NEW YORK — Federal prosecutors have frozen bank accounts holding the online poker winnings.
The money, said to be in the millions, is held by two companies that process payouts for four offshore poker websites that include PokerStars.com and FullTiltPoker.com.
The feds in the Southern District of New York froze funds found in Citibank, Wells Fargo and two smaller bank accounts.
The Poker Players Alliance expressed great disappointment and questioned the merit of the federal fund freezing, but said the move is not related to enforcement of the Unlawful Internet Gambling Enforcement Act of 2006, which has been contested ever since its implementation.
"The banks don't have to comply with it until December 1, 2009," PPA Executive Director John Pappas told eCommerceTimes. "We are scratching our heads about what this could mean."
The timing of the federal prosecutors is certainly ... curious.
Democratic Rep. Barney Frank, of Massachusetts recently introduced a bill that would repeal the Internet gaming act. Instead of banning online gambling, Frank's measure would seek regulation and taxation to increase revenue.
"We have contended that Internet poker play is not unlawful," Pappas said, calling the federal action "politically tone deaf," adding, "Congress is moving in a different direction on this issue."
Letters sent by Assistant U.S. Attorney Arlo Devlin-Brown to the payment processors stated the now-frozen bank accounts "constitute property involved in money-laundering transactions and illegal gambling offenses."
Interactive Media Entertainment and Gaming Association chairman Joe Brennan told AVN.com that more information is needed regarding the Feds warrant and charges.
"It's not clear. The affidavits used to get the warrants have been sealed, so we don't know what's involved,” Brennan said. "Until we do, anything said is speculation on our part."
IMEGA is waiting on all those details before evaluating legal strategies and options.
"We're very closely looking at the situation, cooperating with all parties on all sides -- the Poker Players Alliance, the Interactive Gaming Counsel," Brennan told AVN.com. "But until we can get a better, clear picture from the U.S. Attorney's office in New York, what they based this action on, it's really hard to know how we're going to move forward."
Online players unable to access their winnings were stunned.
ABC News reports one of the winners who had money in one of the accounts, David, preferring not to use his last name, was also angry.
"It's not like the government went after money that the site made, instead they seized money that belonged to me," David said. "There is no law that restricts citizens from recovering money."
Both FullTiltPoker.com and PokerStars.com have reimbursed players who tried to cash out and were unable to because of the frozen bank accounts.
In a statement, FullTilt assured players "that their funds remain safe and secure" and also said, "All players who were affected by the current situation have had their funds returned to their accounts."
According to ABC, the government crackdown affected some 27,000 people.