Posted at 08:54 PM in Bribery, Corruption, Gambling & Crime, Gambling & Money Laundering, Gambling Europe, Match-Fixing, Sports Betting | Permalink | Comments (0)
There are approximately 200 junkets operating in Macau. They typically bring wealthy gamblers from China, and rent VIP Rooms in Macau casinos for their clients to gamble. Junkets operators issue credit to their high-roller clients, and earn commissions from the funds gambled by their clients at casinos. They generate about 75% of the funds gambled in Macau. Through sub-agents, they also collect gambling debts in China afterwards.
The Financial Action Task Force has identified money laundering risks with junkets. According to the FATF, the risks arise because there are gaps in controls and weak supervision of VIP Room operations. Junket operators control the movement of money to and from the casinos which can obscure the anti-money laundering processes. Moreover, they bring in high rollers to gamble who are subject to relaxed money laundering vetting, not more, as is required.
The conern is greater, however, than that identified by the FATF. As a result of the junket arrangements in Macau, upwards of 75% of the funds gambing is not subject to anti-money laundering oversight. That is because the junket operators are not subject to AML reporting to a FIU in Macau and their high rolling clients gamble exclusively in the VIP Rooms that are managed and operated by the junket operators.
Despite these risks, the Philippines is hoping to enter into arrangements with junkets to help grow the national gambling market and join Macau and Singapore as one of Asia's top gambling destinations. Analysts predict that the gambling market in the Philippines will reach $3 billion by 2015.
The two new casinos are Solaire Resort and Casino on Manila Bay, owned by Bloomberry Resorts Corp., which is controlled by billionaire Enrique Razon Jr.,and is a $1.2 billion project slated to open in March 2013; and Belle Grande Casino in Entertainment City Maninla, owned by Belle Corp., which is controlled by billionaire Henry Sy, and Melco Crown Entertainment Ltd., owned by Australian billionaire James Packer and Hong Kong businessman Lawrence Ho, and is slated to open in March 2014. Melco Crown is listed on the Hong Kong Stock Exchange.
Posted at 06:14 PM in Gambling & Money Laundering, Gambling Asia, Gambling Business, Gambling News, Gambling Philippines, Junkets, Money Laundering | Permalink | Comments (1)
For several years, Ms. Tran, together with several others, cheated the casinos out of US$7 million by various card false shuffling methods during blackjack and mini-Baccarat. C
ourt documents also show that members of her organization bribed casino card dealers and supervisors to perform false shuffles, thereby creating “slugs,” or groups of unshuffled cards. After tracking the order of cards dealt in a card game, a member of the group would signal to the card dealer to perform a “false shuffle,” and other members of the group would then bet on the known order of cards when the slug appeared on the table. By doing so, they repeatedly won millions of dollars. They also used sophisticated mechanisms for tracking the order of cards during games, including hidden transmitter devices and specially created software that would predict the order in which cards would reappear during blackjack games.
Tran was sentenced for, amon gother things, racketeering and money laundering. See earlier post here.
Posted at 05:54 PM in Gambling & Money Laundering, Gambling Canada, Gambling Charges, Gambling U.S.A. | Permalink | Comments (62)
There are approximately 200 junkets operating in Macau. They typically bring wealthy gamblers from areas such as China, and rent VIP Rooms in Macau casinos for their clients to gamble. Junkets operators issue credit to their high-roller clients, and earn commissions from the funds gambled by their clients at casinos.
Mark Lipparelli, Chairman of the Nevada Gaming Control Board, said in an interview this week that outside junket operators, which receive commissions from casinos for their work, are "becoming an area of increased attention for us."
Legalized gambling in the U.S. and Canada is premised on the preservation of the integrity of the gaming industry. In order to obtain and maintain a U.S. state gaming registration, casino operators have to operate their casinos in a way that will not negatively affect the integrity of the gaming industry as a whole. As a result, any link, however small, to criminality with a casino operator affects the integrity of the operator and the industry. The concerns with criminality arise from the fact that there is an identified money laundering risk with junket operators because, among other things, there are gaps in controls and weak supervision of their operations. Junket operators control the movement of money to and from the casinos which can obscure the anti-money laundering process. The VIP Rooms which they operate are not subject to AML reporting requirements and thus a large portion of gambling in Macau operates outside of AML oversight.
Posted at 09:00 AM in Gambling & Crime, Gambling & Money Laundering, Gambling Asia, Gambling U.S.A., Gaming Regulators | Permalink | Comments (11)
Brent Beckley, one of the founders of Absolute Poker, pleaded guilty in Manhattan to conspiracy to commit bank fraud, wire fraud and conspiracy to violate the Unlawful Internet Gambling Enforcement Act and is expected to be sentenced in April 2012. “I knew that it was illegal to accept credit cards from players to gamble on the Internet,” Beckley said to the judge before his plea. “I knew that it was illegal to deceive the banks in this way.”
In April 2011, the U.S. indicted eleven people associated with PokerStars, Full Tilt Poker and Absolute Poker, including Canadians Isai Scheinberg, Nelson Burtnick and Ryan Lang.
The indictment alleged that:
Another defendant, Bradley Franzen, pleaded guilty in May 2011.
Posted at 10:33 AM in Gambling & Crime, Gambling & Money Laundering, Gambling Charges, Internet Gambling, Online Gambing | Permalink | Comments (17)
U.S. Attorney Preet Bharara today announced that his office has amended its civil complaint against Full Tilt Poker to include claims that Full Tilt Poker operated a global Ponzi scheme. The U.S. Attorney says that Full Tilt was not a legitimate poker operation but rather operated as a Ponzi scheme, routinely draining players' accounts for other purposes, including payments to company founders and members of the board, and in the process defrauded players of US$300 million.
The company's lawyer went on the record shortly thereafter and apparently admitted that in 2010, Full Tilt Poker had insufficient funds on hand to meet the demands of player withdrawals. He also said, apparenly on behalf of Full Tilt Poker, that he did not comprehend the statements made by Bharara with respect to the Ponzi scheme. A Ponzi scheme is a fraud whereby the source of distributions to the early investors consist primarily of a return of their own capital or money obtained from new investors and with the payments ultimately stopping when there are no further investors. The result is that everyone loses money except the perpetrators of the fraud.
On April 15 of this year, the U.S. indicted defendants associated with Full Tilt Poker, PokerStars and Absolute Poker on allegations that they fraudulently circumvented anti-money laundering laws and the Unlawful Internet Gambling Enforcement Act (UIGEA) by disguising payments from U.S. gamblers as payments to fictitious online merchants selling other goods and services, lied to banks about the nature of their businesses and set up fictitious corporations, in order to open bank accounts to accept bets from U.S. players. Scheinberg, one of the founders of PokerStars, is alleged to have acquired a 30% interest in a small bank in Utah called SunFirst Bank in exchange for the Bank agreeing to process payments for PokerStars.
In April, the U.S. also filed a civil complaint against the individual defendants and the poker companies to recover US$3 billion in civil penalties for money laundering. Asset restraining orders were issued against more than 76 bank accounts in 14 countries, including Canada, to freeze the accounts on the basis that the funds are proceeds of crime.
Posted at 02:00 PM in Gambling & Crime, Gambling & Money Laundering | Permalink | Comments (22)
The indictment in the U.S. against eleven persons associated with PokerStars, Full Tilt Poker and Absolute Poker, including Canadians Isai Scheinberg, Nelson Burtnick and Ryan Lang, has been made public. The indictment alleges as follows:
Under U.S. anti-money laundering legislation, a person who launders proceeds of crime or participates in a money laundering transaction greater than US$10,000, is liable on conviction to a sentence of up to 20 years and a fine of twice the value of the funds laundered. The U.S. government estimates that billions of dollars were processed in the U.S. by PokerStars, Full Tilt Poker and Absolute Poker as described above between November 2006 and March 2011. The defendants are charged with, among other crimes, laundering proceeds of crime and participating in financial transactions knowing that the transactions involved criminal proceeds. A total of US$4.5 billion is being sought by civil forfeiture.
The U.S. Attorney and the FBI today unsealed an indictment today charging 3 Canadians with money laundering, bank fraud and illegal gambling in connection with the operation of Internet gambling websites that provide online gambling services to U.S. residents. Eight other individuals, mostly residents of the U.S., were also indicted. The defendants include the founders of three of the largest Internet gambling sites - PokerStars, Full Tilt Poker and Absolute Poker.
The 3 Canadians indicted are:
The U.S. has sought the assistance of foreign law enforcement agencies for the arrests of Lang, Burtnick and Scheinberg.
The indictment alleges that the defendants fraudulently circumvented anti-money laundering laws and the Unlawful Internet Gambling Enforcement Act (UIGEA) by disguising payments from U.S. gamblers as payments to fictitious online merchants selling other goods and services, lied to banks about the nature of their businesses and set up fictitious corporations, in order to open bank accounts to accept bets from U.S. players. Scheinberg, one of the founders of PokerStars, is alleged to have acquired a 30% interest in a small bank in Utah called SunFirst Bank in exchange for the Bank agreeing to process payments for PokerStars.
The U.S. also filed a civil complaint against the individual defendants and the poker companies to recover US$3 billion in civil penalties for money laundering. Asset restraining orders were issued against more than 76 bank accounts in 14 countries, including Canada, to freeze the accounts on the basis that the funds are proceeds of crime.
Five Internet domain names used by the poker companies to host the online gambling sites were also seized.
The indictment by the U.S. Attorney General on anti-money laundering law violations is a clever legal manoeuvre that will allow them to prosecute the defendants, secure the extradition of foreign defendants and retain frozen assets with much greater success than if the indictment was based solely on violations of the UIGEA. Most foreign Internet gambling site operators have little to no understanding of international anti-money laundering laws.
The defendants face up to 20 years in prison on the money laundering charges alone.
The co-founder of a group known as the Tran Organization, Van Thru Tran, pleaded guilty in San Diego today to conspiring to cheat 29 casinos in the U.S. and Canada out of US$7 million, including Casino Rama in Ontario and the Monte Carlo in Las Vegas.
Members of the organizations are alleged to have bribed casino card dealers and supervisors to perform false shuffles during card games, thereby creating “slugs” or groups of unshuffled cards. After tracking the order of cards dealt in a card game, a member of the organization would signal to the card dealer to perform a “false shuffle,” and members of the group would then bet on the known order of cards when the slug appeared on the table.
By doing so, members of the conspiracy repeatedly won thousands of dollars during card games, including winning several hundred thousand dollars on one occasion. The members of the organization used sophisticated mechanisms for tracking the order of cards during games, including hidden transmitter devices and specially created software that would predict the order in which cards would reappear during blackjack games.
Tran faces a maximum penalty of 20 years in prison, a $250,000 fine, forfeiture of certain assets, and payment of restitution to the victims.
Posted at 09:20 PM in Gambling & Crime, Gambling & Money Laundering, Gambling Canada, Gambling Charges, Gambling U.S.A. | Permalink | Comments (5)
The U.S. Attorney's Office in Maryland has charged Nick's Amusement Inc. with money laundering arising from an alleged illegal gambling business. The criminal charge comes three months after U.S. prosecutors settled a civil forfeiture action against Nick's Amusement Inc. for US$1 million that involved allegations of illegal gambling at bars and restaurants in Maryland. You can read more here.
Posted at 10:00 AM in Gambling & Money Laundering, Gambling Charges, Gambling U.K. | Permalink | Comments (4)
Douglas Rennick, the Alberta man who was accused of laundering US$350 million in illegal Internet gambling proceeds in the United States last year, pleaded guilty in a federal court in Manhattan to a lesser charge of one count of transmitting wagering information in the U.S. From 2007 to 2009, Rennick opened a number of bank accounts in the U.S. under various corporate entities to receive funds from foreign Internet gambling companies and disburse the funds to U.S. residents. Rennick received about US$350 million from bank accounts in Cyprus used by the offshore Internet gambling companies that he did business with.
Continue reading "Canadian payment processor pleads guilty in U.S." »
Posted at 08:00 PM in Gambling & Crime, Gambling & Money Laundering, Gambling News, Gambling U.S.A., Illegal Gambling, Internet Gambling, Online Gambing | Permalink | Comments (1)
The Las Vegas Sun has an excellent story that captures the connection between gambling operations in different jurisdiction by the same casino operator and the role of gambling regulators here.
Reporter Liz Benston reports that what she calls the sometimes shady way in which casino VIP rooms are operated with the use of junkets in Macau will impact Atlantic City casino operators who also operate, or hope to operate, in Macau. That's because in order to maintain a U.S. state gaming registration, casino operators have to operate their casinos in a way that will not negatively affect the integrity of the gaming industry in that state.
The smallest link to criminality with a casino operator will affect its integrity, and therefore the integrity of the state's control over the industry. The FATF has repeatedly expressed its concern over casino junkets as a potential vehicle for money laundering in Asia.
Posted at 08:08 PM in Gambling & Money Laundering, Gambling Asia, Gambling U.S.A., Gaming Regulators | Permalink | Comments (3)
The US Attorney's Office announced today that an Australian foreign national, Daniel Tzvetkoff, was arrested in Las Vegas today on charges that he assisted illegal Internet gambling companies process about US$500 million in transactions for American gamblers. Tzvetkoff operated a payment processing company called Intabill Inc. Tzvetkoff was charged with gambling conspiracy, bank fraud conspiracy, money laundering conspiracy and one count of money laundering.
The indictment was unsealed in Manhattan federal court today. It alleges that Tzvetkoff convinced banks to provide services through the Automated Clearing House System to offshore online gambling companies and that he disguised the recipients so banks would not know they were online gambling companies.
In an e-mail, one of Tzvetkoff's alleged co-conspirators told him he had hired programmers to develop "unique" websites for the shell companies so that if someone was "checking the companies out there is absolutely no way to tie the companies together." Tzvetkoff replied that it was "perfect." If convicted, Tzvetkoff faces a term of imprisonment of up to 75 years.
Posted at 09:00 PM in Gambling & Crime, Gambling & Money Laundering, Gambling U.S.A., Internet Gambling, Online Gambing | Permalink | Comments (0)
Michael Schuett, the German national living in Florida who was arrested by the US Secret Service on February 18, 2010 for money laundering and operating an unlicensed money transmittal business that serviced online gamblers, has pleaded guilty to the lesser charge of operating an unlicensed money transmitting business. Schuett incorporated numerous companies which received and transmitted about $70 million for online gambling. None of his companies were registered with the Office of Financial Regulation or FinCEN. The US government seized over $2.7 million in assets from Schuett's numerous bank accounts in Florida as well as a Porsche and Audi.
The US Attorney is seeking a sentence of up to five years in federal prison. Our earlier post describing the original criminal complaint is here.
Posted at 04:00 PM in Gambling & Money Laundering, Internet Gambling, Online Gambing | Permalink | Comments (3)
Thomas Koch, a Milwaukee lawyer, has admitted stealing US$2.4 million from a client over a five year period to gamble, the Milwaukee Journal Sentinel reports. He was a regular customer at the Potawatomi Bingo Casino, whose website surprisingly spells "paysbig.com." Koch is no longer practicing law and is seeking treatment at a gambling addiction centre. If convicted, Koch faces a ten year prison sentence.
Posted at 08:20 PM in Gambling & Crime, Gambling & Money Laundering, Gambling Addiction , Gambling U.S.A., Lawyers & Gambling | Permalink | Comments (2) | TrackBack (0)
A German national, Michael Olaf Schuett, residing in Florida, was arrested today in connection with operating an unlicensed money transmitting business that received and disbursed Internet gambling funds to Canadians and Americans. Schuett, also known as Michael and Olaf Schütt, appears not to have known Internet gambling was illegal in the United States. According to a criminal complaint filed on February 17, 2010 in the United States District Court, Fort Myers Division, Schuett:
Schuett is alleged to have operated an unregistered and unlicensed money transmitting business, failing to register with FinCEN, file appropriate money laundering reports and establish a money laundering program. He is also alleged to have laundered the proceeds from his activities.
Employees at Shamrock Bank, Wachovia Bank and Federal Express became suspicious of Schuett's activities in the Fall of 2009. FedEx employees reported that Schuett couriered about 150 packages a week to various addresses in the US. Employees opened several of the packages and determined Schuett was sending cheques.
Posted at 04:00 PM in Gambling & Crime, Gambling & Money Laundering, Gambling Canada, Gambling Litigation, Gambling U.S.A., Online Gambing | Permalink | Comments (0)
According to UK news reports, the Internet gambling company Paradise Bet Ltd., that operated the foreign Internet gambling site paradisebet.com, is connected to the Italian Parisi mafia clan. In December 2009, Italian police froze the assets of the London-based gambling site as part of a three-year operation called "Domino" and seized €220 million worth of assets including 227 properties, 680 bank accounts, 61 luxury cars, 71 horses and 35 businesses in Italy and the UK. Savino (or Savinoccio) Parisi, the 48-year-old apparent head of the clan, was among 74 people arrested by Italian officials in Bari, Italy where Paradise Bet operated an office. He is accused of laundering the proceeds of crime, attempted murder, drug trafficking, loan sharking and interfering with bids.
Posted at 07:00 PM in Gambling & Crime, Gambling & Money Laundering, Gambling Europe, Internet Gambling, Online Gambing | Permalink | Comments (0)
Ran Prostitution Service Disguised as Escort Service
A Washington woman was sentenced today to two years in prison after pleading guilty to laundering the proceeds of crime derived from running an organized prostitution service disguised as an escort service at a tribal casino.
Cheryl Larson pleaded guilty to prostitution, money laundering and possession of illegal drugs. The so-called "escort services" were advertised on the Internet under various names such as 'Gents For Rent', 'A Extra Help', 'AA Always Available', and 'Cheryl's Class.'
The business did not provide escort services, rather it provided prostitutes who met customers at hotels around Washington. The operation was run from a business office and a casino in the area. Larson met the prostitutes at the casinos to give them instructions on their next "date" and to collect from them the cash after each encounter with a client. The escorts, or prostitutes in this case, were given a cut of the proceeds of crime from Ms. Larson at the casinos.
Ms. Larson is also believed to have marketed the prostitutes at the casino to gamblers and was caught on video surveillance apparently pimping them out with various photos that she passed around to entice potential clients. In order to camouflage the proceeds of crime, Larson routinely and systematically gambled at local casinos. While there, she engaged in minimal play at slot machines and cashed out.
She washed approximately US$3 million in cash from the prostitution activities at one casinos over a 4 year period.
Posted at 12:33 PM in Financial Crime, Gambling & Crime, Gambling & Money Laundering, Gambling Business, Gambling Charges, Gambling News, Gambling U.S.A. | Permalink | Comments (0)