http://www.ft.com/cms/s/0/e159faf4-4...44feabdc0.html
By Joseph Menn in San Francisco
Published: April 5 2010 03:00 | Last updated: April 5 2010 03:00
A federal grand jury in Manhattan is investigating one of the largest internet poker sites serving US gamblers and could bring indictments against some of the world's best known professional players, according to people familiar with the case and a subpoena issued to a witness this week.
The probe is aimed at Full Tilt Poker and individuals including Chris Ferguson and Howard Lederer, champion gamblers who are among those accused of controlling the company in a Los Angeles civil lawsuit filed last year. Online gambling is illegal in the US and according to the subpoena the investigation is examining whether gambling and money-laundering laws have been broken.
FBI agents or prosecutors have spoken to at least two people involved in disputes with Full Tilt, paying special attention to the possibility of money-laundering violations, those familiar with the inquiry say. Money-laundering charges might be attractive to the government as they would compel co-operation from authorities even in countries where gambling is legal.
Full Tilt's web pages say it is registered in Alderney, in the UK's Channel Islands, and regulated there.
The Manhattan US attorney declined to comment, as did justice department officials in Washington. Eric Jackson, a Los Angeles civil attorney representing Mr Lederer, Mr Ferguson and a software company with ties to Full Tilt, said his clients had not been informed of the grand jury inquiry.
"We are not going to comment about a speculative grand jury investigation that we are not aware of," Mr Jackson said.
Both Mr Lederer and Mr Ferguson filed a motion to dismiss the civil case but have not addressed the substance of the allegations at this stage.
Criminal charges, especially against the celebrity Americans known for televised tournament play, would mark an escalation in the US government's stuttering moves against internet gambling.
But it would fit the federal law enforcement strategy by trying to make an example out of prominent targets, according to Nelson Rose, an author of books on gambling law and adviser to some companies in the industry. "They are waging this war of intimidation," Mr Rose said. "There are not a lot of good statutes, so they go after high-profile targets and try to intimidate everybody."
The justice department maintains online poker violates the decades-old Wire Act, and it gained strength with the 2006 Unlawful Internet Gambling Enforcement Act. But not all judges agree on the former, and Mr Rose said he did not know of any criminal charges brought under the 2006 law, which has been criticised for poor wording.
While various bills are circulating in Congress that would at least permit the states to authorise and regulate online poker, federal agents have continued to take shots at leading figures under money-laundering and other laws.
Even though London-traded PartyGaming pulled out of the US market after the 2006 bill was passed, it paid $105m (€77m, £70m) last April to avoid prosecution. Last year a Canadian payment processor traded on Nasdaq forfeited $19m for handling gambling transactions before the 2006 law.
****
WOW scary stuff
hno:
By Joseph Menn in San Francisco
Published: April 5 2010 03:00 | Last updated: April 5 2010 03:00
A federal grand jury in Manhattan is investigating one of the largest internet poker sites serving US gamblers and could bring indictments against some of the world's best known professional players, according to people familiar with the case and a subpoena issued to a witness this week.
The probe is aimed at Full Tilt Poker and individuals including Chris Ferguson and Howard Lederer, champion gamblers who are among those accused of controlling the company in a Los Angeles civil lawsuit filed last year. Online gambling is illegal in the US and according to the subpoena the investigation is examining whether gambling and money-laundering laws have been broken.
FBI agents or prosecutors have spoken to at least two people involved in disputes with Full Tilt, paying special attention to the possibility of money-laundering violations, those familiar with the inquiry say. Money-laundering charges might be attractive to the government as they would compel co-operation from authorities even in countries where gambling is legal.
Full Tilt's web pages say it is registered in Alderney, in the UK's Channel Islands, and regulated there.
The Manhattan US attorney declined to comment, as did justice department officials in Washington. Eric Jackson, a Los Angeles civil attorney representing Mr Lederer, Mr Ferguson and a software company with ties to Full Tilt, said his clients had not been informed of the grand jury inquiry.
"We are not going to comment about a speculative grand jury investigation that we are not aware of," Mr Jackson said.
Both Mr Lederer and Mr Ferguson filed a motion to dismiss the civil case but have not addressed the substance of the allegations at this stage.
Criminal charges, especially against the celebrity Americans known for televised tournament play, would mark an escalation in the US government's stuttering moves against internet gambling.
But it would fit the federal law enforcement strategy by trying to make an example out of prominent targets, according to Nelson Rose, an author of books on gambling law and adviser to some companies in the industry. "They are waging this war of intimidation," Mr Rose said. "There are not a lot of good statutes, so they go after high-profile targets and try to intimidate everybody."
The justice department maintains online poker violates the decades-old Wire Act, and it gained strength with the 2006 Unlawful Internet Gambling Enforcement Act. But not all judges agree on the former, and Mr Rose said he did not know of any criminal charges brought under the 2006 law, which has been criticised for poor wording.
While various bills are circulating in Congress that would at least permit the states to authorise and regulate online poker, federal agents have continued to take shots at leading figures under money-laundering and other laws.
Even though London-traded PartyGaming pulled out of the US market after the 2006 bill was passed, it paid $105m (€77m, £70m) last April to avoid prosecution. Last year a Canadian payment processor traded on Nasdaq forfeited $19m for handling gambling transactions before the 2006 law.
****
WOW scary stuff
hno:
