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Another Conviction In Online Gambling Transaction Processing Case

The US Department of Justice indicted ten people last April on charges ranging from fraud to money laundering, in connection with online gambling processing transactions. Today, the DoJ received their third conviction relating to the case when Ira Rubin pleaded guilty to money laundering, fraud, and other gambling offenses.

Rubin was one of ten people who were indicted in the first major crackdown of the online gambling industry since the Unlawful Internet Gambling Enforcement Act of 2006. The law made it illegal for financial institutions to process payments to and from online gambling sites. The accused were believed to have deceived banks into processing the gaming transactions.

"Because US banks were largely unwilling to process Internet gambling payments, companies turned to third party payment processors, including Rubin, who were willing to disguise the payments so they would appear to be unrelated to Internet gambling," said US Attorney Preet Bharara in a statement released after the announcement of the Rubin conviction.

Rubin admitted in his guilty plea to aiding online gambling sites disguise their payments to US customers. Included in the companies he assisted were popular online sites PokerStars, Full Tilt Poker, and Absolute Poker. The three sites all have officials that were indicted along with Rubin and the other defendants.

Rubin was living in Costa Rica at the time when he was altering the payments. When the indictment came down in April, Rubin was still out of the country. In late April, Rubin was found and detained in Guatemala. Authorities then transported Rubin to the US, where he was arrested and booked with the crimes. The guilty conviction that Rubin entered today comes with a maximum sentence of 55 years. His sentencing is May 17th.

The companies involved with the indictment last year have worked with the Department of Justice in an attempt to return funds that American players had in their accounts at the time of the crackdown. PokerStars has already refunded many players, while Full Tilt is in the process of being sold to European investors. The investors have plans on allowing US customers to submit their refund request to the DoJ.

Over the past year, much has changed within the US online gambling industry. Several states have passed laws regulating online poker, and the DoJ has released an opinion that reverses the government stance on illegal online gambling. In the opinion, the DoJ claimed that only sports betting was illegal under the 1961 Wire act, leaving the possibility that states may now craft online gambling regulations for poker, blackjack, and other popular casino games.

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