Payment Processors For Internet Poker Companies Sentenced In Manhattan Federal Court
FOR IMMEDIATE RELEASE
Thursday July 26, 2012
Preet Bharara, the United States Attorney for the Southern District of New York, announced that IRA RUBIN, a third-party payment processor, was sentenced today in Manhattan federal court to three years in prison for processing tens of millions of dollars in illegal internet gambling transactions for Pokerstars, Full Tilt Poker, and Absolute Poker. RUBIN’s co-defendant, BRENT BECKLEY, the former head of payment processing for Absolute Poker, was sentenced to 14 months in prison for his role in the illegal internet gambling conspiracy on Monday, July 23rd. Both defendants pled guilty earlier this year to conspiring to violate the Unlawful Internet Gambling Enforcement Act and to commit bank and wire fraud. RUBIN also pled guilty to money laundering. Both defendants were sentenced by U.S. District Judge Lewis A. Kaplan.
According to the Superseding Indictment filed in Manhattan federal court, other documents previously filed in the case, and statements made in court:
In late 2006, Congress enacted the Unlawful Internet Gambling Enforcement Act (“UIGEA”), making it a crime to “knowingly accept” most forms of payment “in connection with the participation of another person in unlawful Internet gambling.” After several Internet gambling businesses withdrew from the U.S. market following the passage of the UIGEA, Pokerstars, Full Tilt Poker, and Absolute Poker/Ultimate Bet (the “Poker Companies”) became the top three Internet poker operators continuing to do business in the United States. Because United States banks were largely unwilling to process payments for an illegal activity such as Internet gambling, the Poker Companies and their agents lied to U.S. banks about the nature of the poker transactions they were processing by creating phony corporations and websites to disguise payments to the Poker Companies.
BECKLEY, who was in charge of payment processing for Absolute Poker, was responsible for identifying third party payment processors such as RUBIN who could use a steady stream of front companies to disguise the hundreds of millions of dollars BECKLEY would collect from Absolute Poker. For example, an Absolute Poker report from the fall of 2007 identified approximately 20 phony internet shopping companies that were used by the gambling company to disguise credit card transactions, such as www.petfoodstore.biz and www.bedding-superstore.tv.
RUBIN served as a third-party payment processor for all three of the Poker Companies, processing well over $100 million in internet gambling transactions through phony front companies with websites purporting to sell everything from clothing and jewelry to golf clubs and bicycles. In order to trick banks into handling these transactions, RUBIN and his associates set up phony offices so that bank officials conducting site visits would be fooled into thinking that the front companies were legitimate.
* * *
In addition to the prison term, Judge Kaplan sentenced RUBIN to three years of supervised release and ordered him to pay $5 million in forfeiture. BECKLEY was sentenced to three years of supervised release and ordered to pay $300,000 in forfeiture.
BECKLEY and RUBIN were originally charged in April 2011 along with nine other defendants. Six of the seven defendants arrested in connection with the Superseding Indictment filed in the case have now pled guilty. The charges against the seventh defendant in custody, Raymond Bitar, the Chief Executive Officer of Full Tilt Poker, who was arrested earlier this month upon his return to the United States, are still pending. The remaining four defendants charged, including the founders and directors of payment processing for Full Tilt Poker and Pokerstars – reside outside the United States and are at large.
The charges and allegations contained in the Indictment against Bitar and the four other defendants are merely accusations, and they are presumed innocent unless and until proven guilty.
Mr. Bharara praised the FBI for its outstanding work in the investigation, which he noted is ongoing. Mr. Bharara also thanked Immigration and Customs Enforcement’s Homeland Security Investigations New York and New Jersey offices for their continued assistance in the investigation.
This matter is being handled by the Office’s Complex Frauds Unit. Assistant U.S. Attorneys Arlo Devlin-Brown, Andrew D. Goldstein, Niketh Velamoor, and Nicole Friedlander are in charge of the criminal case, and Assistant U. S. Attorneys Sharon Cohen Levin, Jason Cowley, and Michael Lockard are in charge of related civil money laundering and forfeiture actions.