Online Poker Executive Pleads Guilty in Manhattan Federal Court to Money Laundering, Bank Fraud, and Internet Gambling Offenses
|U.S. Attorney’s Office September 19, 2012|
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that Nelson Burtnick, who previously served as director of payments for Pokerstars and Full Tilt Poker, pled guilty in Manhattan federal court to conspiracy to commit unlawful Internet gambling, bank fraud, money laundering, and gambling offenses in connection with a scheme to deceive banks into processing hundreds of millions of dollars of Internet gambling transactions. Burtnick, a Canadian citizen and resident of Ireland, pled guilty before U.S. Magistrate Judge Gabriel W. Gorenstein.
According to the superseding information filed today in Manhattan federal court, the superseding indictments unsealed on April 15, 2011 and July 2, 2012, other documents previously filed in the case, and statements made at court proceedings:
In late 2006, Congress enacted the Unlawful Internet Gambling Enforcement Act (UIGEA), making it a crime to “knowingly accept” most forms of payment “in connection with the participation of another person in unlawful Internet gambling.” Following the passage of the UIGEA, leading Internet gambling businesses withdrew from the United States market. However, Pokerstars, Full Tilt Poker, and another company, Absolute Poker (the “poker companies”) did not, and they became the top three Internet poker operators continuing to do business in the U.S. Because U.S. banks were largely unwilling to process payments for Internet gambling because it is an illegal activity, Internet gambling companies turned to third-party payment processors who were willing to disguise the payments so they would appear to be unrelated to Internet gambling.
Burtnick worked first for Pokerstars, where he rose to become director of payments, and then for Full Tilt Poker, where he also worked as director of payments. In these capacities, Burtnick had close working relationships with the leaders and senior executives of both companies. From December 2006 through April 15, 2011, the date when the U.S. operations of Pokerstars and Full Tilt Poker were shut down, Burtnick worked with third-party payment processors and other executives at the poker companies to deceive banks into unknowingly processing financial transactions for the poker companies.
Burtnick, 41, pled guilty to one count of conspiracy to accept funds in connection with unlawful Internet gambling, commit bank fraud, and commit money laundering; and two counts of accepting funds in connection with unlawful Internet gambling. He faces a maximum sentence of 15 years in prison. He will be sentenced by U.S. District Judge Lewis A. Kaplan.
Six additional defendants initially charged in the April 15, 2011 superseding indictment have appeared in the United States to date: Brent Beckley, Ira Rubin, John Campos, Bradley Franzen, Chad Elie, and Ray Bitar. Beckley pled guilty in December 2011 and was sentenced to 14 months in prison in July 2012. Rubin pled guilty in January 2012, and was sentenced to 36 months in prison in July 2012. Campos pled guilty in March 2012 and was sentenced to three months in prison in June 2012. Elie pled guilty in March 2012 and is due to be sentenced on October 3, 2012. Franzen pled guilty in May 2011 and also awaits sentencing.
Charges against Bitar are pending. The accusations against him are merely allegations, and he is presumed innocent unless and until proven guilty.
Mr. Bharara thanked the Federal Bureau of Investigation for its outstanding work in the investigation, which he noted is ongoing. Mr. Bharara also thanked the New York and New Jersey offices of the Immigration and Customs Enforcement’s Homeland Security Investigations for their continued assistance in the investigation.
This matter is being handled by the Office’s Complex Frauds Unit. Assistant U.S. Attorneys Arlo Devlin-Brown, Niketh Velamoor, Andrew Goldstein, and Nicole Friedlander are in charge of the criminal case, and Assistant U.S. Attorneys Sharon Cohen Levin, Jason Cowley, and Michael Lockard are in charge of related civil money laundering and forfeiture actions.