Banks Accused of Allowing Online Gambling Companies to Launder Money

Strategic Insights -

The US Justice Department has filed a complaint accusing several online poker companies and individuals of defrauding online players and tricking banks into processing illegal transactions. Bank of America, JPMorgan Chase, Wells Fargo, and Citigroup are among the banks unwittingly holding deposits of these companies. The Justice Department alleges that the companies, including Full Tilt Poker and Poker Stars, distributed millions of dollars to themselves and used Visa and MasterCard's identifying transaction codes to circumvent anti-gambling laws.

Key Takeaways:

  • The US Justice Department has accused 22 online poker companies and several individuals of defrauding online players and tricking banks into processing illegal transactions.
  • Bank of America, JPMorgan Chase, Wells Fargo, and Citigroup are among the banks unwittingly holding deposits of these companies.
  • The Justice Department alleges that the companies, including Full Tilt Poker and Poker Stars, distributed approximately $443,860,529.89 to themselves from April 2007 to April 2011.
  • The companies allegedly used Visa and MasterCard's identifying transaction codes to circumvent anti-gambling laws, creating the false appearance that transactions were unrelated to internet gambling.
  • The Justice Department's complaint also charges several individuals with conspiring to violate the Unlawful Internet Gambling Enforcement Act, conducting illegal gambling businesses, and conspiring to commit wire and bank fraud.
  • The complaint was filed on Tuesday and details a complex scheme to launder money and deceive banks into processing transactions.

Statistics:

  • The Justice Department alleges that the companies distributed approximately $443,860,529.89 to themselves from April 2007 to April 2011.
  • The companies used Visa and MasterCard's identifying transaction codes to circumvent anti-gambling laws.
  • The Unlawful Internet Gambling Enforcement Act (UIEGA) was passed in 2006.
  • The complaint charges several individuals with conspiring to commit wire and bank fraud.

Sources:

  • TheStreet
  • U.S. Justice Department