Payment Processor Files Against U.S. for Return of Seized Online Poker Funds

San Diego-based Account Services Corporation, one of several online payment processors servicing U.S. players, has asked a federal judge to order the return of approximately $14 million it believes was improperly seized by authorities from the U.S. Department of Justice’s Southern District of New York (SDNY). Account Services was one of several payment processors targeted by the DoJ, with approximately $40 million – largely consisting of payments of winnings and returned deposits – being seized in early June.

The July 10th motion, filed by the offices of San Diego attorney Michael Panzer in the United States District Court of Southern California, involves two bank accounts used in the processing of online-poker payments. The larger of the two, an account at a Wells Fargo Bank in California, had approximately $13 million seized, while an additional $1 million was taken from two accounts at San Diego-based Union Bank. The Wells Fargo bank was served with a warrant, while the Union Bank was served with a “warrantless seizure,” according to the motion, although one was supplied roughly two weeks later.

13,800 online players were affected in the short term by the seizures at the Account Services Corp. banks alone, though the online-poker sites – including industry giants PokerStars and Full Tilt – quickly made good on the seized funds for their customers, pending the eventual legal resolution of the matter.

Among the arguments raised by Accounts Services:

• The seizures appear to have been made under a statute of the 1970 Illegal Gambling Business Act, though Accont Services alleges that the act is inapplicable to the seizures, and that “ASC’s corporate activities do not violate the IGBA”;

• The DoJ’s Southern District of New York office “acted with callous disregard for the [aggrieved parties’] constitutional rights;

• The majority of the funds seized belonged to individual poker players themselves, who could not, according the statute involved, have violated the law;

• “Online poker is not illegal gambling.” The motion specifically declares that online poker, with its elements of skill, is not illegal gambling, and noted that the statute believed to have been used for the seizure includes this definition of gambling: including “pool-selling, bookmaking, illegal slot machines, roulette wheels or dice tables, and conducting lotteries, policy, bolita or numbers games, or selling chances therein”;

A large percentage of the 40-page motion outlines clear arguments for why poker should be treated legally as a game of skill, from defining the strategic parlance of the game to distinguishing the semantics of why words such as “bet” differ in meaning within poker as compared to the forms of gambling outlawed under the IGBA. The million-member strong Poker Players Alliance also issued a statement on Friday praising the motion. From the PPA statement:

“On behalf of the players whose money was seized by the government, the PPA is pleased that Account Services took this step of filing its motion and contesting the seizure. We fully endorse the arguments that Account Services has included in their filing that online poker is a game of skill and not the type of illegal gambling activity that is prohibited by Federal Law.

“The PPA will likely seek to get involved in this action to ensure that the voice of U.S. poker players are heard and their freedom to play the skill game of online poker is preserved – without the threat of the government seizing their money.