PokerStars, Full Tilt Poker and Absolute Poker are battling to convince international customers that their money is still safe after the .com websites of all three poker giants were siezed by the FBI and their founders charged with money laundering.
Australian internet tycoon Daniel Tzvetkoff has turned supergrass on the websites after they turned him in to the FBI last year. Their idea of revenge has backfired in a big way with the bankrupt Aussie ratting them out to save his own skin.
Tzvetkoff, 28, who in 2008 was worth around $80 million, was arrested in April last year while attending an internet billing conference in Las Vegas. He was charged with being the mastermind behind a $US540 million money laundering racket.
The FBI were allegedly tipped off by the online poker kingpins, who had been working with Tzvetkoff but turned on him after he allegedly stole millions of dollars from them.
Tzvetkoff, who by then had filed for bankruptcy, was believed by authorities to have a secret stash of $US100 million, but was facing up to 75 years in jail.
Tzvetkoff was mysteriously released from jail in June after a few only a few weeks on remand.
The reasons were not clear at the time, but they are now. Tzvetkoff had ratted out the very people who had tipped off the authorities and got him arrested in the first place.
On Friday – what has now become known in the online poker community as “black Friday” – the FBI arrested the top executives of PokerStars, Full Tilt Poker and Absolute Poker. In all, 11 people have been charged with bank fraud, money laundering and illegal gambling offences; they face up to 30 years in prison and their US websites have all been shut down.
The arrests stem from the fact that online gambling in the US is illegal. Tzvetkoff was accused of creating an illegal system that allowed the overseas-based poker sites to accept billions from US gamblers while hiding the fact that it was gambling-related income from US banks using phony shell companies and offshore accounts.
“These defendants concocted an elaborate criminal fraud scheme, alternately tricking some US banks and effectively bribing others to assure the continued flow of billions in illegal gambling profits,” said US Attorney Preet Bharara.
“Foreign firms that choose to operate in the United States are not free to flout the laws they don’t like simply because they can’t bear to be parted from their profits.”
John Pappas, executive director of the Poker Players Alliance, said in a statement on YouTube that he believed the FBI action was “a declaration of war against poker and the people who play it”.