Money Laundering

[Blake Lovely]

A question about money laundering and internet poker.
Why are the poker sites as in independent entity concerned with money laundering? Why are they concerned with credit card fraud for that matter?

Being overseas they are subject to US law.
They still get the rake from these illegal transactions.

Possible reasons i can think of.
1)transferring fees become more than the money they make from rake. (which would offer possible kick back opportunities if you wanted to launder money through the site.)

2) possible damage to end users in the US. A large portion of the revenue comes out of the US. If the US government became increasingly aware of the problem, then they would take action that would cause problems for US poker players.

[Thythe]

example: Somebody steals a credit card and buys in for $500. He think dumps these chips to a friend who cashes out. The original credit card owner charges back the transaction and the poker site is out $500.

[Blake Lovely]

What exactly do you mean?

Once the credit card is charged, the company can somehow withdraw payment?

As long as the poker site doesnt give out chips until the transaction clears then they cant be forced to return funds that have already been recieved.

Nor do i think the credit card company would refuse payment in the event of fraudulent use (not real sure, any expert advise would help there)

But more importantly what about this situation.

Lots of drug money i want to clean. I have in overseas accounts. I deposit the money to a poker site then lose it to my friend who withdraws it in the US and pays taxes on it. Money is clean.

Or I buy drugs from someone who has an account on a poker site, and I pay them by losing that money to them online.

In that situation, why does the poker site care?

that is perhaps a better example then the credit card issue. However, so long as the poker site recieves payment in the event of a credit card fraud, why would they care?

Not that I condone any of the above, just thought it was an interesting question.

[Alobar]

[ QUOTE ]

In that situation, why does the poker site care?


[/ QUOTE ]

The poker site cares because it has to protect the intergrity of the game. No one is going to play at a site that is full of drug dealers dumping chips and other illegal things going on.

[TwoGun]

People could do that at a B&M casino and heave less paper trail.

You and I sit at the craps table. We then go to the bathroom. I give you $4k worth of chips. We go back to the craps tables for a second. Guess I lost that money at the casino and you won! And whaddya know, we did it all in cash too, so it can go even less detected!

[Alobar]

Two men going into the bathroom together and one of them coming out 4K richer, so many jokes I could make here..... /images/graemlins/smile.gif

[Cubswin]

A guy with an avatar of a guy in spandex cracking a joke about two guys going to the washroom together....the irony of it.

[BottlesOf]

Who sits at craps tables?


....sorry, couldn't resist....

[Kurn, son of Mogh]

Being overseas they are subject to US law.

Last I checked, U.S. jurisdiction stops at the border.

[47outs]

Check again.

outs

[highlife]

[ QUOTE ]
People could do that at a B&M casino and heave less paper trail.

You and I sit at the craps table. We then go to the bathroom. I give you $4k worth of chips. We go back to the craps tables for a second. Guess I lost that money at the casino and you won! And whaddya know, we did it all in cash too, so it can go even less detected!

[/ QUOTE ]

umm what kind of drug dealer launders 4k? thats pocket change. for the type of money they are looking to clean, there is no way they could do it at a B&M casino without attracting ALOT of attention.

[Kurn, son of Mogh]

Really. Give me an example of the IRS having authority over foreign companies.

[moondogg]

The US claims jurisdiction over a lot of things. For example, according the Monroe Doctrine, the US claimed to have authority over pretty much the entire western hemisphere.

The issue becomes enforcebility (sp?). In reality, the US could enfore pretty much whatever they want on whoever they want, but in many cases it would require an act of war (e.g. Noriega, Afgantistan, Iraq). Unless the US is planning to invade the host country where the "criminal" actions are taking place, they pretty much have to rely on the government of the host nation to enforce the "law" or extridite the offending parties. For example, when Canadians were bootlegging booze into the US during prohibition, Canada helped the US attempts to stop it, despite booze being perfectly legal in Canada.

However, I don't think the US will get a whole lot of cooperation from foreign countries when it gambling/poker/etc. Countries like Costa Rica thrive on providing internet gambling to the US, so they are not going to clamp down on it without some serious pressure. Quite frankly, in looking at the backlash over the US presense in Iraq, it would be a tough sell to say we need to pursue either sanctions or military action against countries like Costa Rica because of a little gambling. Too many people don't see gambling as a threat to our country at all, and the people who considerate a problem don't consider it a big enough problem for the US to start flexing international muscle again.

[Blake Lovely]

I meant to type aren't. my fault.

[Alobar]

you forgot to mention his legs are shaved too /images/graemlins/smile.gif

[Pokeraddict]

[ QUOTE ]
What exactly do you mean?

Once the credit card is charged, the company can somehow withdraw payment?

As long as the poker site doesnt give out chips until the transaction clears then they cant be forced to return funds that have already been recieved.

Nor do i think the credit card company would refuse payment in the event of fraudulent use (not real sure, any expert advise would help there)

[/ QUOTE ]

I'm not sure if you know this. Most US banks will not let you use your credit card. Partly because of the govt but mostly because of the huge costs they had in people losing and claiming they never made the purchase, people chipdumping and charging back, people using stolen credit cards and dumping and the cost of lawsuits several issuers had with people suing CC companies for their losses because they alleged the CC companies were participating in an illegal act, obviously a cop out excuse.

In the US you have 60 days to dispute a charge, ANY CHARGE. Online transactions are especially vulnerable. They most often do not have signature faxed and obviously do not have an imprint of the card or a swipe. These transactions can be disputed and won in most cases, especially since online gambling is not a product that could be signed for upon delivery like an Ebay purchase. If you dispute the charge and win the online casino/pokerroom/whoever is out of the money in their merchant account. If this money is already withdrawn/lost like im sure it is in almost any case they have no way to recoup the losses.

Casinos keep negative databases so you may get away with this once but will have a hard time finding anyone out there that will want your business after you've done this. I didnt post this to give anyone an idea on how to scam, was just to answer a question. This is why many casinos ask for these annoying ID fax ins.

[Blake Lovely]

Good post. thanks for some of the insights.