News24

US man admits guilt in online fraud

2012-03-27 10:33

New York - One of two men nearing trial in a case that shut down US operations for three overseas internet poker companies has admitted he conspired with others to deceive US financial institutions so they would process hundreds of millions of dollars in gaming transactions.

Chad Elie, of Las Vegas, entered the guilty plea in US District Court in Manhattan to a count of conspiracy to commit bank fraud and to operate illegal gambling businesses. The plea came as the money processor was scheduled to go to trial on April 9 along with former bank executive John Campos, who has asserted his innocence.

A prosecutor said the government will likely know within days whether Campos intends to go to trial.

A plea deal reached between prosecutors and Elie, 32, recommends a sentence of six months to a year in prison for him. He is scheduled to be sentenced on October 3. He also agreed as part of the plea to forfeit $500 000 within two months, along with his interest in more than $25m held in payment processing accounts in the US and abroad.

Elie and Campos were the only men headed to trial after others among a dozen people charged in the internet gambling case reached plea agreements or remained fugitives.

US operations

Prosecutors have sought $3bn in money laundering penalties and forfeiture after targeting three companies based overseas: PokerStars based on the Isle of Man, Full Tilt Poker and Absolute Poker. Elie admitted serving as a payment processor for all three companies at various times from 2008 through early 2011.

The government said Elie and others created phony corporations and websites to disguise payments to the poker companies.

Elie admitted as part of his plea that he had deceived one bank into processing online gambling proceeds by saying the money moving through accounts was the result of businesses unrelated to gambling. He said that when the bank later questioned the revenues: "I denied the account was being used for online gambling transactions."

Full Tilt Poker has defended its executives and said it has suspended play for real money on its website in the US but would continue offering gambling on poker in other countries.

Absolute Poker said it would continue its US operations because "the US Congress has no control over" its payment transactions, authorities say.

PokerStars said it has had to suspend real-money play to customers based in the US.