Black Monday?

DoJ in Maryland unseals indictment charging online gambling companies of US law violations

by , May 23, 2011 | 3:55 pm

The DoJ District of Maryland unsealed an indictment today charging multiple online poker and gambling sites of charges similar in nature to the Black Friday indictments last month. While the indictment itself has not been released publicly at this time, the DoJ has a press release describing the action. In all, two businesses and three people are charged, with 11 bank accounts seized around the world.

The following sites are in connection with this indictment:

  • Bookmaker.com
  • 2Betsdi.com
  • Funtimebingo.com
  • Goldenarchcasino.com
  • Truepoker.com
  • Betmaker.com
  • Betgrandesports.com
  • Doylesroom.com
  • Betehorse.com
  • Beted.com.

The biggest site poker players will see there is Doylesroom.com, of which their namesake Doyle Brunson left the site just a couple weeks ago. Whether it was excellent timing or Doyle was aware of what was about to happen we can’t be sure, but him leaving the site may, in hindsight, might have been a tip-off to the rest of us that something was off.

One big difference between this set of seizures and the Black Friday group is that the FBI actually opened a fake payment processor to get the business of the offending sites, only to flip when the time was right. An affidavit filed to support a seizure warrant during the investigation noted several laws as justification for the seizure. It should be noted that these are not necessarily the laws that the companies are being accused of, merely the laws used for justification for the seizure:

  • 18 U.S.C 1955: The “illegal gambling business” statute that has already been used against the Big Three.
  • Maryland Criminal Code Section 12-102: A betting statute that says, in essence, that a resident of the state may neither participate in a bet or wager nor hold money for any particular bet or wager. This is likely the state law that federal officials are using to tie the illegal gambling charges to.
  • 31 U.S.C. 5363: Known as the UIGEA to the rest of us, this seemed like a given since money changed hands and the feds actually used a payment processor to gather evidence.
  • 18 U.S.C. 1084: This is colloquially referred to as the Wire Act. The reason its being applied here and not in the other cases is because some of the sites involved processing sports bets.
  • 18 U.S.C. 1956(a)(2)(a): This is a specific part of title 18 pointing to money laundering in connection with the illegal gambling activities. It appears that a specific law needs to be violated for money laundering to be attached, and the affidavit suggests a link to racketeering activity, and then to illegal gambling.

One notable absent law violation are the bank fraud charges that appeared in the SDNY case. It might be that the sites did things differently in this case, but its too early to tell without the indictment text. Finally, the press release noted a cooperation between the DOJ, IRS, and ICE. @Karak2p2, a regular on the Quadjacks Radio program, noted on twitter that the cooperation made sense, as the DOJ is after the federal law breaking, the IRS for money laundering, and ICE for the potential organized crime angle of running an illegal gambling business.

The indictment, when it is revealed, will contain more information as to the specific charges.

For more links and information about this fast-moving story, check out Scarlet’s post on the same subject.

EDIT (7:20 PM ET): The indictments have been posted online, the two companies have been charged seperately, or at least have separate indictments. Both have the same two counts, one for conducting an illegal gambling business (18 USC 1955) and one for money laundering (18 USC 1956).

ThrillX Systems (beted.com) Indictment

K23 Group Financial Services (BMX Entertainment) Indictment


Comments are closed.