Although there are moves in the halls of Congress to enact regulation of the online gaming industry, the U. S. Department of Justice on Friday moved to put a hold on nearly $30 million in bank accounts across the country.
According to the Associated Press and the Poker Players Alliance, the U.S. Attorney for the Southern District of New York instructed three banks to freeze the accounts of payment processors for what it views as transactions that were “…involved in money laundering transactions and illegal gambling offenses.” The DoJ issued letters to organizations such as Wells Fargo in San Francisco, Alliance Bank in Scottsdale, AZ and another banking institution in Los Angeles.
It appears that the move was made against accounts held by the payment processor Allied Systems. Strangely enough, the DoJ is not making this move as a result of the Unlawful Internet Gaming Enforcement Act (UIGEA) of 2006. The DoJ has stated that it issued the requests as a result of violations of the Wire Act of 1961 and the Illegal Gambling Business Act, which in the past has only been applied to sports books.
The Poker Players Alliance, with one million members to its name, is attempting to step in as an advocate of those whose money has been seized. In a statement issued by the PPA yesterday, former U.S. Senator and PPA Chairman Alfonse D’Amato said, “The PPA is disappointed that this unprecedented action has been commenced against law abiding poker players. The payment processor funds frozen by the Southern District of New York belong to individual poker players – not operators of poker websites – and do not represent the proceeds of any gambling activity, much less illegal gambling activity. This money should be immediately released by the Southern District to ensure that player payouts are not further disrupted.”
Another issue that the PPA is concerned about is how the DoJ didn’t act through what would be considered the proper legal channels. The DoJ did not obtain any warrants or orders from the court to force the banks to freeze the money in question; it simply sent letters to the banks to force the freeze on the accounts. “Seizure of money without judicial authority and litigation tactics (is) inconsistent with previously stated Department of Justice policy”, D’Amato continues in his statement.
A situation similar to this happened in January of 2007 when the DoJ froze approximately $60 million that had been in the coffers of Neteller, the online transaction organization that had been one of the most popular means for players to make gaming transactions. After the arrest of the founders of the company and much negotiation, Neteller agreed to pay a fine of $136 million and leave the U. S. market. Once the agreement was reached, the money in question was released to the players.
TightPoker will continue to monitor this situation and keep you up to date on further information as it comes available.

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