@JDNewitt may or may not be prohibited by law from live-tweeting a court-ordered visit with federal prosecutors in New York. #pokerWTF?

Wicked Chops is reporting that Jason Newitt has been subpoenaed by a US federal court in the Southern District of New York. Though not confirmed, they are comfortably saying that JDN has an order to appear (presumably before a grand jury?) on Tuesday, September 14.

Newitt, a well-known figure in Las Vegas poker circles, is probably most famous for being crippled by yours truly in the Pokerati half-and-half tourney at Detox — Dude, I admit it was a bad call for all my chips with only a 10-high flush draw! So I got there, deal with it! That hand would propel me to near-victory while setting him up for an early departure. But probably more relevant to the Feds is info from JDN as:

• a loyal Full Tilter who hooked up players with patches
• sender of the infamous Gobboboy email, a forwarding oopsie that may or may not have revealed Howard Lederer to be kinda a big jerk to fat kids, but also someone calling the shots at Full Tilt
• someone who claims to have received distributions for his supposed ownership in Full Tilt
• someone who sued FTP after getting fired and said distributions suddenly stopped, laying out ownership and operational structures at Full Tilt.

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Online gambling+poker payment processor Douglas Rennick had to sign over his property on Tuesday, in accordance with his recent guilty plea in US Federal Court. That, of course, has the Southern District of New York now batting 1.000 when it comes to getting convictions or guilty pleas in online gambling cases.

The amount Rennick admitted was involved in the illegal “gambling conspiracy” he was part of totaled $583 million. But as part of his plea agreement — reducing his threatened sentence from 30 years to 6-to-12 months — the amount he actually signed over (thereby contributing to national debt reduction, obv) was about $17 million. I think that was just about everything he had on him. The Feds are still seeking that extra half-billion, and expect Rennick to help them find it before he gets officially sentenced in September.

Check it out … here’s the actual forfeiture order
.
The crime the Canadian payment processor pled to (one count) was a Wire Act violation. Generally we poker people have thought of the Wire Act as being more about sports betting. But in Rennick’s case, court documents made it clear — specifically in an sworn affidavit from an FBI agent — that this money came from Full Tilt and/or PokerStars.

By law, the Feds have 30 days to post the details of his seized accounts at www.forfeiture.gov. Then, you’ll have 60 days to file a claim if you think any of that money might belong to you. Any takers?

Big ups to @GamingCounsel for helping me understand the difference between “forfeiture allegation” and “subject property” in 140 characters or less. [thx!]

In a story that was originally reported in August, Canadian payment processor Douglas Rennick pleaded guilty in New York City to a charge of processing offshore bets to US residents and forced to forfeit $17,100,000.

Sentencing for Rennick is scheduled for sentencing on September 15th, with a prison term of six to twelve months expected.

Yep, it’s official … the Feds weren’t gonna let Daniel Tzvetkoff get away/offed before his historic UIGEA case made it to trial. Yesterday, as we were half-reporting on this likely development, US District Judge Lewis Kaplan — in New York’s Southern District, of course — was issuing the order over-riding the conditional bail granted by Las Vegas federal magistrate Peggy Leen … (who apparently didn’t get the memo about how serious the Feds were taking this case!)

Click here to read the court order assuring Tzvetkoff will remain behind bars throughout the pre-trial process.

The reason Judge Kaplan cited for denying bail was “a serious risk the defendant will not appear” as he faces “clear and convincing evidence” against him.

Heads-up credit to @GamingCounsel.

Despite reports to the suggestive contrary, indicted online poker payment processor Daniel Tzvetkoff has not been released on bail. The 27-year-old Australian, who briefly lived the “baller” life of a gray-market money-transfering kingpin, is still in custody in the North Las Vegas Detention Center, awaiting a decision from a federal judge in New York on his temporary fate, according to a Deputy US Marshal in Las Vegas.

As the first ever accused UIGEA criminal, Tzvetkoff faces up to 75 years in prison on multiple fraud and money laundering charges related to his dealings with American online poker players, American banks, and American-friendly online poker sites, including Full Tilt, PokerStars, Absolute, and Ultimate Bet.

Though I don’t fully understand all the jurisdictional details, supposedly the district court in New York trumps any ruling from the federal magistrate in North Las Vegas, who granted bail on the surety of his father’s $1.2 million house in Brisbane and the condition that the elder Tzvetkoff would drive his son to New York where he will be tried.

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Apparently, some in the non-poker media recognize the historic nature of the first-ever UIGEA charges — and they’re not happy about it. Check out Reason Magazine’s jumping to the defense of Daniel Tzvetkoff, or at least being extremely of Department of Justice pursuits:

Getting Away With Poker
How is helping people play a card game like murder?

I find this article particularly interesting because of how it pairs politically with the recent story in The Hill about legalized online gambling creating jobs, according to a new study. Though jobs are appealing on both sides of the aisle, it’s clearly an issue the Dems are looking to own in coming months.

Meanwhile, Reason, a Libertarian magazine, speaks more to the Tea Party set. So regardless of what happens to Tzvetkoff, you gotta like the plausibly bipartisan sales pitch taking shape in the Beltway for whatever online poker bills may or may not come to fruition later this year.

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A Las Vegas federal judge granted Australian Daniel Tzvetkoff bail as he awaits trial on four charges related to more than half a billion dollars worth of bank fraud, money laundering, and UIGEA violations. The 28-year-old payment processor faces up to 75 years in prison for his actions — essentially transferring funds between US online poker players and sites the Department of Justice considers to be “illegal internet gambling companies”.

Prosecutors protested his release, claiming he was a flight risk as a foreign national who is believed to have a $100 million hidden stash at his disposal.

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photo: The Courier-Mail

Daniel Tzvetkoff, first accused UIGEA criminal: Whoever said being a douchebag was a crime?

Dude … it’s gettin’ hot here in the US … specifically in Las Vegas.

Yesterday federal authorities arrested Daniel Tzvetkoff, a 27-year-old Australian national “on charges that he assisted illegal internet gambling companies by processing approximately $500 million in transactions between U.S. gamblers and internet gambling websites and disguising the transactions to the banks so that they would appear unrelated to gambling,” according to a statement from the DOJ’s Southern District of New York.

Illegal internet gambling companies? Yikes …

Tzvetkoff, as founder of Intabill and ACH System, faces up to 75 years in prison for bank fraud, money laundering, conspiracy to operate and finance an illegal gambling business, and … get this … for processing fund transfers in violation of the UIGEA.

I’m pretty sure that’s the first ever indictment to bring up UIGEA charges.

About a year ago the Australia Courier-Mail reported that Tzvetkoff owed Full Tilt, PokerStars, Ultimate Bet, and Absolute Poker more than $30 million as the overextended, ostentatious Gen-Y tycoon’s personal empire was crumbling. Then, Full Tilt (through Kolyma Corporation) sued Tzvetkoff in Australian Court, saying his company Intabill owed them $52 million.

Before his arrest, he was saying Full Tilt tricked him into a bad deal and his lawyer doublecrossed him. He blamed the economy for a multi-multi-millionaire having to declare bankruptcy earlier this year. More on the pre-arrest rise and fall of an online poker payment processor here.

I mean for chrissakes, he drove a Lamborghini with the license plate “BALLER”! And when a bank repossessed a competitive race car of his, they got everything except its $100k engine, which had been stripped out and hidden.

Click below for the official word from the DOJ:

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The Financial Times in London is reporting that a federal grand jury in Manhattan has been investigating Full Tilt Poker and is ready to indict the online poker site along with several players who represent the site, including Chris “Jesus” Ferguson and Howard Lederer for possible money laundering and gambling violations. The article notes that FBI agents and/or prosecutors have spoken with at least two people involved in disputes with Full Tilt Poker.

Attorneys on both sides aren’t saying anything right now, but expect more news to come out when an announcement of possible indictments in the near future.

More of the court documents that were heavily redacted now have a bit less of a black line through them, to show Full Tilt Poker and PokerStars mentioned in the case of Douglas Rennick and the freezing of nearly $40m in funds from payment processors.

iMEGA has a copy of the documents up on their site.

A US District Judge has granted Costigan Media — the folks behind Gambling911 — their request to unseal seizure warrants and (heavily redacted) court documents related to the seizure of some $34 million that US attorneys allege are ill-gotten gains from illegal online gambling.

This is a semi-significant ruling because while the First Amendment has stood up for such requests in most criminal prosecutions, there is less case law directly addressing matters of civil forfeiture, according to Judge Laura Taylor Swain … but ultimately, yes, when thousands of American citizens are having funds they believe to be theirs seized by the government, yes, the public has a right to know what’s going on.

Click here for 49 pages of freshly released legal documents, not all of which look like this:

The losing side, btw, in this mini case-within-a-case are ultimately the same Manhattan federal prosecutors who followed up these payment processee seizures with an indictment against Douglas Rennick — the Canadian payment processor who faces more than 50 years in prison (cumulative), $1.75 million in fines, and the forfeiture of nearly $566 million on charges of fraud, money laundering, and illegal gambling operations for his doing business with websites such as Full Tilt, PokerStars, Ultimate Bet, and others.

That indictment, of course, may or may not have come coincidentally on the same day Sen. Robert Menendez (D-NJ) introduced a Senate bill that would effectively make all the issues being adjudicated above moot in the future.

Regardless of what’s in play there, I think it’s clear why, indeed online poker related money issues really can’t be handled in the shadows — as much as some federal prosecutors would like such transactions to stay that way.

From the Department of Justice:

Internet Gambling Payment Processor Charged With Bank Fraud, Money Laundering and Illegal Gambling Offenses

NEW YORK, Aug. 6 /PRNewswire-USNewswire/ — Lev L. Dassin, the Acting U.S. Attorney for the Southern District of New York, and Joseph M. Demarest, Jr., the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (FBI), announced today the filing of an indictment charging Douglas Rennick with bank fraud and other offenses stemming from his role in processing more than $350 million for Internet gambling companies. According to the indictment filed yesterday in Manhattan federal court:

Since at least 2007 through June 2009, Rennick opened a number of bank accounts in the United States under various corporate names, such as KJB Financial Corporation, Account Services Corporation and Check Payment Financial Co. In opening the accounts, he and his co-conspirators falsely represented that the accounts would be used for such purposes as issuing rebate checks, refund checks, sponsorship checks, affiliate checks and minor payroll processing. In fact, Rennick and his co-conspirators used the
accounts to receive funds from offshore Internet gambling companies that offered, variously, poker, blackjack, slots and other casino games. Rennick and his co-conspirators then disbursed those funds via checks to U.S. residents seeking to cash out their gambling winnings. Rennick and his co-conspirators provided false and misleading information to U.S. banks about the purpose of the accounts because the banks would not have processed the transactions had they known they were gambling-related. In
total, Rennick and his co-conspirators processed more than $350 million transferred from a Cyprus bank account to various U.S. bank accounts for this purpose.

Rennick is charged with one count each of conspiracy to commit bank fraud, conspiracy to engage in money laundering and conspiracy to operate an illegal gambling business. If found guilty, Rennick faces a maximum term of 30 years in prison and a $1 million fine on the bank fraud charge, 20 years in prison and a $500,000 fine on the money laundering charge, and five years in prison and a $250,000 fine on the gambling charge. The indictment also seeks the forfeiture of at least approximately
$565,908,288, which represents the amount of proceeds obtained as a result of the illegal gambling and bank fraud conspiracies. The case has been assigned to U.S. District Judge Sidney H. Stein.

Rennick, 34, currently resides in Canada. Mr. Dassin praised the investigative work of the FBI and thanked the
Department of Homeland Security’s U.S. Immigration and Customs Enforcement and the Internal Revenue Service for their assistance in the investigation. Mr. Dassin added that the investigation is continuing.

Assistant U.S. Attorneys Arlo Devlin-Brown and Jonathan New are in charge of the prosecution, and Assistant U.S. Attorney Jeffrey Alberts is in charge of the forfeiture in this case.

The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

So says this class-action lawyer on the right in an interview on CNBC on Wednesday. The Jeffrey Pollack lookalike on the left doesn’t seem to buy it.

First Gambling 911 and Pokerati … then the Associated Press, and now MSNBC, the Wall Street Journal, and the New York Times are following aware of the $33 million of online poker winnings that has been frozen at the behest of an Assistant US Attorney in New York’s Southern District, the court that has historically created the most headaches for all things online poker.

ALT HED: Neteller 2?

The banks are deflecting blame and criticism, saying they’re simply complying with a federal court’s direction. Not surprising, of course, considering they aren’t really in a position to defy their new dot-gov overseers. The non-poker media probably doesn’t even give a shit about poker players — they just care right now about the relationship between government and banks … but hey, good to know … because just like government officials found a villain in the form of online gamblers to justify fingering its way into the bigger world of cross-border internet commerce, now online poker has a potential villain in bad, old-school governmenting (relying on nearly 50-year-old laws) to justify its immediate need to revise the laws that affect our multimillion-UScitizen industry.

To understand the brass tacks of what just happened and is happening, be sure to read the NYT story here:

Web’s Poker Winners Face Delay in Collecting
(Thanks, Lana, for the link!)

In it we learn:

• Four American banks were hit with court papers — Wells Fargo, Citibank, Alliance Bank of Arizona, and one other — telling them to freeze the funds.
• In part because of the secretive nature of grand juries, it’s not yet clear whether all are court orders or just friendly requests. (Ha.) Wells Fargo’s was an order.
• Four online sites affected — Full Tilt, PokerStars, and two others.
• Southern District prosecutors told at least one bank the funds in question “constitute property involved in money laundering transactions and illegal gambling offenses.”
• The accounts frozen belong to Allied Systems and Account Services, two payment processors (at least one of which seems to be based in Canada).

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Ah, once upon a time ret. Sen. Al D’Amato (R-NY) held real power … regardless, he’s still trying to wield his influence over federal actions in his home state, and the PPA statement around his statement says something about the seriousness of the payment processor account-freezing situation while confusing this quasi-legally savvy journo/not-a-lawyer on the difference between warrants and subpoenas:

PPA Statement on Southern District of NY Action Against Online Poker Players
Letter Sent to Assistant US Attorney Requesting Presence at Future Hearings

WASHINGTON, DC (June 9, 2009) – The Poker Players Alliance (PPA), the leading poker grassroots advocacy group with more than one million members nationwide, today released the following statement by PPA Chairman Alfonse D’Amato on questionable actions taken by a federal prosecutor in the Southern District of New York to freeze payment processor accounts containing more than $30 million in poker players’ deposits and payouts.

The PPA also sent a letter to the Assistant United States Attorney for the Southern District of New York asking for an opportunity to be heard in any future warrant hearings. The letter is available at www.pokerplayersalliance.org.

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