UB/ AP Bankruptcy?

See link below. Hope Prahlad didnt leave too much in his online account to get screwed by them twice.. lol..

Poker News Linky

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I wonder if we might actually get our UB money back.

Article

I want to know why the heck these sites aren't all over the courts suing for their rights. By almost every legal precedent I have seen cited and of course the court of public opinion, the sites are in good legal standing.

It's the bank fraud arguments that may stick. I think the DOJ will lose their argument that they were illegally running an gambling operation, as they did in 2005 (this argument is new, which is why they can try again), but they can still get the sites on lying to banks about the nature of these transactions.

I think the lying very likely took place, the question is whether the DOJ will be able to peel back the corporate veil and pin it on the sites, rather than the payment processors.

Every argument I've read stated that in order to commit fraud, you must have misled the entity (bank in this case) involved AND they must have lost something of value because of it. The banks, however, MADE millions of dollars in processing fees. Therefore, from the legal opinions I've read, these charges won't stand up.

And for what it is worth, here is an absolutely great article on all of the legal stuff behind this:
http://www.relentlessdefense.com/our-team/kevin-j-mahoney/commentary-on-high-profile-cases/u-s-attorney-s-office-on-tilt/

I highly recommend everyone read it and pass it along to everyone they know.

Yeah, it is a good article, but it's written more as a defense, than it is an unbiased view of the law. Another way to put it, the DOJ will argue against every point, including and beginning with the legality of internet poker.

If you want to check the view of the other side, the full indictment is online <http://pokerreviewworld.com/articles/comm_page/1/Complete-Department-of-Justice-Indictment-on-Full-Tilt-Poker-Pokerstars-Absolute-Poker-Released/26/>.


I can't cut and paste, but if you scroll down to p. 34 and count eight, it outlines the fraud charges. As to the other article's point about enriching the payment processors, that's not who they defrauded. By lying about the nature of the transactions, the payment processors defrauded the other banks. Ie. they are alleging a payment processor told my bank (Compass Bank) that it was sending money to some false entity, in reality, it was to a poker site, which is allegedly in violation of the UIGEA.

Certainly, it remains an open question that fraud must have a victim, and whether or not the custodian bank can be a victim in this arrangement. Though, it hurts our case that none of these banks wanted to knowingly process internet gambling transactions.

Here is a blog post by a poker playing lawyer. He came to similar conclusions as my poker playing lawyer friend, and the original post is here. His basic conclusion is that the bank fraud charges could be a problem, but most of the other charges have strong defenses.

I'll read the blog tomorrow when I'm more awake, but I just wanted to point out that you defended against your own argument. Since the charges of illegal internet gambling won't stand (because poker isn't gambling), the banks were not processing something in violation of UIGEA because the sites weren't in violation of UIGEA because of the funds transferred weren't part of illegal gambling.

If you believe the Supreme Court Decision of Cleveland vs. US cited in the article I linked in conjunction with the open ended question of what fraud is in the article wags cited, things still look really good for the sites.

The problem is they are going to shut down the sites by going after the owners. These owners have tons of money and don't want to go to jail so they may just cop a plea to protect themselves just in case. What this really comes down to is the gubernment is strong arming people to scare things to be their way at the expense of the citizens.