Scott Tom, founder and co-owner of Costa Rica-based Absolute Poker, arrived in the U.S. from Barbados Thursday to face money laundering and UIGEA charges. Scott, a resident of Antigua, pleaded not guilty to the charges in federal court and was released on half a million dollar bond.
Reports indicate that a plea agreement could be reached soon on the charges stemming from the U.S. Department of Justice’s “Black Friday” crackdown on April 15, 2011 – an event that changed the face of U.S. online poker. Targeted in the action were Full Tilt Poker, Absolute Poker and PokerStars while ten others were indicted along with Tom.
In 2006 Congress created a law against unlawful internet gambling that focused on the transfer of money into and out of gambling establishments. The law was largely toothless outside of its influence on and policy directives to financial institutions. But red tape and restrictions placed on money processors forced poker and casino companies to go outside the regular channels of moving money, resulting in illegal transactions.
Sports betting sites and their operators are the only gambling providers to ever be charged in the U.S. under the Wire Act of 1961. No convictions have ever resulted by offering online casino or poker games from offshore. The Obama administration issued a policy statement in line with previously established case law on December 23, 2011, stating that the Act applied only to sports betting. However, the way money was “discretely” processed and transferred may have violated money laundering laws.
Prosecutors contend that the big 3 companies deceived banks by moving billions of dollars through shell companies with transactions that were not coded as “gambling”, but appeared to be for “legitimate” transactions.
Before the Black Friday hammer and cloud fell on the U.S. poker industry, Absolute Poker was in the #3 position and, and according to prosecutors had taken in about half a billion dollars from U.S. players. Absolute Poker may have continued to accept players from the U.S. after Black Friday.
Absolute Poker payment processor, Brent Heckly, is Tom’s step brother. He pleaded guilty to financial charges in 2012 and was sentenced to 14 months in federal prison. A civil complaint filed along with the indictments in 2011 sought $3 billion in asset forfeitures from the indicted persons and their respective companies.