Department of Justice Seizes $30 Million
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June 2009
Early in June some players began to report on various poker forum websites that checks they were receiving from both PokerStars and Full Tilt Poker were not being honored when they tried to deposit them. Initially, it was passed off as random problems, perhaps with the players' banks. However, the reports kept coming in, and before long, on June 9th it was revealed that the government had frozen more than $30 million in funds related to payments from some poker sites.
In fact, the assistant U.S. attorney for the Southern District of New York, Arlo Devlin-Brown, told four banks, in a faxed message, that they should consider the money "legally seized" by the government. He stated that the funds were frozen "because they constitute property involved in money laundering transactions and illegal gambling offenses." He also wrote, "The FBI has authority to seize proceeds of specified unlawful activity without a warrant under exigent circumstances."
The banks that were confirmed to have received the faxes included Wells Fargo in San Francisco, Citibank, Alliance Bank of Arizona and one other bank. The letter instructed the banks to freeze the accounts of two payment processors, Account Services and Allied Systems. These two companies primarily processed cash-outs for PokerStars and Full Tilt Poker, the two largest online poker sites in the world.
The Poker Players Alliance responded immediately. Executive director of the PPA, John Pappas, called the move an "unprecedented action" by the government against online poker players. He continued, "The PPA will pursue every legal course available to ensure that poker players' funds are not seized and their right to play poker online is protected."
He reiterated the PPA's stance on the situation, saying, "We contend playing online poker is not unlawful. The government is going after the players' money, not the sites'. The fact is, there is no federal law against playing online poker." Pappas also said on the PPA website that the Department of Justice "has significantly overstepped their legal boundaries in taking this action." He went on to say that "the seizure of Allied Systems' bank accounts would constitute a violation of due process because there are no exigent circumstances to justify deprivation of PPA members' property without prior notice and a hearing."
Meanwhile, the poker sites in question assured players that they would receive all money due to them. Full Tilt seemed to respond to the situation a little quicker, as they immediately switched to a back-up payment processor. Their customers were reporting, again through various poker forums, that they received their payments sooner than PokerStars customers did. However, both sites handled the situation very well and in short time, all players received the funds they were due.
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