Cathy Scharf, the compliance officer, shared her experiences at SunFirst Bank in Utah at an anti money laundering conference, which was held at Las Vegas recently. SunFirst Bank had illegally processed around $200 million for Full Tilt Poker and PokerStars before the federal government crackdown of April 15, 2011.
She said that the SunFirst Bank authorities threatened that they would get her arrested if she spoke about the bank’s illegal activities. Ultimately, she co-operated federal regulators and exposed the bank. According to Scharf, several other banks must be tied up with US-facing offshore online gambling sites and must be processing gambling funds illegally.
Scharf got a job at SunFirst Bank in Utah when the country was steeped in economic recession. She even had to move from Las Vegas to St. George in Utah in order to handle the job. During her very first week at the bank, she discovered that the bank was violating the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006 by knowingly processing gambling-related funds for PokerStars and Full Tilt Poker. She said: “They just told me. And also, I could see from the stacks of slips going in and out.”
This tiny bank in Utah processed funds that were deposited into offshore online gambling funds, as a result of which it collected $400,000 in fees every month.
Addressing the audience at the conference, she said that she felt like an outsider at the bank not only because she was new to the town, but also because she was a compliance officer at the bank. She said: “They wanted to keep making money as they could bring the bank back. My frame of mind was just shoot me and put me out of my misery.”
She then spoke to a lawyer and began keeping a diary of what was going on at the bank. She even began cooperating with federal regulators.
The vice chairman of SunFirst Bank was arrested in 2012. Speaking about Scharf’s brave act, Daniel Wager, head (due diligence) for the New York based TD Bank, said: “She stopped potentially hundreds of millions of dollars that were coming through the bank, and she tightened up the industry as a result.”
Scharf, however, still suspects that other US banks are tied up with offshore gambling companies as several offshore online poker rooms still accept US players. Simultaneously, she is happy that her role as a whistleblower in the bank is over.