First Guilty Plea in Online Poker Indictments Comes on the Heels of a New Unsealed Indictment in Maryland
On May 23, 2011 Bradley Franzen changed his plea from not guilty to guilty in the Southern District of New York. Franzen pled guilty to charges outlined in a superseding information filed against him the same day. The information charges Franzen with Bank Fraud and violations of the Unlawful Internet Gambling Enforcement Act (“UIGEA”). The information also details Franzen’s alleged efforts to disguise the nature of online poker payments using websites purportedly associated with environmentally friendly products and online marketing. Franzen’s sentencing hearing is currently scheduled for August 26, 2011.
Three days prior to Franzen’s change in plea, on May 20, 2011, the Department of Justice in the District of Maryland seized 11 bank accounts and 10 domain names associated with online gambling sites. The seizures and indictments were part of a two year long sting, during which investigators set up a payment-processing business known as Linwood Payment Solutions. Linwood then contracted with online gambling sites and obtained evidence via direct contact with principals of the online gaming sites.
The seized sites include bookmaker.com, 2Betsdi.com, Funtimebingo.com, Goldenarchcasino.com, Truepoker.com, Betmaker.com, Betgrandesports.com, Doylesroom.com, Betehorse.com, and Beted.com. While the affidavit in support of the seizure refers to UIGEA, it only states that the bank account seizures were to recover the proceeds of an illegal gambling business (18 U.S.C. 1955) and that the proceeds were involved in money laundering transactions (18 U.S.C. 1956). Likewise, the domain names were seized as property allegedly used in violation of 18 U.S.C. 1955.
The same day the DOJ also unsealed two indictments against companies and individuals involved in processing payments for the seized domains. The indictments charged ThrillX Systems, Ltd., d/b/a BetEd; Darren Wright and David Parchomchuk, both of British Columbia, Canada and K23 Group Financial Services, d/b/a BMX Entertainment; and Ann Marie Puig, age 35, of San Jose, Costa Rica. Unlike the cases pending in the Southern District of New York, these cases focus on sites offering sports betting. The indictments allege violations of the Illegal Gambling Business Act (18 U.S.C. 1955) based on violations of Maryland law and Money Laundering (18 U.S.C. 1956), and do not include charges under UIGEA.