US DoJ Going After Int'l Banks Now?


RIP Lisa
Oct 15, 2004
Toronto, Ontario - Canada
The Sunday Times
January 21, 2007

US gaming probe rocks top banks
Jenny Davey

THE US Department of Justice has ordered the worlds biggest investment banks, accountants and law firms to hand over all e-mails, telephone records and papers connected with internet gaming firms as part of an investigation into illegal online gambling in America.

HSBC, Dresdner Kleinwort, Credit Suisse and Deutsche Bank are known to be among the banks that have been issued with subpoenas official requests for information as part of a worldwide hunt to build a case against those who benefited from illegal online gambling.

Britain has been the fundraising centre for many internet gambling companies, with a number of international operators listing their shares in London.

Fortunes were made by the founders of internet gaming stocks, including Party Gaming, and, and advisers pocketed huge fees.

The Department of Justice first issued subpoenas in October, only days after George Bush sounded the death knell for Americas $6 billion (3.2 billion) internet gambling industry by signing legislation banning all related transactions. But until now the investigation has been kept secret.

According to City sources, the subpoenas have continued to arrive over the past few weeks.

It is thought that some investors in online gambling companies, including Party Gaming and, have also been hit with requests for information.

One source said: To say the situation is sensitive is the understatement of the decade. The problem is, even if you know you have done nothing wrong, you have no powers of resistance.

He added: You can quickly go from being a bystander to a target, so even if you are bomb- proof, you have to assume you are subject to hostility.

The source went on: The Department of Justice has taken a shotgun, not a rifle approach in relation to lots of gaming companies and has just asked everyone to hand over all the information they have.

The request could force banks and other advisers or former advisers to the gambling companies to hand over hundreds of thousands of e-mails and files to American investigators.

Another City source familiar with the circumstances said: There is no doubt at all that this situation is escalating. This has definitely got legs.

Another source described it as one of the biggest fishing expeditions ever undertaken by the Department of Justice.

Vast riches were made by the founders of internet gambling companies, including Party Gaming and Party Gaming floated with a value of 5 billion in the summer of 2005, propelling it straight into the FTSE 100 index ahead of British household names such as British Airways and ICI. Its four founder shareholders Anurag Dikshit, Vikrant Bhargava, Ruth Parasol and her husband, Russ DeLeon took out 797m and valued their remaining shares at about 3.3 billion. Meanwhile,, which floated in September 2005 valued at 590m, created another batch of dotcom millionaires, this time among the companys Israeli founders. Avi and Aharon Shaked received more than 10m from selling a quarter of their 70% stake.

The probe by the Department of Justice will spark outrage in Britain, coming so soon after the extradition of the so-called NatWest Three to America.

UK plc should be really worried about yet another encroachment of American investigators on to British territory. The City is clearly under threat, said one British businessman who asked not to be named.

The subpoenas do not reveal whom the Department of Justice is targeting. But some believe the ultimate goal is to find information incriminating the founders of the online gambling firms.

The inquiry vindicates the City professionals who refused to act for internet gambling firms because of the uncertainty about its legality in America. Banks that have been subpoenaed have lined up lawyers to act for them.

None of the banks involved would comment on the subpoenas. The Department of Justice also said that its policy was not to comment about ongoing investigations.

HSBC advised, one of the most high-profile internet gambling companies, on its flotation. Credit Suisse advised the original shareholders of on their strategic options before the flotation. Deutsche is co-broker to Party Gaming, while Dresdner advised on its public listing.

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I am now terrified of living in this country.

Is no one going to put their foot down and tell the USA to FUCK OFF?!?! Are all these companies and banks and casinos and entire freakin' COUNTRIES simply going to hand over records of entire corporations to the DOJ because some American might have bet on a damn ball game?? Do you folks in the UK really want the DOJ and FBI looking at YOUR transactions, too? It's none of their damned business!!!

I need a valium, and I need it bad. I kid you not. I am aghast, astounded and horrified.

They don't go after drug cartels with such vigor. Are they insane? Do we have another cross dressing paranoic in charge of the DOJ and FBI?
They don't go after drug cartels with such vigor. Are they insane?

Well said, but then again, there's little chance that a gaming company will shoot at them. :)

I do not see how this subpoena holds water anywhere outside the US. I also do not see how they can issue one to law firms when any communication with your attorney is privileged information.
Our government at work. :mad:
We as gamblers outnumber any special interest group that opposes gambling.
Please help us fight for your rights.

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for FREE.
With large numbers behind us we can fight for change, don't sit by while the government takes away your freedoms!
Well that sort of does it for me. I will go back to following politics and trying to save what little freedoms we have left.

Those who would give up essential liberty to purchase a little temporary safety deserve neither liberty nor safety. Benjamin Franklin
I am now terrified of living in this country.

Is no one going to put their foot down and tell the USA to FUCK OFF?!?! Are all these companies and banks and casinos and entire freakin' COUNTRIES simply going to hand over records of entire corporations to the DOJ because some American might have bet on a damn ball game?? Do you folks in the UK really want the DOJ and FBI looking at YOUR transactions, too? It's none of their damned business!!!

I need a valium, and I need it bad. I kid you not. I am aghast, astounded and horrified.

They don't go after drug cartels with such vigor. Are they insane? Do we have another cross dressing paranoic in charge of the DOJ and FBI?

Okay, now I know the Mouse is pissed....she said the "F" word. All kidding aside Mousey, my reaction was identical to yours when I read that article, identical. Someone said to me last night (think it was Winbig), that he'd bet George was turning in his grave, and he didn't mean Bush obviously..he meant Washington. How true.

And I agree, when is someone going to stand up to them and say "enough is enough", and this is bullshit.

I really have to wonder how many of the 300,000,000 (is that right?) people living in your country actually have any clue that this is going on? And that this is what taxpayers dollars are being spent on? Wouldn't and shouldn't they be outraged if they knew? Or as society as a whole become that apathetic that they just don't give a shit? Gambler or not, how can anyone think this is okay?

Sort of a sidenote. Those two Neteller (ex) founders that were arrested, are Canadian citizens. I've been giving some thought to trying to find out how the people in MY country feel about it, and the politicians. Or do we not give a shit either? I'd settle for making people aware of it, I just don't know how.
GW needs to take some lessons from the real GW.

George Washington.

I'm sure Washington and the other founders of the constitution are rolling in their graves right about now.

Maybe the British electorate will be so enraged that the US has the apparent freedom to look at the information stored in UK banks that they will finally insist that Bush's lapdog Blair rise up and bite his master (assuming Blair stays around long enough - our own police have been arresting top Labour party officials over a corruption allegation, peerages for sale!)
Any other country's government would be told to "F*** Off" by our banks and government, but not the US it seems:mad:
A while ago, the FBI ordered South Africa to arrest some old codger minding his own business on holiday. After being held in a South African jail for 6 MONTHS, the FBI said "oops, sorry - wrong guy, you can let him go now". Was he compensated - I doubt it!
While online gaming doesn't impress the UK majority, concern about who is allowed access to personal information is a MASSIVE ISSUE over here, triggered by the proposals for identity cards. If the subpoenas simply tell banks to give "everything" to the DoJ, most Brits will be enraged, whatever the purpose was said to be.
Give me Liberty or give me Death!

The US Federal Government has been taxing me to death for as long as I can remember.

We have no freedoms here in the US anymore.

We have the ILLUSION of freedom only because we beat our own drum constantly and SAY we are free.

If you say it long enough...and loud enough...the public will believe the lie.

After taxes (Federal, State, Local, Medicare, etc.), health insurance premiums, and the "Simple IRA" deductions my employer keeps in his own pocket instead of putting IN my "Simple" IRA account (US Labor Department, where ARE YOU?!), I take home about 50% of my salary.

Then the rest goes to food, (taxed at 8.9%) and the maga deductables on my crappy BC/BS benefits plan.

I have to pay for Auto Insurance or I'll be arrested for driving with it.

I have to buy a State Vehicle Tag once a year, or be arrested for driving without it....

I have to buy a Homeowner's Insurance policy or risk being blown away by the weather, burnt down by fire, burglarized by a Methamphetamine addict, (etc.) and loosing my home and/or belongings.

Of course the Katrina Hurricane victims are still in court trying to collect from our US property insurance companies after THEY made here in the US just HOPE you never have to make a claim against your property insurance company....

If you make a car or Home Owner's insurance claim your policy jumps so high you can't afford to pay it the next year... get cancelled.

Insurance is a joke in this country....

FEMA is a joke.

US border security is a joke.

George BUSH is a joke.

What's not a joke is the way George Bush has imposed his will upon the American public.

Now he seems to believe he can impose his will on everything he chooses to impose his will upon... everywhere in The WORLD!

As a US citizen who is supposedly FREE...I am not allowed to spend the meager few bucks I MAY have left in my pocket after all my taxes, and obligations, have been paid....GAMBLING!!

I can gamble if I can travel to Atlantic City or Las Vegas. But I can't gamble on my own PC in my own home!

I'm not FREE to Gamble unless I go to where George Bush WANTS me to gamble!!

The American public sent him a strong message recently that we no longer support his leadership.

But, apparently, I still can't gamble online! That has been proven this week with the shut down of Neteller services to American's followed by all the other deposit sites American's have been using.

And for this tirade to an online post...the FBI will probably show up at my door and drag this middle-aged, impoverished, single Mom away to jail.

So what makes the US Government so different than....other governments and former governments, that have exploited, controlled, and TERRORIZED their own citizens?

Answer: There's NO difference!

I WANT to be FREE to gamble ONLINE if I WANT TO!! So there Mr. George Bush, Jr. I am NOT a TERRORIST!! sz

My boss made a good point. What would happen if the entire country of the United states said enough is enough, and refused to pay any taxes at all.

That would sure get thier attention!

U.S. Cautiously Begins to Seize Millions in Foreign Banks

The New York Times

May 30, 2003

WASHINGTON, May 29 The Justice Department has begun using its expanded counterterrorism powers to seize millions of dollars from foreign banks that do business in the United States, creating tensions with the State Department and some allies.

Law enforcement officials say the tool has proven invaluable in seizing ill-gotten money that criminals hide overseas and that was once out of the government's reach. Under the counterterrorism measures approved by Congress after the Sept. 11 attacks, prosecutors are not even required to trace the money back to the target of an investigation.

Officials at the State Department, however, have raised concerns over the practice in part because most of the seizures have involved fraud and money-laundering investigations that are unrelated to terrorism.

State Department officials worry "that this might be seen by other countries as arbitrary or trying to extra-territorially impose our laws" under the guise of fighting terrorism, said a Bush administration official who demanded anonymity. Diplomats from several nations, including Switzerland, have voiced private objections, officials said.

The Justice Department has seized at least 15 foreign-based bank accounts in the United States in recent months, confiscating what prosecutors say they believe to be tainted money belonging to overseas banks in Israel, Oman, Taiwan, India, Belize and elsewhere, according to law enforcement officials who spoke on condition of anonymity. Other seizures are also being considered, officials said.

Justice Department officials acknowledged the diplomatic problems that can be created by seizing money from foreign banks, and they said they have sought to use the new power sparingly after considering all other legal options.

The authority to seize ill-gotten foreign funds "is a very powerful tool and one that can affect our international relationships," said Bryan Sierra, a spokesman for the Justice Department.

Mr. Sierra said that to protect the law enforcement relationships the United States has developed with governments around the world, the Justice Department "scrutinizes prosecutors' use of this provision before it is exercised."

The Justice Department has sent out guidance to prosecutors around the country about how to use the new power and has reached an informal understanding with the State Department to consult more extensively with officials there before seizing foreign money. State Department officials had complained that the Justice Department had kept them out of the loop in some cases.

"This is a process of last resort," said a senior law enforcement official. American diplomats "are worried about it, and we understand that, which is why we want to use this judiciously," said the official.

The State Department declined to comment on the issue. But a department official who spoke on condition o anonymity acknowledged that there was still the potential for abuse in foreign seizures, despite the Justice Department's pledges to consider diplomatic issues in its decisions.

"From a diplomatic point of view, we've got concerns," the official said. "We're the ones who have to ensure diplomatic relations, and this complicates that."

Traditionally in money laundering and terror financing cases, federal authorities have worked through international law enforcement treaties in requesting that a country that is home to a foreign bank move to freeze "dirty money" and turn it over to the United States. In countries with no treaty with the United States, American authorities say, their efforts often ran into dead ends.

But a little-noticed provision in the sweeping antiterrorism legislation passed in October 2001, gave federal authorities in such cases the power to seize money that passes through banks in the United States without notifying the foreign government. Most overseas banks maintain what are called "correspondent accounts" in American banks, allowing them to exchange American currency and handle other financial transactions in this country. Section 319 of the Patriot Act, as the legislation that grew out of the Sept. 11 attacks is known, allows federal authorities to seize money from the foreign bank's correspondent account if they can convince a judge that the money deposited overseas at the bank was obtained illicitly.

Information about the seizures has been tightly guarded, and federal judges have sealed the records on most of them. The Justice Department acknowledged two cases in which authorities have seized a total of more than $2 million from foreign banks, but declined to give the total number of seizures.

Law enforcement officials said the Justice Department had employed the new tool in about a half-dozen investigations, seizing money from at least 15 bank accounts. Most of those came in recent months and involved fraud and laundering cases, officials said. Law enforcement officials said some of the seizures have involved money that they suspect was helping to finance terrorism, but they declined to discuss details. Officials also see the measure as a potentially powerful tool in seizing money from drug traffickers.

In a case that resulted in a guilty plea in federal court this week, federal authorities seized $310,000 from four banks in the New York City area that held correspondent accounts with foreign banks in Oman, India, and Taiwan.

In seizing the money, the authorities charged that a Sudanese citizen in Brooklyn, Ahmed Abdu, had illegally wired more than $5 million to bank accounts around the world. It was the first time the seizure tool had been used by federal prosecutors in New York's Southern District.

Mr. Abdu pleaded guilty on Wednesday to a charge of conspiring to run an unlicensed money transmitting business and faces up to five years in prison. The authorities seized the $310,000 from four banks in the New York City area that held correspondent accounts on behalf of overseas banks: Citibank, Standard Chartered Bank, Deutsche Bank, and HSBC Bank USA.

"It was a strange thing for the banks," said a financial investigator with the Bureau of Immigration and Customs Enforcement in New York who spoke on condition of anonymity. "There was resistance initially, because they weren't exactly sure what to do. They'd never seen something like this before."

The seizure power has opened up doors once closed in financial crime investigations, the investigator said. "Now we can get ahold of money where we couldn't before," he said. "But we proceed very cautiously. It's such a powerful tool, you could knock the economy of a country on its head if it were a big enough case."

A seizure in Belize, centering on a lawyer and financial manager who was accused of embezzling money from his clients, has become a model for how the law can be applied, officials said.

The lawyer, James Gibson, was accused of bilking clients out of millions of dollars and then fleeing to Central America. Prosecutors said that Mr. Gibson, indicted by a federal grand jury in 2001, deposited some of the money in banks in Belize.

Although the government of Belize initially agreed to freeze the money, a court there blocked the move, and prosecutors said they believed that Mr. Gibson and his wife were looting the accounts to buy yachts and other luxury items.

But after the passage of the Patriot Act, the Justice Department moved within weeks in late 2001 to seize the money from the Belizean banks' correspondent accounts in the United States, according to a report prosecutors gave Congress last week on the new law enforcement powers.

Officials said that the money seized from Belize totaled about $1.7 million, and that it would be used to compensate Mr. Gibson's victims.

Charles A. Intriago, a specialist in money laundering law in Miami who publishes Money Laundering Alert, said he considered the Justice Department's new power to seize foreign bank accounts "maybe the most startling provision of the Patriot Act." He said: "It's an awesome power, and it may even go too far because of the diplomatic problems it could cause."

But Mr. Intriago added that he did not fault the Justice Department for considering the new tool in a range of fraud, laundering and drug trafficking cases that are unrelated to their counterterrorism mandate.

"If Congress had wanted this tool to be limited to terrorism, it would have done so," he said. "It didn't."

2003 The New York Times Company

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