Inside the Press Release

May 23, 2011 - 11:44 PM EDT
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As we’ve seen in the last couple months, the US Attorneys like to release statements with all of their indictments which lay out the charges, identify the defendants and give credit to the law enforcement agencies and individuals who conducted the investigation. The most recent indictments proved no different.

This press release was certainly telling. In it, four distinct agencies (three federal and the state of Maryland) were identified as having participated in the investigation of the indicted persons and sites.  All three of the federal agencies offered statements summarizing their involvement in the investigation, stating why that specific agency felt it was important these alleged criminals be brought to justice. These “policy statements” of the different groups offer insight into why they’re involved and can give assistance in guessing what actions law enforcement will take going forward.

US Attorney for the District of Maryland

“It is illegal for internet gambling enterprises to do business in Maryland, regardless of where the website operator is located,” said U.S. Attorney Rod J. Rosenstein. “We cannot allow foreign website operators to flout the law simply because their headquarters are based outside the country.”

The basis of his statements is quite simple: These individuals were flaunting US law and breaking federal and state statutes while trying to remain immune by sitting outside of US borders. Continuing to allow them to do so sets a bad precedent. This is fairly straight forward and nothing new.

U.S. Immigration and Customs Enforcement, Homeland Security Investigations

“These indictments are the direct result of impressive undercover investigative work by our agents, along with the close collaboration of our law enforcement partners here in Maryland,” said William Winter, Special Agent in Charge of ICE’s Homeland Security Investigations (HSI) in Baltimore. “The proceeds from illegal Internet gambling are often used to fuel organized crime and support criminal activity. ICE HSI will work diligently to uncover illicit transactions involving these types of financial crimes. Together, with our law enforcement partners, we will disrupt and dismantle organizations that commit these crimes, regardless of their location, whether here in the United States or abroad.”

Here is a synopsis of what ICE Homeland Security Investigations does, direct from their website:

“The ICE Homeland Security Investigations (HSI) directorate is a critical asset in the ICE mission, responsible for investigating a wide range of domestic and international activities arising from the illegal movement of people and goods into, within and out of the United States.

HSI investigates immigration crime, human rights violations and human smuggling, smuggling of narcotics, weapons and other types of contraband, financial crimes, cybercrime and export enforcement issues. ICE special agents conduct investigations aimed at protecting critical infrastructure industries that are vulnerable to sabotage, attack or exploitation.”

These are the same individuals behind the domain name seizures of popular illegal video streaming sites such as ATDHE.net. To see them now extend their jurisdiction into the online poker realm is eye-opening. It shows that the US Government plans on using all assets available to seize domains and police the internet for anyone allegedly violating US gambling and the associated financial statutes, regardless of where the entities which own the domains reside.

The references to “organized crime” and “criminal activity” are interesting. The ICE agent infers these are some of the primary policy reasons in going after the online gambling sites. It will be interesting to see as more information becomes available if there is any evidence of an organized crime connection to gambling sites or the indicted. Organized crime has been rumored to be connected to online gambling before, but Subject: Poker has never seen clear evidence of it on a wide level. If evidence were to come out of a wide connection between online gambling operators and organized crime, it would be a devastating blow to the efforts of those trying to keep existing international operators in business.

Internal Revenue Service – Criminal Investigation

“Internet gambling, along with other types of illegal e-commerce, is an area of great interest to IRS Criminal Investigation,” said IRS Special Agent in Charge Rebecca A. Sparkman. “Laundering money from illegal activity such as illegal internet gambling is a crime. Regardless of how the money changes hands – via cash, check, wire transfers or credit cards – and regardless of where the money is stored – in a United States financial institution or an offshore bank – we will trace the funds. IRS Criminal Investigation will vigorously investigate and recommend prosecution against the owners and operators of these illegal enterprises to the fullest extent possible.”

(Emphasis in the quote is mine.) We now have a third massive and powerful federal agency entering the fray of internet poker sites.  The IRS’s involvement should be obvious: They seek to prevent money laundering and the illicit and backhanded transfer of funds to and from the United States.  This is similar to the core of the allegations from the DOJ’s  April 15th indictment. The IRS’ involvement shows this was simply not a side project for lawyers in the US Attorney’s office, but a government-wide push to stop the allegedly illegal transfer of funds to and from the US financial system. Simply put, these corporations have been using creative accounting to move funds in and out of the US, and the government simply will not have it anymore.  The UIGEA forced a lot of these processing procedures underground and, in going underground, they have allegedly violated numerous US and state statutes.

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