This is a guest news post by John Carr of RouletteOnline.net, the leading casino portal for fans of online roulette.
A federal judge dealt a losing hand to John Campos and Chad Elie, alleged payment processors charged in last year’s Black Friday indictments of online poker sites, by refusing to dismiss the allegations against them.
Judge Lewis Kaplan, in an eight-page memorandum opinion and order entered into the court record on Feb. 7, chose to allow the charges to remain intact and trial to commence next month as scheduled. Campos, in his role as former vice-chairman of SunFirst Bank in Utah, is charged with allegedly accepting cash payments for facilitating internet poker transactions between poker players and the top three online poker sites of PokerStars, Full Tilt Poker and Absolute Poker. Elie, also an alleged payment processor, is accused by the the U.S. Department of Justice (DoJ) of using deceptive practices to process funds between the indicted poker rooms and players based in the U.S. Both defendants face four counts in violation of the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006 and two counts of violating the Illegal Gambling Business Act (IGBA), as well as one count of conspiring to engage in money laundering. Elie faces a separate IGBA count and another allegation of conspiring to commit bank and wire fraud.
In attempting to have all charges against their clents dismissed, attorneys for Campos and Elie argued that the recent opinion of the DoJ released in December that interpreted the 1961 Wire Act as being applicable only to sports wagering made the UIGEA and the IGBA charges against their clients inapplicable to poker. They also proposed an argument that poker is not gambling.
Judge Kaplan stated in his opinion that it was inappropriate to “analyze or draw any conclusions about” the UIGEA and IGBA and their relation to the Wire Act interpretation at this time. He further ruled that the “Defendants’ argument that poker is not gambling fails, at least at this stage.” The judge’s decision was not surprising since he had already said at a December hearing that an entire dismissal of all charges would be “extraordinarily unlikely.”
Along with the three most popular poker sites and Campos and Elie, nine other individuals face charges in the Black Friday allegations. Three of the named individual defendants have already pled guilty in deals made with prosecutors. Ira Rubin admitted guilt in the processing of payments for the online poker rooms and will likely face a term of 18 to 24 months in prison at his sentencing scheduled for May 17.
Co-defendant Brent Beckley, an Absolute Poker co-founder, admitted in a courtroom in December that “it was illegal to accept credit cards so that customers could gamble on the internet.” Beckley is also looking at about 18 months in the penitentiary at an April 19 sentencing hearing. Bradley Franzen was the first of the indiviidual defendants to cop a plea deal with DoJ lawyers last May. In his desire for reduced jail time, Franzen’s agreement calls for full cooperation with prosecutors and possible testimony against his co-defendants. A sentencing date has not yet been set for Franzen and may be delayed until allegations against all of the named defendants has been completed.
Of the three indicted poker sites, only PokerStars has paid players who had outstanding account balances at the site prior to Black Friday. PokerStars has maintained its ranking as the world’s largest poker site in regards to player traffic, even without players from the huge U.S. market. Full Tilt and Absolute Poker have not fared nearly as well since the April 15 indictments that completely changed the landscape of the online poker industry. Full Tilt has been shut down since June and is currently in negotiations to be acquired for $80 million by Group Bernard Tapie in a deal that will reportedly include the reimbursement of players. Ultimate Bet and Absolute Poker, who together make up the CEREUS Network, have lost an estimated 99% of player traffic since Black Friday and appear to be nearing a complete demise. Blanca Games, the sites owner, is said to be leaning toward asset liquidation in order to repay its players. Industry rumors regarding the reimbursement have hinted toward players receiving only a fraction of the funds still frozen in their accounts. However, the rumors haven’t been substantiated.