The U.S. Department of Justice seized the .com internet addresses of the three online gambling sites, replacing them with a takedown notice, but let Full Tilt and PokerStars use them again once they pledged to no longer serve the U.S. About 76 bank accounts in 14 countries were frozen, including an unknown amount of player funds. The prosecutors are seeking jail sentences for the 11 criminal defendants including site founders and executives, U.S. payment processors, and an executive of a small Utah bank, who prosecutors maintain were engaged in an elaborate criminal fraud scheme, using the bank in Utah to mis-code transactions with other banks to bypass UIGEA restrictions.
Antigua and Barbuda officials considered action in the World Trade Organization. The companies ceased their U.S.-facing ad campaigns, resulting in cancellations of poker-themed television shows. In June, Full Tilt had its eGambling license suspended, which halted all of its remaining online play. The Alderney Gambling Control Commission on the British Channel Islands later revoked its license on September 29.
On July 31, 2012, US government dismissed "with prejudice" all civil complaints against all PokerStars and Full Tilt Poker companies after coming to a settlement with PokerStars which includes PokerStars purchasing Full Tilt. PokerStars and Full Tilt admitted no wrongdoing as part of the settlement, which ends all litigation between the government and the poker companies. The criminal indictments remain in place for the named individuals.
Since Federal law says nothing specifically about online poker, or any gambling other than sports betting, Preet Bharara, the U.S. Attorney for the Southern District of New York, bases his case on a New York law that makes it a Class A misdemeanor, punishable by up to a year in prison, to run a game of chance where bets are placed within the state.[10] Although none of the sites are actually run out of New York (PokerStars is based on the Isle of Man, Full Tilt Poker is in Ireland and Absolute Poker is from Costa Rica), he was able to obtain a felony indictment for UIGEA violations. In addition to the 2006 UIGEA, the defendants were charged with violating the Illegal Gambling Business Act of 1955.
Additionally, in April 2010, the former head of Intabill, a defunct payment processor in Australia, Daniel Tzvetkoff, was arrested in Las Vegas by the FBI. He was charged with money laundering, bank fraud, and wire fraud. PokerStars and Full Tilt had previously claimed that Tzvetkoff cheated them out of at least 100 million dollars. However, he was quietly let go a few months later in August 2010. He reportedly turned state's evidence after being threatened with a 75-year prison sentence for alleged UIGEA violations.
The indictment also alleged that the executive officers of the sites had sought investment in SunFirst Bank in Utah, which they were using to obtain and pay out player funds by allegedly mis-coding transactions.[16] Although no one was actually being defrauded per se, and money from an otherwise legal operation can not be "laundered", these actions form the basis for the fraud and money laundering charges. This case marks only the second time that the Department of Justice has alleged violations of the 2006 UIGEA, (after the indictment of Daniel Tzvetkoff).
A secret grand jury handed down a sealed indictment on March 10, 2011.
On December 20, 2011, Absolute Poker co-founder Brent Buckley pled guilty to misleading banks. The plea deal calls for him to receive a sentence between a year and a year and a half in prison. Sentencing was set for April 19, 2012. Buckley was sentenced to 14 months.
On January 17, 2012, Ira Rubin entered a plea agreement in a Manhattan federal court in front of U.S. Magistrate Judge Gabriel Gorenstein. Rubin agreed to plead guilty to three of the nine counts of conspiracy to commit bank fraud he faced and is due to be sentenced on May 17, 2012. Rubin is expected to be sentenced to 18–24 months of prison. He received a three-year sentence as Judge Kaplan laid down the hammer, stating, “You are an unreformed con man and fraudster,” and calling his actions a “brazen” defiance of U.S. law. “A significant sentence is necessary to protect the community.”
John Campos pleaded guilty in March 2012 to a single misdemeanor bank gambling charge. He was sentenced in June to three months in prison. During his plea, Campos said his processing of the gambling proceeds for PokerStars and Full Tilt Poker was not in return for a $10 million investment in the bank.
