Friday, June 10, 2011
Processor pleads guilty in poker indictment
Bradley Franzen, President of a Costa Rican company that matched online poker companies with U.S. payment processors to illegally facilitate online poker payments, pleaded guilty May 23, 2011, to fraud, money laundering and illegal gambling. Franzen admitted to creating phony businesses processors could use to disguise online poker payments. Processing Internet gambling payments has been illegal in the United States since 2006.
Franzen, 41, is originally from Illinois. He faces up to 30 years in prison for his admitted crimes, but prosecutors agreed to recommend sentence leniency in return for Franzen's plea. No sentencing date has been set.
In his plea, Franzen admitted to participating in a scheme to deceive U.S. banks about the true nature of the transactions being processed. Instead of charges showing up on players' charge card statements as poker payments the payments were billed as charges to fake companies Franzen set up. For example, one of Franzen's companies fronting for gambling payments was Green2YourGreen. It falsely advertised that it sold environmentally friendly household goods. Franzen admitted three online poker companies, Full Tilt Poker, PokerStars and Absolute Poker, processed about $15.2 million through Green2YourGreen.
Companies will return money
Franzen told the court at his plea hearing his involvement in the processing scheme began when Full Tilt Poker came to him with a problem – the company was showing a $60 million loss because, while it continued to pay players who won, the company was unable to process transactions from U.S. players' accounts.
Charges remain pending against 11 other defendants and the three online poker companies.
Earlier in May the U.S. Attorney for the Southern District of New York signed agreements with the three poker companies to return any money they were holding belonging to U.S. online players. "All three of the companies that allegedly engaged in the operation of illegal internet gambling businesses, as well as massive wire fraud, bank fraud, and money laundering, are moving forward with the process of returning the funds they owe to their U.S. customers," U.S. Attorney Preet Bharara said.
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