Calvin Ayre/Bodog Have $24M in Funds Seized by US Government

pokeraddict

Webmaster
Other Bodog assets seized. One of the processors was also a part of another poker room's bad check problems because they got seized too.

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The U.S. government recently seized $24 million from bank accounts linked to Bodog, the giant, illegal-under-U.S.-law Internet gaming operation founded by Canadian tycoon Calvin Ayre.

Federal filings make very clear that a serious criminal investigation of the Bodog enterprise is ongoing. At a minimum, word of the seizures is likely to rattle the confidence of U.S.-based online gamblers that they will receive their winnings, not only from Bodog but from the industry's other remaining participants.

Detailed in court filings in a Baltimore federal court, the Bodog-related seizures from such well-known institutions as Wachovia (nyse: WB - news - people ), Bank of America (nyse: BAC - news - people ), SunTrust Banks (nyse: STI - news - people ) and Regions Bank, a unit of Regions Financial (nyse: RF - news - people ), increase the possibility of criminal action against Ayre himself. There already has been published speculation in his native Canada that he is under secret indictment somewhere in the U.S.

The U.S. attorney's office in Baltimore, which launched the two lawsuits to take the $24 million, did not respond to a request for comment.

The flamboyant Ayre--media reports often call him a "playboy"--is now believed to be in Antigua and Barbuda, a country in the eastern Caribbean. He has denied being on the lam. A request on Wednesday for comment from Ayre, sent through the Web site of his Antigua-based Calvin Ayre Foundation, was not immediately returned. Nor were call and e-mail messages sent to public relations contacts listed on Bodog's Web site.

In early 2006 Ayre rocketed to international prominence--and the cover of Forbes magazine' annual issue on the world's billionaires--for his stewardship from Costa Rica of Bodog Entertainment Group and his open flouting of authorities in the U.S., his major market. The story headline: "Catch Me If You Can." The operation was said at the time to be handling $7.3 billion yearly in poker, casino and sports event wagers.

But since then, Ayre has been the subject of law-enforcement raids abroad and growing regulatory scrutiny, especially in the U.S. In late 2006 President Bush signed a law strengthening the prohibition on online gambling. Ayre fell off the Forbes worldwide billionaires list after just one year, amid a decline in his industry's fortunes.

In overall actions against the industry, federal prosecutors in New York have charged executives of Neteller with illegally processing online gaming transactions. This summer, Canada's ESI Entertainment Systems, an Internet payment business, entered into a "deferred prosecution agreement" with the same prosecutors. The company admitted to criminal wrongdoing and agreed to disgorge $9.1 million in criminal proceeds for its role in processing $2 billion in Internet gambling payments for hundreds of thousands of U.S. customers. Criminal cases have been started against various online gambling shops.

Ayre has been trying to put legal distance between himself and the operation he founded in the 1990s. For years its business was run through Internet servers belonging to Mohawk Internet Technologies, located on the Kahnawake Reserve Indian reservation in Quebec, Canada. In September 2007 Bodog said its North American operations would be licensed to Morris Mohawk Group, also located on the reservation and run by tribal chief Alwyn Morris.

Three months ago, Ayre, now 47, said he had transferred ownership of Bodog itself to Morris Mohawk Group. "It's true; I'm packing it in," Ayre wrote on a Web site.

Court filings in Maryland say that in January and February a total of $14.2 million was seized from accounts in the name of JBL Services and Transaction Solutions at Wachovia, Regions Bank, Bank of America and Sun Trust Bank. In July, filings say, another $9.9 million was found in eight accounts at Nevada State Bank, a unit of Zion Bancorporation (nasdaq: ZION - news - people ), in the name of Zaftig Instantly Processed Payments, doing business as ZipPayments.com. The companies are described as helping to facilitate parts of the Bodog operation.

The court papers detail an elaborate international structure put together to allow Bodog to collect money and write checks to winning gamblers in the U.S. One affidavit by Randall S. Carrow, a special agent with the U.S. Internal Revenue Service's Criminal Investigation Division, said that $248 million involving entities linked to Bodog was processed through Wachovia Bank, from which $11 million of the $24 million was seized.

In a statement to Forbes, Wachovia said the bank cooperated with law enforcement, doesn't knowingly allow Internet gaming operations to open accounts, and the funds ending up at the bank were in accounts of a third-party credit card servicer. The statement also hinted that various accounts might have been kept open at the request of investigators to aid their efforts.

According to Carrow's detailed sworn statements, the IRS's Criminal Investigation Division started looking at Bodog in 2003 and opened a formal probe in 2006. The extensive sleuthing has involved close examination of public and bank records, the enlisting of unnamed cooperating witnesses and informants, and undercover efforts to make bets on football and collect winnings.

Ayre, says Carrow's statement, is president of Middleton Financial, a Nevada corporation described as a key cog in the U.S. Bodog machinery, as well as Stratham Finance, said to be based in Malta. Other entities linked to Ayre in the court filings are Gateway Financial Services, EBanx Ltd., Gregor Financial Ltd. and Calvtek Industries. The filings list dozens of businesses involved in processing Bodog transactions.

The ongoing federal pressure to disrupt Bodog's financial transactions may be bearing fruit. Carrow's affidavits say several checks issued from Bodog to its undercover gambler bounced.

A break in the inquiry came in May, one of Carrow's affidavits says, when an undercover operative for "another state's gambling commission" received a check that didn't bounce from an account at Nevada State Bank, which is headquartered in Las Vegas. That led to the $9.9 million seizure this month. The bank had no immediate comment.

Carrow's affidavits were filed in connection with the U.S.'s successful efforts to get a federal judge to authorize the seizures. But to keep the money permanently, federal prosecutors must file a civil lawsuit and allow a challenge by anyone with a claimed interest. No one fought the $14.2 million seizure, and it was ordered forfeited to the feds. The lawsuit over the $9.9 million--its official name is United States of America v. $9,869,283.05--was just filed.

Even before the advent of Bodog, Ayre carried considerable baggage. Close family members were convicted of drug trafficking. (Ayer himself was never charged.) In 1996 Ayre was banned for 20 years from the British Columbia securities industry for stock market offenses. By that time, he was already moving into online gaming.

"One of the things that drives me is the excitement that I could fail," he told Forbes in 2006. "What better buzz can you get?"
 

pokeraddict

Webmaster
This check processor Zip Payments that got seized has also been linked to Full Tilt and Jazette (Sportsbook.com and friends). It is certainly possible that several other gambling sites got stuck there too.
 

jetset

RIP Brian
CAG
Zip Payments surfacing yet again, although this will probably see them out of the business. Despite his protestations that he has retired I suspect that Ayre must be a very worried man right now.

Strange that Fortune hasn't picked up on the patent issues Bodog faced, but then again that front has gone very quiet recently, and you have to wonder whether there has been a back door settlement.

I found this passage especially interesting:

"Ayre, says Carrow's statement, is president of Middleton Financial, a Nevada corporation described as a key cog in the U.S. Bodog machinery, as well as Stratham Finance, said to be based in Malta. Other entities linked to Ayre in the court filings are Gateway Financial Services, EBanx Ltd., Gregor Financial Ltd. and Calvtek Industries. The filings list dozens of businesses involved in processing Bodog transactions."
 

NASHVEGAS

Banned User - flamming, disrespecting admin,
Despite his protestations that he has retired I suspect that Ayre must be a very worried man right now.
He was target Number 1 from Day 1. Even as time marched on and I was somewhat silenced from posting about Calvin (as I assume one reason was that two banned members were involved in several of the threads and I was asked not to give one of the banned members a voice, the request made sense and I respected it). Off the record I suspected even as time marched on since the Neteller arrrests and a few lesser publicized arrests thereafter that he was always target Number UNO (an ex member who oped out of this forum heard this often from moi) and despite the deafening silence and then a couple posts that Calvin claimed it was no problem entering the US, he may have entered (I doubt it) and even if so of course nothing is ever a problem to the narcisstic.

I also give Kudos to Rollo and iirc, Mousey who got the picture. Amazing that US gamblers may not understand the actual significance of this breaking story. The industry, well as I said, nothing is ever a problem to the narcisstic. Wanna Bet???.LOL;)
 

bb28

Meister Member
This is the biggest news related to online gambling since the passage of the UIGEA and will have very far reaching effects........imo. :)

I found this story which is an interview with Calvin himself. It's recent but was written before this news.
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RobWin

closed account
It's already had far reaching effects, most likely a hell of a lot more than we actually know about and the banks involved so far Wachovia, Bank of America, SunTrust Banks and Regions Bank are most likely just some of the few larger ones that they are willing to mention right now. I'm sure they are scanning everyone's account automatically for any and all transactions that involve any of the named processors...;)
 

lots0

Banned User - troll posts - flaming
Well I hope Calvin uses some of those billions to hire a team of really great lawyers and trounce the justice dept.

Until there is a LEGAL definition of what "Illegal gambling" is in the USA, Don't count anything out yet...
 

Mousey

Ueber Meister Mouse
This check processor Zip Payments that got seized has also been linked to Full Tilt and Jazette (Sportsbook.com and friends). It is certainly possible that several other gambling sites got stuck there too.
There's several posts already on the board from players who got stuck with bad Zip checks from various (big) online casinos.

IMHO I don't think asking for a check is a very good idea right now.
 

NASHVEGAS

Banned User - flamming, disrespecting admin,
Well I hope Calvin uses some of those billions to hire a team of really great lawyers and trounce the justice dept.

Until there is a LEGAL definition of what "Illegal gambling" is in the USA, Don't count anything out yet...
There is a LEGAL definition of structuring and failure to report taxable income. Hell, I do not expect US players to worry about such trivial matters.:D:rolleyes::D
 

suzecat

Dormant account
There is a LEGAL definition of structuring and failure to report taxable income. Hell, I do not expect US players to worry about such trivial matters.:D:rolleyes::D
Well there is that UIGEA thing that pretty much spells out that US citizens CAN gamble............as long as they don't do it ONLINE with real $ :eek2:
 

dominique

Dormant account
UIGEA tells the BANKS that they are not to pass on money that is derived from ILLEGAL online gambling.

The wire act prohibits US citizens from betting on sports over the telephone.

Hence - illegal online gambling is sportsbetting.

These are the two laws on the books.

Individual states have a variety of laws, but the above is what's on the federal books.

You will note that with each case, Bodog, BOS, Neteller, you have a government official place a SPORTSBET to entrap the target.
 

pokeraddict

Webmaster
You will note that with each case, Bodog, BOS, Neteller, you have a government official place a SPORTSBET to entrap the target.
Correct and that gets forgotten about alot. If you recall even though Epassporte was asked politely to shut down they were not seized or arrested. There may be some "you don't want trouble do you?" fine later but to this point they have been left alone even though they openly operate and are located in the U.S.

The sportsbooks that take U.S. bets are going to be the easiest to make cases against. Jay Cohen at WSEX tried to establish the wire act didn't apply but he lost and went to jail. To this point sportsbetting is the only thing courts have ruled are illegal.
 

suzecat

Dormant account
UIGEA tells the BANKS that they are not to pass on money that is derived from ILLEGAL online gambling.

The wire act prohibits US citizens from betting on sports over the telephone.

Hence - illegal online gambling is sportsbetting.

These are the two laws on the books.

Individual states have a variety of laws, but the above is what's on the federal books.

You will note that with each case, Bodog, BOS, Neteller, you have a government official place a SPORTSBET to entrap the target.



THAT should be illegal! :mad:
 

dominique

Dormant account
From my mailbox:


Good afternoon,

An article was recently released on Forbes.com that creates several misimpression's that the Morris Mohawk Gaming Group feels compelled to clarify for our customers.

As most of our customers already know, all operators outsource payment processing functions to third parties and these payment processors are subject to regulatory constraints wherever they operate, and, occasionally in the US, are subject to legal action because of the uncertain legal environment there.

However, the seizure of funds from these US payment processors was mischaracterized in this article, which refers to two specific legal cases against US processors. Rightly or wrongly, the article does not make a clear distinction between these cases, which, as a result, paints a misleading picture.

The facts are these: the first of these cases relating to a seizure of funds from a processor known as JBL Services happened some time ago and has absolutely nothing to do with the current payment processing challenges being experienced in the US. The constraints being experienced by payment processors in the US are universal in that region and not specific to any particular processor or site. Also, note that not one single player failed to get paid when this processor was disrupted.

The second case refers to a payment processor known as Zippayments.com and seizure of funds from this processors bank accounts in Nevada. The article falsely implies but notably does not go so far as to state - that $9.9M seized from Zippayments Nevada bank accounts were funds on account for Bodog. This is simply false.

Processing partners with whom the Morris Mohawk Gaming Group does business are sophisticated organizations that are perfectly clear as to the actual facts of these cases and their contexts. They are unfazed by such media hype and Morris Mohawk wishes to ensure that its customers are similarly informed. Customer deposits are safe and every player has and will always be paid.

Alwyn Morris
C.E.O.
Morris Mohawk Gaming Group
 

Cool Hand Luke

Dormant account
US online gaming

Well now I wonder if this is the start of the end for all US players as far as casino and poker gaming goes.Now none of the US players will not get any of there winnings and probably lose the money from there accounts as well.But the good news is it sounds like Bodog is on its way down
 

dominique

Dormant account
According to the Mohawks it is just sensationalist and incorrect reporting and nothing more:

The facts are these: the first of these cases – relating to a seizure of funds from a processor known as JBL Services – happened some time ago and has absolutely nothing to do with the current payment processing challenges being experienced in the US. The constraints being experienced by payment processors in the US are universal in that region and not specific to any particular processor or site. Also, note that not one single player failed to get paid when this processor was disrupted.

The second case refers to a payment processor known as Zippayments.com and seizure of funds from this processor’s bank accounts in Nevada. The article falsely implies – but notably does not go so far as to state - that $9.9M seized from Zippayment’s Nevada bank accounts were funds on account for “Bodog”. This is simply false.
That makes the entire news incorrect and BS.
 

NASHVEGAS

Banned User - flamming, disrespecting admin,
From my mailbox:
With all due respect Dom as I realize in this case you are simply the messenger but I could not even complete the Morris response without Absolute Poker's responses coming to mind for whatever reason as well as Calvin's blog responses to the 1st Technology patent lawsuit coming to mind as well.....That said, I learned long ago the media often gets the story wrong.....Will try to find the legal pleadings!!
 
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pokeraddict

Webmaster
It would make sense that the 9.9 million could be what was taken from Zip. That amount could be the combined loss of all that were using that processor. Bodog could just be one of the bigger customers. Since Forbes printed it maybe they are figuring there is some value in naming Bodog after their story about Ayre earlier.
 

pokeraddict

Webmaster
After reading the actual complaints it seems this is entirely directed at Bodog, not other online gambling businesses. Bodog must be named 100 times in the complaint. The investigation dates back to 2006.
 

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