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In an effort to help as you huddle round the derelict burning oil barrel, let’s survey the post-apocalyptic wasteland as it stands right now.

Yesterday the United States Department of Justice moved to indict the four largest online poker companies who offer their services to customers in America: PokerStars, Full Tilt, UB, and Absolute Poker.

Named in the indictment were key decision makers at those companies:

Isai Scheinberg (PokerStars)
Paul Tate (PokerStars)

Raymond Bitar (Full Tilt Poker)
Nelson Burtnick (Full Tilt Poker)

Scott Tom (Absolute Poker)
Brent Beckely (Absolute Poker)

Also indicted are people who run payment processors used by the above sites:

Ryan Lang
Ira Rubin
Bradley Franzen
Chad Elie
John Campos

It has been reported that both Elie and Campos have been arrested. The remainder are expected for arraignment or not currently in the U.S.A.

They have all been accused of conspiracy to violate the UIGEA. This is relatively old news, as it’s been clear to everyone since 2006 that they were in violation of that law. What prompted the DoJ to move now is the introduction of new evidence that implicates all parties in bank fraud and money laundering.

The FBI claim to have uncovered evidence that these poker companies were using dummy companies to deceptively funnel money in and out of their sites. Following the introduction of the UIGEA, banks began slowly to block payments that were known to be from online gambling companies. By December 2009 it had become mandatory for banks to check the providence of new and existing customers to ensure accepting their business would not place them in violation of the UIGEA.

To circumvent this issue, the FBI alleges the online poker sites created “phoney” companies, including a fake dog food website, which were used to take money to and from poker accounts without arousing the bank’s suspicion. If found guilty of all charges, the defendants face massive fines and up to 85 years in prison.

Although many speculate that the DoJ has been building their case for the past five years, what spurred them into action appears to have been the arrest of Daniel Tzvetkoff in April last year. An Australian citizen, it is being reported in his native media that he had concocted schemes that the online poker sites were using to surreptitiously move money. Having been arrested while in the United States he was deemed a flight risk and denied bail.

However, in August 2010 he was suddenly granted bail after what one press outlet have referred to as a “secret” meeting with prosecutors. It is speculated that he may have provided the DoJ with the evidence in return for lenient treatment.

The reaction from Full Tilt and PokerStars has been to shut off all real money play to United States customers. Both sites claim that users in other countries should be able to proceed as normal, but international players have reported problems accessing the sites, with Full Tilt in particular facing issues.

Both PokerStars.com and FullTiltPoker.com now display messages from the FBI, but these can be circumvented by navigating to PokerStars.eu and FullTiltPoker.co.uk.

Smaller poker sites that serve the U.S., such as Bodog are continuing to operate as normal at this time.

Mass withdrawals from PokerStars and Full Tilt have ensued, although many players around the world are reporting problems processing their transactions. Those that are having their withdrawals confirmed are being asked to wait at least 24 hours for the money to reach their accounts.

Full Tilt Poker released a defiant statement, in which Ray Bitar expressed “disappointment” at the indictment, before adding, “I look forward to Mr. Burtnick’s and my exoneration.”

PokerStars were less combative, but took steps alongside Full Tilt to ensure customers that their money was safe and would be returned to them at a later date. It has been noted by a few intrepid forumites that PokerStars’ license with the Isle of Man (where they are based) requires that they keep an amount equivalent to all player funds held in trust. However it is unclear how quickly they would be able to access this money.

Very recently, some PokerStars customers in the UK have received support emails reassuring them that their requested withdrawals are processing as normal. Link here.

The FBI also announced that restraining orders on 75 bank accounts connected to the online poker sites have been issued. It is expected that this will restrict their cash flow in the short term.

We will keep you updated with any further developments as they become known.