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Pokerstars, Full Tilt & Absolute Poker shut down by FBI

16/4/2011
The poker world is in shock this morning after US federal authorities charged 11 people on Friday – including the owners of PokerStars, Full Tilt Poker and Absolute Poker – with bank fraud, illegal gambling offences and money laundering.

Restraining orders against more than 75 bank accounts used by the poker companies have been issued, as well as five domain names associated with the companies (including that of Absolute Poker’s sister company Ultimate Bet). Friday 15 April is already being referred to as “Black Friday” by the online poker community.

The 11 individuals named in the indictment are Isai Scheinberg and Paul Tate (PokerStars), Raymond Bitar and Nelson Burtnick (Full Tilt) and Brent Beckley and Scott Tom (Absolute Poker), as well as five individuals allegedly responsible for the processing of financial transactions: John Campos, Chad Elie, Ira Rubin, Ryan Land and Bradley Franzen.

Two of the 11 defendants were arrested on Friday morning in Utah and Nevada. Federal agents are apparently working closely with Interpol in order to capture the other defendants, most of whom are currently located overseas.

Internet users attempting to access absolutepoker.com or ub.com were met with an FBI warning screen stating that the domain had been seized by the FBI.

In announcing the news, FBI assistant director-in-charge Janice K Fedarcyk used poker terminology to emphasise her message. “These defendants ... tried to stack the deck,” she said, adding that the companies “bet the house that they continue their scheme, and they lost”.

Manhattan US Attorney Preet Bharara said in a statement: "As charged, these defendants concocted an elaborate criminal fraud scheme, alternately tricking some US banks and effectively bribing others to assure the continued flow of billions in illegal gambling profits. Moreover, as we allege, in their zeal to circumvent the gambling laws, the defendants also engaged in massive money laundering and bank fraud. Foreign firms that choose to operate in the United States are not free to flout the laws they don’t like simply because they can’t bear to be parted from their profits."

Full Tilt Poker chief executive Raymond Bitar has put out a press release stating that he is “surprised and disappointed by the government’s decision to bring these charges,” acknowledging that Tilt must in the meantime suspend real money play in the US and also stressing that he is looking forward “to my exoneration”.

The worldwide poker community is now speculating wildly about how events will unfold in the coming days, weeks and months. Many players in the US wrote on poker forums that they had rushed to withdraw their funds from the affected companies’ websites while they could, not knowing what the future may hold. Most were in agreement that the online poker landscape will never be the same again.

The authorities’ actions have meant immediate bad news for proposed partnerships between both PokerStars and Wynn Resorts, and Full Tilt Poker and the parent company of Station Casinos, Fertitta Interactive. A statement released by Wynn Resorts read: “Wynn Resorts Ltd announced today that it terminated its alliance with PokerStars, the online poker company. The decision was reached as a result of the indictment unsealed by the US Attorney for the Southern District of New York.”

Australian newspaper the Courier Mail’s story about a young Australian entrepreneur named Daniel Tvetzkoff suggests that the so-called “boy wonder” set up payment processing schemes used by the poker sites to handle the alleged illegal transactions. Tvetzkoff was arrested last April charged with similar crimes, and there is speculation that he has cooperated with the authorities to avoid his own lengthy jail sentence.



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