As many of you have now read, the payment processor involved in the recent Department of Justice Seizure of money designated as withdrawals to poker players was just indicted by the DOJ+.
Everyone, this indictment is a significant step by the DOJ, and seems to indicate that resolution through litigation rather than negotiation is likely. The PPA's legal team has analyzed the contents of this indictment, and while we are still at work, there are some preliminary points to be made:
1. This indictment represents a major change in strategy for the
government . They have moved away from allegations that online poker is
illegal and more towards traditional fraud theories. The thrust of the
indictment is that the defendant committed Bank Fraud by failing to
provide information to the Banks about the nature of the processing
that Account Services was doing. It does not ever allege that the
processor violated UIGEA or the Wire Act in processing online poker
transactions. Moreover, it is unclear how the bank fraud statute even
applies since there is no allegation that the bank suffered any loss at
all.
2. The only charge in the complaint related directly to illegal
gambling alleges that the defendant violated federal gambling law
because he conspired with others to facilitate online poker and casino
games in violation of New York law. But New York law is not violated
by games of skill. We believe the indictment includes reference to
"casino games," because the prosecutor knows that he cannot prove that
online poker, by itself, violates New York law.
3. The grounds specified in the indictment are not the same grounds
upon which the prosecutor relied in seizing the assets in the first
place. The seizure warrants did not rely on a charge of Bank Fraud as a basis
for the seizure. Accordingly, it is unclear whether these new charges
can support the continued seizure of the accounts that contained
player's money. We will press that point to the best of our ability in
the pending California action.
4. Nowhere in the indictment does the government allege that the
defendant has a personal interest in the seized funds. As we have
argued before, the money seized was player money. This
indictment does not explain how the government can seek to forfeit
these funds, especially since it is clear these funds did not "belong" to the defendant.
5. The PPA is fully committed to continuing its efforts, through litigation in California
and otherwise, to obtain the return of the seized funds on behalf of
the players.
And remember, although both cases are important, the criminal case against Mr. Rennick operates under very different rules than the forfeiture case against the funds. Although the two cases are related, they are far from the same.
Patrick "Skallagrim" Fleming
PPA Litigation Support Director
A full copy of the indictment will be up on this site shortly.
Until then you can get a copy here: http://www.gambling911.com/images/pd...Indictment.pdf