The founders of three of the world’s best known online poker companies, one of which has offices in Dublin, were among 11 people charged by the US in a case that seeks at least $3 billion in forfeitures and penalties.
Pokerstars, Full Tilt Poker and Absolute Poker were yesterday served with indictments including charges of bank fraud, money laundering and illegal gambling.
It is the latest in a series of criminal cases against Internet gambling companies brought by US Attorney Preet Bharara in Manhattan.
PokerStars, based on the Isle of Mann, Full Tilt Poker is based in Cherrywood, Dublin and Absolute Poker of Costa Rica are the leading online poker sites doing business with US customers, according to the indictment.
The charging documents name two principals from each company and others who allegedly worked with them to illegally process payments.
"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," Mr Bharara said in a statement.
"To circumvent the gambling laws, the defendants also engaged in massive money laundering and bank fraud."
Prosecutors allege that after the US enacted a law in 2006 barring banks from processing payments to offshore gambling websites, PokerStars, Full Tilt and Absolute Poker worked around the ban to continue operating in the US.
The internet poker market was worth $5.1 billion last year, 7.1 per cent higher than in 2009, according to H2 Gambling Capital, which supplies data on the industry.
The global online gambling market now is about $30 billion. None of the poker company principals indicted are in the US and they haven't been arrested, Mr Bharara's office said.
Those charged include Isai Scheinberg and Paul Tate of PokerStars; Raymond Bitar and Nelson Burtnick of Full Tilt Poker; and Scott Tom and Brent Beckley of Absolute Poker.
Michele Clayborne, a spokeswoman for Full Tilt, didn't immediately return a voice-mail message left at her office seeking comment.
Dublin based Pocket Kings is a subsidiary of and service provider to Full Tilt Poker. It employs some 700 people at its offices in Cherrywood.
Pocket Kings accounts for the 12 months to the end of April 2009 show the company’s pretax profits declined by 26 per cent from €8 million to €5.9 million. Its gross profit fell 5 per cent from €47.1 million to €44.7 million.
The poker companies named in the indictment are accused of using fraudulent means to circumvent federal laws and "trick" banks into processing the payments on their behalf.
In one instance, after US banks and financial institutions detected and shut down multiple fraudulent bank accounts used by the betting websites in late 2009, Mr Scheinberg and Mr Bitar developed a new processing strategy that didn't involve lying to banks, prosecutors said.
They allegedly concealed the money they received from gamblers by disguising it as payments to hundreds of non- existent online merchants purporting to sell items online such as jewellery and golf balls.
Of the billions of dollars in payment transactions that the poker companies tricked the U.S. banks into processing, about one-third of the funds went directly to the poker companies as revenue for so-called "rake" charges to players on almost every poker hand played online, prosecutors said.
PokerStars, Full Tilt and their payment processors persuaded the principals of a few, small local banks facing financial difficulties to engage in such processing in return for multimillion dollar investments in the banks, the US said.
