Payment processor Account Services has filed a motion for the return of property after funds were seized by the U.S. Attorney’s Office for the Southern District of New York. The company requests the “release and return of funds” totaling $13 million.
The funds in question were held in account 7986104185 at a Wells Fargo branch in Escondido, California. Account Services also seeks the return of $1 million held in accounts 353000248 and 353000256 at a Union Bank branch in San Diego. The suit notes, “The Wells Fargo funds were seized pursuant to a warrant, whereas the Union Bank funds were seized without a warrant in the Southern District of California.” The Southern District of New York seized the money back in early June as part of a larger effort that affected over 24,000 online poker players.
Interactive Media Entertainment and Gaming Association (iMEGA) Chairman Joe Brennan told Poker News Daily what the result of the motion may be: “It’s going to force the Government to come forward and justify why they seized funds destined for players. There’s no underlying crime here on the part of the players. The Unlawful Internet Gambling Enforcement Act (UIGEA) didn’t make it illegal to bet online. I would want to know why the Justice Department would target the funds since the players don’t seem to be at fault.” The financial services industry in the United States has until December 1st to fall in line with the regulations of the UIGEA, which were approved as midnight rules in November by the outgoing Bush Administration.
The warrant for seizure of the Union Bank funds was filed on June 24th. It called for the “seizure of the contents… and to refuse the withdrawal of any amount from said accounts by anyone other that duly authorized law enforcement agents.” According to Account Services, the warrant was issued a full 12 days after the seizure actually took place and its affidavit remains sealed. Industry news site Gambling911 recently filed suit to open the warrant and affidavit. The money seized from Account Services by the Southern District belonged to 13,800 online poker players with the same number of checks outstanding. Brennan noted that the payment processor likely only handled online poker transactions.
Account Services asserts that violations of the Illegal Gambling Business Act are to blame. In an update issued by the Poker Players Alliance (PPA) last month, the organization noted that the Wire Act was also potentially cited as justification for the seizure. Account Services’ motion explains, “The government acted with callous disregard for the movant’s constitutional rights when it unreasonably and unlawfully seized the funds from ASC’s Wells Fargo and Union Bank accounts.” It cites violations of the Fourth Amendment of the United States Constitution and notes that it is not in breach of the Illegal Gambling Business Act because it is not conducting a gambling operation. Even if it is, “online poker is not an illegal gambling business.”
The PPA has successfully proven that poker is a game predominated by skill in courtrooms around the country. Judges from Colorado to South Carolina have come to the same conclusion, in part due to a study by Cigital and PokerStars which concluded that three-quarters of 100 million cash game hands on the world’s largest online poker site did not go to showdown. In essence, a player’s skill of betting and bluffing earned them a pot prior to showdown. Similarly, Account Services’ motion concludes, “Poker is not gambling under the [Illegal Gambling Business Act’s] definition of the term because poker is a game of skill.” The motion quotes the Cigital study, which was authored by Paco Hope.
Account Services also claims that it will suffer “irreparable injury” if the funds are not returned. It adds that the company has “an interest in and a need for return of the money,” has “adequate remedy at law,” and the “retention of funds” by the U.S. Government is unreasonable. Attorneys Michael Pancer and L. Barrett Boss sign the document. Stay tuned to Poker News Daily for the latest from the online poker funds seizure.
