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PPA says it will fight for money seized from payment processors10 June 2009
A federal prosecutor from the Southern District of New York (SDNY) has ordered the seizure of about $33 million from two payment processors, according to the Poker Players Alliance (PPA).
"We learned about [the seizings] last Thursday," said John Pappas, the executive director for the PPA. "We spent the weekend and the end of last week trying to figure out the entire situation, how many players were affected, building a legal case and making determinations on how we wanted to proceed.
According to the timeline posted on the PPA's Web site, a federal agent and prosecutor sent a seizure order to Wells Fargo freezing at least $14 million intended to be used to pay players. About two days later, the same agent and prosecutor contacted at least two banks in Los Angeles and Scottsdale, Ariz., and directed them to freeze accounts containing about $19 million of deposits and payouts.
"It is important to underscore that in at least two cases, the prosecutor acted and the banks responded without a warrant being issued," the PPA said in its timeline.
The U.S. Attorney's office declined to comment directly on the case.
"It is our office policy to neither confirm nor deny the existence of investigations," said SDNY spokesman Rebekah Carmichael in an interview with Casino City.
The poker rooms have refunded player accounts, and moved to assure their American players that their funds are still available to them.
"The issue involving the freezing of some funds affected only one of the many check processors that Full Tilt Poker uses to support player withdrawals," said Full Tilt in a statement. "We do not expect any further interruption in check withdrawals or any other withdrawal methods, and any player who wishes to make a withdrawal should expect normal processing times. All players who were affected by the current situation have had their funds returned to their Full Tilt Poker accounts and all new withdrawal requests are processing normally."
PokerStars has returned the seized money to player accounts with a 10% bonus, according to reports in the TwoPlusTwo forums.
Whether this case ends up going to court depends on the SDNY, Pappas told Casino City.
"We are in direct discussion with SDNY and others at the DOJ and see if this enforcement is something they want follow through with," Pappas said.
"We're need to determine if it's a shot across the bow or a strong organized effort (to purse online gambling interests)," Pappas added.
The federal prosecutor working on the case is citing the 1961 Wire Act and the 2002 Illegal Gambling Act as the basis for its actions, according to the PPA. But Pappas is comfortable that the PPA has a strong case to make in court if gets that far.
"We think we have some strong legal arguments on our side and will go to court if necessary," Pappas said. "Re: MasterCard found the Wire Act did not apply to Internet poker, only sports betting."
If the SDNY prosecutor moves forward with the case, the PPA will try to stop it, Pappas added.
"We'll file an injunction on behalf of the players because it's their money being affected," Pappas said.
"The money they're going after is not the site's money, and can't be construed as the proceeds of unlawful Internet gambling," Pappas said.
"Because we'd file the injunction on behalf of the players, we're comfortable with (our) standing in the court," Pappas added.
PPA says it will fight for money seized from payment processors is republished from Online.CasinoCity.com.
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