Court Punts in Denying Poker Defendants’ Motion to Dismiss Indictment

Published On February 10, 2012 | By Bart Huff | Uncategorized
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On Tuesday, the judge presiding over the unprecedented criminal poker case in the Southern District of New York denied, as he suggested he would (see here for coverage of the oral argument on the motion), the motion to dismiss the charges against John Campos and Chad Elie. The men face charges under the Unlawful Internet Gambling Enforcement Act (UIGEA), the Illegal Gambling Business Act (IGBA), money laundering and operating an illegal gambling business.

In their motion to dismiss, Campos and Elie argued that UIGEA’s express exemption for “financial transaction provider[s]” relieves them of any possible criminal liability.  As he did throughout his opinion, the judge stated that the indictment sufficiently alleged that the defendants were engaged in activities prohibited by the statute and that the defendants current argument is really nothing more than a factual disagreement with the government’s evidence – a resolution of which cannot be determined short of trial.  The judge wrote:

The indictment charges that both of these defendants were ‘persons engaged in the business of betting and wagering.’ The evidence at trial perhaps will not permit a conclusion that these defendants did anything more than provide financial transactions. Even if the evidence permits a conclusion that their activities were broader, it may not warrant a finding that they were anything other than financial transaction providers within the meaning of the statute. But such a determination would be inappropriate at this stage because the government has yet to present all of its evidence.

The court also noted that another provision of the UIGEA provides limited circumstances in which a “financial transaction provider” can be liable, and that the allegations in the indictment do not foreclose a finding that Campos and Elie fall in those limited circumstances.

The judge also denied the dismissal of the IGBA charges based on the defendants claims that the activities on the poker sites took place outside the jurisdiction of the United States. Once again, the court stated that the “appropriate time” to determine if the government can prove that the gambling occurred inside the State of New York “is not sooner than the close of all the proof at trial.”

The court’s ruling (or lack thereof) on these issues makes all the more important the likely fight over appropriately instructing the jury on the law. And because the court would not bite on ruling in advance the exact scope of UIGEA and IGB, it would behoove the defendants to ask the court to require the jury to make very specific factual findings, rather than a general verdict.

Perhaps the most disheartening portion of the judge’s opinion for the defendants was that, even after reading the defendants’ briefs, in which they set forth some of the arguments as to why online tournament-style poker is not gambling, he nevertheless characterized the argument as “surprising.” Looks like, at least with the court, the defendants still have a lot of educating to do.

Campos and Elie are scheduled to stand trial on March 12, 2012.

About The Author

Bart's practice focuses on representing clients on many areas related to online content and services, including criminal and internal investigations, internet privacy and security litigation, theft of trade secrets, compliance obligations relating to the use and disclosure of customer and subscriber information, and gaming law. Before ZwillGen, Bart was an AUSA in Chicago, prosecuting federal crimes including white collar fraud, securities and other regulatory violations, and computer and internet related crimes. Bart tried 18 jury trials and briefed and argued numerous appeals before the Seventh Circuit.