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US Department of Justice allegedly freezing accounts worth up to $33 Mio!

June 10th, 2009

Read this article at pokernews.com

Widespread but previously unverified reports of a Department of Justice-ordered seizure against three bank accounts operated by online poker sites servicing US players have now been confirmed, with the Poker Players Alliance announcing that as much as $33 million in temporarily frozen funds may be involved. The seizure centers on a rumored 24,000 accounts involving customers of Full Tilt, PokerStars and the Cereus Network (UltimateBet / Absolute Poker).

Three separate banks were involved in the seizure, with the order emanating from the United States District Court of Southern New York. That U.S. district court has been at the focal point of Department of Justice efforts against various online gambling concerns and online-poker sites, which the DoJ maintains are illegal, though no case involving online poker has ever been tried. The New York district is the same one involved in prominent recent cases or settlements against NETeller, PartyGaming, and that company’s co-founder Anurag Dikshit, each of which involved a settlement of over $100 million.

While the DoJ based its seizures here under the 1961 Wire Act , poker-only sites such as those affected by this latest order have long maintained that online poker is not covered by the cited laws. In fact, the latest seizures represent the first time that the United States' DoJ has attempted an action against entities associated only with online poker, as opposed to sportsbetting or casino gaming concerns. (Citing the pending legal situation, none of the online sites contacted for this story were able to provide a comment on the seizure.)

Checks affected by the seizure were issued during a roughly one-week span in late May and early June, but not all checks were affected by the seizure, which in itself has already been alleged to be unlawful. In addition, alternate methods for re-sending payments to impacted players are already being put in place.

The Poker Players Alliance quickly issued a statement protesting the seizure, citing several potential legal issues as outlined in a June 8th communication to the US Southern NY court. In its statement on the matter, the PPA promised some form of pending legal action, while also requesting the opportunity to be heard “in any future warrant hearings” regarding poker. From the PPA release:

"The PPA is disappointed that this unprecedented action has been commenced against law abiding poker players. The payment processor funds frozen by the Southern District of New York belong to individual poker players - not operators of poker websites - and do not represent the proceeds of any gambling activity, much less illegal gambling activity. This money should be immediately released by the Southern District to ensure that player payouts are not further disrupted. To that end, the PPA is coordinating a legal strategy to appropriately protect PPA members who are impacted by the Southern District's actions. Further, the PPA has contacted the affected poker websites and has been informed that deposit and payout issues of players are being addressed and will be fully satisfied."

From later in the PPA statement: "We are also concerned that the Southern District has selectively taken action against online poker when the current law regarding the activity is far from clear, and policies from various levels of government are inconsistent at best. In fact, no federal or state court has ever found a payment processor or a player accessing an Internet poker site to have violated the federal laws alleged by the Southern District in this case.”