Murky Revelations in Tzvetkoff Arrest
Australian payment processor Daniel Tzvetkoff was arrested on Saturday April 17 from Las Vegas, where he was attending an Internet billing conference. The arrest followed an indictment on Friday in which Tzvetkoff was charged with gambling conspiracy, bank fraud conspiracy, money laundering conspiracy and money laundering in the Southern District of New York. The Attorney for the Southern District of New York has made similar charges before for amounts far greater than involved in this case and has then seized bank accounts of the payments processors involved. Yet the case of Tzvetkoff has certain unusual features. It is for the first time the UIGEA has been cited in a case of this nature and there are reports that certain online poker rooms are behind the arrest of Tzvetkoff.
This is the first criminal case in the history of the United States that involves the UIGEA and it raises some questions. Why was the UIGEA cited when the UIGEA rules are not yet in effect? The UIGEA rules that were to become effective in December 2009 have been held in abeyance till June 2010. Will this have a bearing on the legality of the case when it comes to the courts? What signals does it give out to the online poker industry?
The second issue is even more confusing. The Courier-Mail of Australia reports “Disgruntled online poker houses that were owed tens of millions of dollars by internet tycoon Daniel Tzvetkoff turned him in to US authorities, it is believed.” Poker Stars, Full Tilt Poker and Absolute Poker are the poker rooms who have been duped of $30 million by Tzvetkoff. So far there is no confirmation that the poker rooms were behind the arrest, only the reports of the Australian news agency. And it does seem odd that the poker rooms would lay themselves open to prosecution because after all their activities are being held illegal by the US authorities. And they are bound to be dragged into the murky waters because Tzvetkoff was processing funds for them.
There however could be another angle to the case. It is known that the Department of Justice has a dossier ready on Full Tilt Poker and is waiting for the UIGEA rules to go into effect before making a move. Could the Tzvetkoff case be indicative of some behind the scenes quid pro quo?
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