NEW YORK (CNNMoney) - The Department of Justice announced a $731 million settlement Tuesday with online poker companies PokerStars and Full Tilt Poker to resolve bank fraud and money laundering. United States v. PokerStars, et al., 11 Civ. 2564 (2011) United States v. 1:10-cr-00336 (2011), is a United States federal criminal case against the founders of the three largest online poker companies, PokerStars, Full Tilt Poker and Cereus (Absolute Poker/Ultimatebet), and a handful of their associates, which alleges that the defendants violated the Unlawful Internet Gambling Enforcement Act (UIGEA) and engaged in bank fraud and money laundering to process transfers to.

• Full Tilt Poker Money Laundering Money
• Full Tilt Poker Money Laundering No Deposit
• Full Tilt Poker Money Laundering Games
• Full Tilt Poker Money Laundering Rules

Full Tilt Poker Money Laundering Money

(September 20, 2011) UPDATE: Today, Manhattan U.S. Attorney Preet Bharara’s office asked U.S. District Judge Leonard Sand for permission to add the new allegations to a civil forfeiture case filed against Full Tilt, PokerStars, Absolute Poker and other businesses back in April. Prosecutors contend that Full Tilt Poker paid board members more than $440 million using funds belonging to its online poker players, whom Full Tilt told would be available to them for withdrawal at any time. Mr. Bharara said in statement, “Full Tilt insiders lined their own pockets with funds picked from the pockets of their most loyal customers while blithely lying to both players and public alike about the safety and security of the money deposited with the company.” According to Mr. Bharara’s office’s filing, Full Tilt payment processing system was so degraded that it was crediting website players with money never collected from their accounts. “Full Tilt Poker allowed players to gamble with, and lose to other players, this phantom money that Full Tilt Poker never actually collected or possessed,” according to the court filing.

(April 15, 2011) Today, online gambling sites PokerStars.com, Fulltiltpoker.com, Absolutepoker.com, Ultimatebet.com and ub.com were shut down by the FBI. The founders of these sites were charged with money laundering, bank fraud, and illegal gambling offenses as part of criminal scheme to bribe or trick banks to in order to garner billions of dollars in illegal gambling profits.

The companies laundered money taken in from U.S.-based gamblers disguised as payments to hundreds of dummy online merchants (claiming to sell items like jewelry and golf balls). Then the companies tricked banks into processing the illegal profits as payments for the goods.

The poker companies, once they suspected larger banks were on to their scheme, eventually convinced several small failing banks to process the payments in exchange for multi-million dollar investments in the banks (one such bank allegedly accepted a $10M investment). The principals involved face years in prison and $3 billion in civil money laundering penalties and forfeiture. The most serious charges, conspiracy to commit bank fraud and wire fraud, carries a maximum sentence of 30 years in prison and a $1 million fine.

It is illegal under the 2006 Unlawful Internet Gambling Act for gambling businesses to knowingly accept payments from U.S. players. Although these online poker site companies were located offshore, they nevertheless operated throughout the United States. Generally, under federal and state gaming laws, it is illegal to operate “games of chance” (like a lottery or card games) as opposed to a game of skill.

As internet lawyers, we get quite a number of calls asking what kinds of online games and contest are legal. Online gaming is illegal unless it is a game of skill. A 4-prong test called the dominant factor test is commonly used by the courts to determine whether an online game is a game of skill or a game of chance (games of chance are generally illegal):

• Players must have a distinct possibility of exercising skill and must have sufficient information upon which to calculate an informed judgment. The test is that without skill, it will be absolutely impossible to win the game.
• Players must have the opportunity to exercise the particular skill and the general class of players must possess the particular skill. If the game or contest is targeted for the general public, then the average person must have the particular skill (but not every person need such skill).
• The standards of skill (i) must be known to the players and (ii) must govern the result; and the winners must be objectively (not subjectively) determined.
• Skill, and not chance, must control the final result, and cannot be a part of the larger scheme. If chance enters into any part of the game or contest and if chance proximately influences the final result, then the scheme is a lottery, which is generally illegal.

**This post is for informational purposes only, For legal advice contact an internet lawyer**

BETS OFF: Australia has been urged to crack down on online poker websites. Picture: AFPSource:The Courier-Mail

TWO online poker sites have been fined $700 million for luring gamers into a Ponzi scheme to pay for board members' lavish lifestyles.

Full Tilt Poker Money Laundering No Deposit

US authorities had alleged that Full Tilt Poker stole some $440 million from players around the world through a Ponzi scheme and failed to maintain sufficient funds to pay prizes.

PokerStars and another firm, Absolute Poker, had been accused of bank fraud, money laundering, illegal gambling and other offences.

The US operations of the companies were shut down when the government last year brought criminal charges against various poker company executives and those who helped the companies process money.

Prosecutors said Full Tilt Poker had only $60 million left in its bank accounts to cover the $390 million it owed its players. The company allegedly used $444 million in player money over a four-year period to pay board members.

The $700 million settlement will compensate consumers who claimed they were defrauded in online games, officials say.

Full Tilt has agreed to forfeit virtually all of its assets to the US government. PokerStars agreed to forfeit $540 million to the US and to reimburse $180 million owed by Full Tilt to online players.

Full Tilt Poker Money Laundering Games

The deal announced by the US Justice Department allows PokerStars, a British-registered firm believed to operate the largest online card gaming site, to acquire the forfeited assets of Irish-based Full Tilt Poker.

Full Tilt Poker Money Laundering Rules

While internet gambling has been illegal in the United States since 2006, online poker remains a multibillion-dollar industry with companies using a variety of ways to flout the law, including locating their operations offshore.

According to US officials, the companies arranged for money received from US gamblers to be disguised as payments to non-existent websites purporting to sell merchandise such as jewellery and golf balls.

On July 3, US authorities said they arrested Raymond Bitar, the head of Full Tilt Poker and charged him with a scheme to defraud banks and misleading customers about the security of their funds.

He had been charged last year with gambling, bank fraud and money laundering offences.

Bitar said in an email to employees that was posted on an online betting forum that he had 'returned to the US to deal with civil and criminal cases that are pending against me in New York' and to allow a deal to transfer the assets of the group to PokerStars.

Originally published asOnline poker's $700m fold