Click above to see the full letter, and click below for my Google translation from corporate bank-speak to poker English:

Dear Donkeybomber,

We really enjoy having you as a customer, because boy, you sure have been making a lot of deposits lately! My assistant Janna’s boyfriend plays a lot of online poker, and he tried to explain something to me about AQ losing to AJ? Anyhow, damnit-all, that government is telling us we can’t keep letting you fund your PokerStars sit-n-gos.

Hope you understand. The Feds are on us like hawks these days — and now they’re telling us about this crazy new UIGEA thing — so we can’t be too careful. Bummer! But whatcha gonna do, right? If new payment processors pop up, we’ll have to shut down those transactions, too, and any attempt to circumvent this crackdown Uncle Sam might see as “money laundering” Yikes!

I guess all you online poker pros will either have to find new lines of work or move to another country? Hey, did you watch that show 2 Months 2 Million? Do you know those guys? I saw one episode and really liked that Emil. He’s so funny!

Annyhooo, if you still feel the need to gamble online, we’ll happily let you transfer money playing the games at Forex.com! Thanks again for being a happy, satisfied, Wells Fargo customer!

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).

All fine and dandy (not), but what I found particularly interesting were the very last grafs:

The casinos and poker houses are based overseas, beyond the reach of prosecutors, who have sought to attack the businesses indirectly by going after American businesses that process transactions for offshore casinos or that advertise on their behalf.

Poker sites involved in this latest crackdown make money by taking a small part of each poker pot.

A. Jeff Ifrah, a lawyer representing Account Services, which has offices in San Diego and Canada, said that his client charged a small fee to issue checks to poker players.

Mr. Ifrah said that, to his knowledge, the government “has never seized an account that belongs to players who are engaged in what I would contend is a lawful act of playing peer-to-peer poker online.”

First, yikes if they go after companies that advertise online sites — but I guess that’s the whole dot-net thing. But beyond that, the non-poker world — just in time for Congress — is starting to understand how a rake works … and the relatively new phrase of “peer-to-peer poker online” is a step towards making the difficult distinguishment that online poker is indeed different than online gambling.

Documents obtained by the AP show that a judge in the district issued a seizure warrant last week for an account at a Wells Fargo bank in San Francisco, and that a federal prosecutor told a bank in Arizona to freeze an account.

In a letter dated Friday and faxed to Alliance Bank of Arizona, the prosecutor said that accounts held by payment processor Allied Systems Inc. are subject to seizure and forfeiture “because they constitute property involved in money laundering transactions and illegal gambling offenses.” The letter was signed by Arlo Devlin-Brown, the assistant U.S. attorney for the Southern District of New York.

In another letter faxed the same day, Devlin-Brown asks that the bank treat the funds “as legally seized” by the FBI, saying that the government has probable cause that the gambling payments of U.S. residents had been directed to offshore illegal Internet gambling businesses.

Meanwhile, the British press is reporting:

America might be about to loosen its gambling corsets

These two stories aren’t as mutually exclusive as they might seem. Often, when times are changing, old holdovers from a previous philosophical era will turn uber-aggressive with their means and methods trying to give their way one last shot, and at a minimum hoping to take a few folks down with them as their kind are pushed out.

That’s certainly plausible considering how emphatic bureaucrats in the DOJ have been about the illegality of online poker/gambling even when the people and courts have repeatedly disagreed.

Pokerstars has confirmed with its players that indeed, some payout funds have been frozen in American banks — but they’ve credited back affected monies with a 10 percent inconvenience bonus and an invitation to try again, Gambling911 reports.

If you wish to resubmit your cashout request, you can do so from our Cashier by selecting the check option (your new check will be issued on a different account and can be deposited as normal) or wire transfer (only available for amounts greater than [$2,500]).

But while Stars’ “take care of the player first” approach may be admirable, wiring money through a new financier may just be a temporary solution to eCheck problems affecting thousands of players — a little game of financial cat and mouse (+ good-will PR) while a bigger, costlier legal battle takes shape.

Under advisement from the DOJ agent, a federal prosecutor in New York’s Southern District apparently got a magistrate to sign off on seizure orders last week for multiple American bank accounts connected to PokerStars payouts. The court also issued subpoenas (warrants?) for two individuals to appear before a grand jury on June 18.

I haven’t seen the legal documents yet, but supposedly they allege the seized monies are likely to be proceeds from unlawful gambling — not according to the 2006 UIGEA, mind you, but rather … you guessed it … the 1961 Wire Act.

It’s still not clear to me who exactly’s on trial yet, but the Fed’s actions at this point seem to most immediately be targeting the banks and or the Neteller alternative payment processors. Supposedly $19 million earmarked as payouts (and perhaps WSOP buy-ins) from at least one major online poker site was frozen at banks in Los Angeles and Scottsdale, Arizona. This either followed or coincided with the freezing of $14 million that Wells Fargo was holding for player cashouts.

At least one of the subjects subpoenaed by (to?) the grand jury is an officer with Allied Systems, an online credit card processing company.

We’ll let you know more as we find it out — particularly as it might affect the WSOP. In the meantime, legal teams from around the online poker industry are considering challenging the legality of the fund seizures, and supposedly the PPA plans to enter the courtroom fray on behalf of its potentially affected members if a case moves forward.