Today people got a shock when trying to play at their favorite poker sites. Instead of getting the homepage for the poker room, players were greeted with an FBI warning, telling them that the domain had been seized pursuant to an arrest warrant obtained by the United States Attorney’s Office.

The warning from the FBI laughingly points out that being involved in an “illegal gambling business” is a federal crime. That’s true, but being involved in any type of illegal business is a crime. Online poker, however, is not a crime in and of itself.

Initially, some thought that the so-called seizures were a hoax by some hacker, but soon thereafter, the Department of Justice issued a press release concerning a recently unsealed indictment. The press release states that eleven people have been indicted, including the founders of the three largest online poker sites doing business in the U.S., Full Tilt Poker, PokerStars and Absolute Poker.

In addition to the indictments, the United States filed a “civil money laundering and in rem forfeiture complaint against the poker companies, their assets, and the assets of several payment processors.” In other words, the government wants to seize the assets of the poker companies and anyone who processed payments for them. The Justice Department also issued restraining orders against more than 75 bank accounts that were used by the poker rooms and the payment processors. They also confiscated five domain names.

There are nine charges that the defendants are facing, including conspiracy to violate UIGEA, operation of an illegal gambling business, conspiracy to commit bank fraud and wire fraud, and money laundering conspiracy.

In short, the government is saying that the poker website operators and payment processors conspired to trick banks into processing payments for online gambling. They allegedly tricked the banks by laundering the money through fake Internet businesses. In other cases, the allegedly bribed the banks in order to gain their cooperation.

All of this comes shortly after Australian entrepreneur/slimeball Daniel Tzvetkoff was released from jail on bail after a secret meeting with prosecutors. Tzvetkoff founded Intabill, an online payment processor that worked closely with the very poker websites currently under indictment. After he supposedly ripped them off, the companies sued him. Unable to recoup their money, they alerted the FBI to his presence in the United States, which resulted in him being arrested and charged with various money laundering and fraud crimes.

As a man with inside knowledge into the payment processes of these poker sites, he had a lot of leverage. With him now released on bail, having previously been denied bail due to being a flight risk, and these eleven people being indicted, it seems that Tzvetkoff cooperated and turned over these “bigger fish” to the authorities.

Tags: Department of Justice, online poker, PokerStars, seized domain names