The money Anne Arundel County Police Department received was not from Black Friday or Blue Monday, but from funds confiscated back in 2008 to payment processors that operated on behalf of Bodog.
Earlier this month, several US newspapers and igaming pubblications reported news of the police department of the Anne Arundel County receiving almost half a million dollar for assisting federal prosecutors in the crackdown of offshore gambling sites.
But what really happened?
Reports said the police department of Anne Arundel County, which hosts the capital city of Maryland, Annapolis, received a check for $470k for helping to seize millions in a two-year investigation called “Operation Texas Hold’em”. They also added that the Anne Arundel County police department expected to receive more in the future.
According to police statements, the money the county police received was from seizures that happened more than a year ago as the result of an investigation that started in 2006, while the sting operation began in December 2008.
Most igaming pubblications associated the sting with Linwood Payment Solutions, the phony payment processor set up by the FBI and that eventually lead to the indictment of BetEd and Bookmaker.com.
But Linwood Payment Solutions started its operations at the end of 2009 and the 300,000 transactions worth $33 million the company processed in payments were from 2010 and early 2011.
It was obvious that Operation Texas Hold’em was a completely different operation.
The US newspapers that reported the story didn’t specify the origin of the funds causing online poker players to associate the payment with either Black Friday or Blue Monday indictments.
Many players expressed their disappointment at news that the US Government chose to share the funds it confiscated with the police department instead of faciliting the payments back to the players themselves.
Confusion was also created by a statement of the spokeswoman for the US Attorney’s Office in Baltimore who said “Illegal gambling proceeds are forfeited to the government. Anyone who believes that an Internet gambling business owes them money can try to collect from the Internet gambling business. The government is not going to give the money to gamblers.”
This statement seemed to connect the forfeiture and the following disbursement to the police department with the recent cases. And even though distribution of seized money is not unprecedented, it maddened players even more.
In the comments section of the Odenton Patch, players said the US Government was effectively stealing money from its own citizens.
And an Odenton Patch journalist further contributed to the confusion when he asked players that had lost money as a result of the recent seizures if they wanted to be interviewed for a follow-up story.
But again no mention of the origin of the funds.
So I started searching both the PACER for the Maryland court and the US DoJ web site hoping to find a court paper, possibly a press release, about Operation Texas Hold’em, but I couldn’t find anything.
Then I deciced to use a different tecnique.
I knew because it had been reported by the Baltimore City Paper that the money Anne Arundel County received was based on the number of hours someone named Gunn spent working on the case.
Police Chief James Teare Sr. even thanked Gunn for his hard work, tenacity and dedication.
I immediately discovered that Gunn was Richard Scott Gunn, a Anne Arundel police officer that had been assigned to the Department of Homeland Security Immigration and Customs and Enforcement.
And there it hit me as I knew I had seen the name Scott Gunn before.
There was only one possibility: the past Maryland investigation into online gambling payment processors.
That investigation, well chronicled by the Baltimore City Paper, led to the civil forfeiture of almost $30m million from bank accounts linked to Bodog.
And there it was: Anne Arundel County Police detective Richard Scott Gunn was one of the three ICE task force members in the years-long Maryland investigation into online gambling payments, alongside Maryland State Police trooper Robert J. Mignona and ICE special agent Lisa Ward.
Gunn was the investigator that applied for the seizure warrant of Forshay Entreprises accounts at Wachovia Bank, the search warrant for Electracash email and the criminal complaint against Kenneth Wienski, who used a medical-billing company to move online gambling funds.
Back in December 2006, after having conducted interviews regarding Bodog.com and its founder Calvin Ayre since 2003, the Criminal Investigation Division of the IRS launched a formal investigation into Bodog activities when an IRS agent posing as a customer opened an online account and started to place bets on the Bodog web site.
Later in 2007 the undercover agent asked for a payment and there the IRS started to track the money trail. Then they eventually found informants amongst online players as well as one Bodog employee that helped corroborate facts from the inside of the operation. More information was obtained by investigators working on similar and related cases in other jurisdictions.
Then in early 2008, the IRS investigators had enough information to charge the payment processors suspected of managing US payments on behalf of Bodog.
A task force of the Department of Homeland Security Immigration and Customs and Enforcement (ICE) joined the IRS in Maryland’s online gambling crackdown that charged a total of five men and seized tens of millions from accounts of payment processors that provided services to offshore gambling sites.
The men charged were Edward Courdy, Michael Garone, Kenneth Wienski, James Davitt and Martin Loftus.
The companies they operated included ZIP Payments, JBL Services, HMD Inc, Forshay Enterprises, Electracash and Direct Channel.
Michael Garone eventually started cooperating with US prosecutors and at end of 2010 right before he was sentenced to one year of probation, court documents and a statement from US Attorney Richard Kay revealed how Garone had been instrumental in an extensive undercover operation started soon after his arrest in 2008 and ended in November 2010.
The extents of his cooperation are not known but it is safe to presume that prosecutors in Maryland used his knowledge of the payment processing industry to set up the Linwood sting.
James Davitt also agreed to cooperate with federal authorities in Maryland and New York, a circumstance that suggests investigators in the two jurisdictions have been coordinating their efforts for years.
Courdy’s status remains unclear as his criminal case disappeared at around the same time Garone started to cooperate and his case was sealed, suggesting that Courdy might have been working with Maryland prosecutors and probably still is.
Bodog denied they had funds seized. On the CalvinAyre.com portal, the Morris Mohawk Gaming Group, which has been the front for Bodog.com since 2007, simply stated they did not know any of the people and companies involved “so the filings in the case are misrepresenting the facts”.
I guess CalvinAyre.com and the Morris Mohawk Gaming Group didn’t read the court papers.
Thanks to Van Smith and the Baltimore City Paper for covering the case in detail despite the problems caused by court papers being sealed or having been removed.
Pierluigi Buccioli
Calculators
