An image of the notice posted in place of the shut-down Poker sites as of publishing
(WEB HOST INDUSTRY REVIEW) — As has been extensively reported over the weekend, the US government shut down three of the world’s largest online poker sites, in a massive case alleging billions of dollars in money laundering and bank fraud. According to several reports appearing over the weekend, payment processing firms involved in the transactions may have been involved in helping federal prosecutors build their case.
Over the weekend, it was widely reported that the websites of Full Tilt Poker, PokerStars and Absolute Poker, three of the largest online poker sites, had been seized by the US Department of Justice, along with bank accounts (74 of them, in 14 countries) belonging to the companies and their founders. Reports said the founders of the sites could face up to 20 years in jail if found guilty of breaching US anti-gambling and money laundering laws.
While most of the hosting industry impact of the news is related to the impact of the businesses as customers – all of them are massive web applications, but all of them are hosted offshore.
In shutting down the sites, the DOJ alleges that the poker sites engaged in massive and elaborate bank fraud in finding ways to accept the payments from payers, illegal in the United States. The alleged acts involved tricking, or effectively bribing banks into accepting the payments, often disguised as payments to online retails of golf balls, jewelry or other goods.
A report appearing in the Australian publication the Courier-Mail suggests that payment processors involved with the online gambling business in its early years may have been key in helping the FBI to build its case against the poker sites.
The report specifically singles out Daniel Tzvetkoff of Brisbane, who had founded (along with a few others) a payment processing firm called Intabill, based out of the British Virgin Islands.
Tzvetkoff, says the Courier-Mail, was charged last April with money laundering, bank fraud and conspiracy for Intabill’s role in processing $543 million in illegal gambling earnings.
According to the report, “he was mysteriously bailed last August, and US authorities are using his inside knowledge of the gambling industry to go after gaming companies.”
Though he had been facing up to 75 years in jail in the US, Tzvetkoff has reportedly made a deal with prosecutors that has seen him freed on bail and living in “a secret New York location.”
About Liam Eagle
Liam Eagle has worked as a contributor to the Web Host Industry Review since its inception in 2000, and as editor since 2003. He has been editor of the WHIR's print magazine since its launch. His daily involvement in the gathering and reporting of Web hosting news and his regular interaction with Web hosting leaders gives him an uncommonly broad appreciation of the issues and tends facing the business. Through his WHIR blog, Liam spots Web hosting trends and offers opinions on the industry-wide impacts of major developments and the motivation behind big announcements. Follow him on Twitter @liameagle
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