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Payment Processor for Online Poker Case Pleads Guilty

Written By: PokerNet.com | March 27, 2012 | Posted In Poker News

32-year-old Nevada resident Chad Elie, one of the 11 people charged last year for illegal internet gambling has pleaded guilty for helping non-US poker companies make transactions from customers who are residents of the US.

The founders of the three large poker companies, namely, Absolute Poker, PokerStars and Full Tilt Poker were also among those who faced charges. One of the co-founders of Absolute Poker already pleaded guilty to conspiracy charges last December.

The offshore websites was said to have billions of dollars of revenue from their US players. US authorities charged them with criminal charges including money laundering and illegal-gambling offenses. The poker companies have since then stopped serving US players.

Elie was said to have opened bank accounts in order to facilitate the payments to the poker companies including Full Tilt and Poker Stars. He also said that the bank accounts were for “unrelated e-commerce businesses”. Ellie admitted to this at a hearing in Manhattan federal court, Monday.

“I knew that my conduct was wrong,” Elie said as he pleaded guilty to committing bank fraud and operating an illegal gambling business. The federal prosecutors said that the three poker companies side-stepped the law by masking their revenue from US customers as payments to non-existent online merchants for golf balls, jewellery, flowers and other merchandise.

The charges were filed under the Unlawful Internet Gambling Act, the 2006 law made it a crime for banks and other companies to knowingly accept electronic payments in connection with illegal Internet gambling. It isn’t illegal for a U.S. resident to play poker online for money, but the U.S. essentially put a stranglehold on the ability of such sites to make payments to their customers by outlawing payment processing.

The plea deal for Elie recommends a sentence of six months to a year in prison and he also agreed as part of the plea to forfeit $500,000 within two months, along with his interest in more than $25 million held in payment processing accounts in the United States and abroad.

Elie had been slated to go to trial with John Campos, former vice chairman of SunFirst bank, a defunct private bank from Utah but Campos has asserted his innocence. Assistant US Attorney Arlo Devlin-Brown said his office had spoken with lawyers for Campos and would know by Wednesday Campos intends to go to trial.

Prosecutors has alleged that Elie approached Campos in September 2009 after many US banks started shutting down the accounts used by the poker companies at the time as it was becoming difficult to process payments. Elie was a part-owner at SunFirst and prosecutors alleged that Campos agreed to do so for a $10 million investment in SunFirst Bank by Mr. Elie and an associate. SunFirst was seized by banking regulators in November.

Source: The Wall Street Journal

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