representations, or promises;

shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.”

To convict of bank fraud, the government must prove that:

(1) the defendants knowingly executed or attempted to execute a scheme or artifice to defraud a financial institution;
(2) the defendants had the intent to defraud a financial institution; and
(3) the bank involved was federally insured.

A “scheme or artifice to defraud” basically requires that the defendants engaged in or attempted to engage in “pattern or course of conduct designed to deceive” the financial institution into releasing property or funds.

Wire fraud

The wire fraud statute is 18 USC 1343, and the literal language is the following:

“Whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, or television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, shall be fined under this title or imprisoned not more than 20 years, or both. If the violation occurs in relation to, or involving any benefit authorized, transported, transmitted, transferred, disbursed, or paid in connection with, a presidentially declared major disaster or emergency (as those terms are defined in section 102 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5122)), or affects a financial institution, such person shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.”

To convict of wire fraud, therefore, the government must prove the following elements:

(1) that there was a scheme or artifice to defraud or to obtain money or property by materially false and fraudulent pretenses, representations or promises;

(2) that the defendants knowingly and willfully participated in the scheme or artifice to defraud, with knowledge of its fraudulent nature and with specific intent to defraud; and

(3) that in execution of that scheme, the defendants used the wires.

I’ll just add that judges do offer juries more guidance than merely reciting the elements of the crimes, as I’m basically doing here. Various terms are defined further. If I included the entire set of jury instructions, though, these posts would be far, far TLTR.

Seems like they are scaling by market share or profits.

Fantastic posts Wynton
Thank you for making this so much clearer in my mind