Another UIGEA Arrest, This One on Barney Frank’s Home Turf

by , May 16, 2010 | 9:10 am

Sorry for missing this, but I guess I hit the Google snooze alarm. Ten days ago, federal authorities arrested Todd Lyons, 36, of Beverly, Massachusetts, for allegedly running an offshore sports betting operation called Sports Offshore. They pretty much threw the book at him, levying 36 criminal charges — fraud, money laundering, racketeering, tax crimes, you name it … and one of them for violating the UiGEA.

Nothing to do with poker specifically at first glance … but if you believe the Feds don’t operate in a vacuum, there seems to be a message here that might-should have a few Poker After Dark regulars shitting bricks taking note …

I learned about the arrest from J. Todd, whom I find myself paying closer attention to than before as the June 1 D-Day approaches. However, point of order, dude, I think you got it wrong saying Lyons was the first ever UIGEA arrest. I’m 99.99 percent sure he was the second. You gotta read your Pokerati, man, where you’ll see that the first was Daniel Tzvetkoff. It’s right there, charge #4, in the criminal complaint from the DOJ! Reason magazine saw the same thing, too.

With that out of the way (we understand typos here), let’s look a little closer at this case and how it may or may not be different from payment processor arrests related to online poker …

First off, this indictment does not come out of the Southern District of New York, which we know is where the biggest poker heat has been coming from. However, is it just a coincidence that the first UIGEA arrest happened in Las Vegas (capital of the poker world) and the second was in Massachusetts (home to the biggest Congressional opponent of the UIGEA). The message someone could read here is “Barney Frank can’t save you!”

Also, the three arrested payment processors with direct connections to American-facing online poker sites — Rennick, Schuett, and Tzvetkoff — all were foreign nationals. Though I haven’t yet seen the legal docs on Lyons, it seems he’s an American. OK, so part two of the message: we’re not just going after foreigners, we’ll arrest Americans, too!

And in case anyone’s not getting it, Carmen Ortiz, the US Attorney for the District of Massachusetts, gave a statement to telegraph the DOJ’s intent clarify:

“The conduct alleged in this case reveals a blatant effort to circumvent gaming and tax laws. The notion that the type of activity alleged here is legal because it is conducted over the Internet from offshore is pure fiction.’’

Yikes, so you’re saying the DOJ is going after people in America who operate businesses they believe to be illegal, even if the central computer action takes place in another country? But that would be bad for some people we know … Are you sure about that? Have you talked to Barack Obama?

Actually, it turns out she has. While most of the prosecutors in the Southern District of New York are Bush-era holdovers, Ortiz was a relatively recent Obama appointee, sworn in in January 2010 by current Attorney General Eric Holder.

Wow. Let me soak this in here … Are you trying to say the whole US government — even the current administration — could be in on this, not just a few robes in Manhattan pretending to be Mob-busters?

It’s possible. And though not unrealistic that US Attorneys in New York might compare notes with US Attorneys in Boston, especially when they work under the same boss, it could all be coincidence.

Ortiz comes originally from New York, after all … and years ago, she worked closely with the NFL.


  • You’re next, Dan. I hope you shut down “Pokerati Sportsbook”!

  • DanN would be a typo. Or a promotion. Not really sure. 😉

  • DanM

    pauly, not sure why my spam filter always thinks you are spam, even after i tell it you’re not. as to the sportsbook, dude, pay up.