FBI Cracks Down on Pokerstars in Arizona

I saw this interesting blurb in this morning’s business section.

 

For Immediate Release
September 15, 2010      United States Attorney's Office
Southern District of New York
Contact: (212) 637-2600
Arizona Bank That Received TARP Funds Agrees to Forfeit Profits from Processing Online Gambling Payments
Bank Also Agrees to Implement Internal Money Laundering Controls to Comply with Federal Bank Secrecy Act

PREET BHARARA, the United States Attorney for the Southern District of New York, NEIL M. BAROFSKY, the Special Inspector General for the Troubled Asset Relief Program ("SIGTARP"), and JANICE K. FEDARCYK, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation ("FBI"), announced that the GOLDWATER BANK, N.A. ("GOLDWATER BANK"), located in Scottsdale, Arizona, entered into a settlement agreement requiring it to forfeit $733,804.92 to resolve civil forfeiture claims alleging that the funds are traceable to property involved in money laundering, to proceeds of an illegal online gambling business, and to property used to operate an illegal online gambling business. GOLDWATER BANK previously received funds through the Capital Purchase Program of the Troubled Asset Relief Program ("TARP"). As part of the settlement, GOLDWATER BANK agreed to implement anti-money laundering and Bank Secrecy Act controls to safeguard the investment made by U.S. taxpayers in the bank against future risks.

According to the Complaint and Stipulation and Order of Settlement filed in Manhattan federal court:

Between January and May 2009, more than $13,335,248.91 in funds traceable to Pokerstars, an online gambling company based in the Isle of Man, and other offshore online gambling companies were deposited in a bank account at GOLDWATER BANK held by ALLIED WALLET, INC. These funds were traceable to several sources, including wire transfers from outside the United States by individuals and entities who knew that (a) the funds involved represented the proceeds of the illegal transmission of gambling information and the operation of an illegal gambling business, (b) the transfers were made in order to promote the carrying on of an illegal gambling business, and (c) the transfers were designed in part to conceal or disguise the nature, location, source, ownership, and control of the proceeds of the illegal transmission of gambling information and operation of an illegal gambling business.

During this same time period, ALLIED WALLET, INC., paid GOLDWATER BANK for processing automated clearing house ("ACH") transactions, including payments in the form of ACH transactions to and from the bank accounts of online gamblers located in the United States who were using Pokerstars.com and other gambling websites to engage in online gambling. These ACS transactions typically involved payments from players to the gambling websites for credits used in online gambling and payments to the players for their online gambling winnings.

On August 16, 2010, ALLIED WALLET, INC., ALLIED SYSTEMS, INC., and their owner AHMAD KHAWAJA entered into a settlement agreement requiring them to forfeit the $13,335,248.91 traceable to Pokerstars and other offshore online gambling companies.

GOLDWATER BANK asserts that it did not know that the ACH transactions requested by ALLIED WALLET, INC., were being made to promote an illegal online gambling business. However, GOLDWATER BANK has agreed to forfeit $733,804.92, an amount equal to the net income that it received to process these ACH transactions. In addition, in order to safeguard the United States’ investment in the bank through TARP, GOLDWATER BANK has agreed to develop and implement internal anti-money laundering procedures, to comply with the Bank Secrecy Act, and to create internal training programs and an independent audit function to ensure that its compliance is effective.

Manhattan U.S. Attorney PREET BHARARA said: "Today's forfeiture underscores that banks, particularly TARP recipients like Goldwater Bank, should not profit from the fruits of criminal conduct. The internal controls that Goldwater Bank must implement will help to ensure that such conduct will not be repeated. We will continue to work with our partners at SIGTARP and the FBI to ensure that financial institutions remain ever vigilant regarding the provenance of the funds that they process."

TARP Special Inspector General NEIL M. BAROFSKY said: "Today's charges and settlement should send a powerful message to TARP recipients that they will be held strictly accountable for any misdeeds while they stand as custodians of taxpayer dollars. SIGTARP commends the leadership of the U.S. Attorney for the Southern District of New York for his continued use of both civil and criminal remedies to protect taxpayer interests."

FBI Assistant Director-in-Charge JANICE K. FEDARCYK said: "Although Goldwater Bank denies guilty knowledge of its role in facilitating an illegal online gambling business, it was paid to execute transactions that were essential to the operation of this criminal enterprise. The forfeiture settlement means the bank won’t profit by providing this service. The FBI remains committed to vigorous enforcement of the laws against illegal online gambling."

Mr. BHARARA praised the investigative work of SIGTARP and the FBI in the case.

This forfeiture action is being handled by the Office’s Asset Forfeiture Unit. Assistant U.S. Attorneys JEFFREY ALBERTS and ARLO DEVLIN-BROWN are in charge of the prosecution.

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Shortstack Play in Low Buy In Tournaments

So after a horrific run of cards in the last couple of weeks which really sapped my confidence after I ran so well in July, I took a break. I took about a week off and just reviewed some poker books and tried to watch some Cardrunners videos. I don't know if I learned anything, but it at least cleared my head.

Friday was the day before a long holiday weekend. Usually that means that my office is cleared out and I can't get a hold of any of my clients on the phone. With that in mind, I decided to play the afternoon tournament at Casino Arizona. The total buy in was $85 for 3500 chips. There were 138 players.

I have gone over the structure before in this blog, and it basically is very fast. I decided to keep track this time on how many hands I get in a level. It's a grand total of 11 hands for every 20 minute level. So waiting around for a good starting hand is not a strategy that will allow you to win the whole thing.

The one twist that I had failed to consider in the past is that after you get past the second break, they do stretch out the levels to 30 minutes. That does help things a little bit.

My main dilemna is this: When you have 10-15 BB in your stack and 1/2 of your table has 8 BB or less, should I be raising all in or just 2.5X the blinds?

Reasons for Small Raises:
a. I can fold to a reraise
b. If I raise in early position and someone reraises and there's another raise (meaning AA or KK) I can get away cheap.
c. I can make a smaller continuation bet on the flop if I get called
d. The players don't get as angry and don't spite call as fast

Reasons for Large Raises:
a. You don't get called as much. This is good, because risk-free chips are always good in this tournament
b. If you are called it is usually just one person. Raising 2.5x the blind can lead to multiple callers and big pots out of position
c. The pots are bigger when you win after getting called
d. You take away the possibility of someone bluffing you out of a pot

The best reason for large raises is b. winning more money when you are called. It is easy to go from 10BB to 21 BB when you get called with a worse hand or suck out. A 20 BB stack in the late stages of these tournaments is huge. The problem is that you will have everyone else covered and the effective stacks of your opponents will still be 10BB or fewer. There is not going to be much post flop play when everyone is this short.

Yesterday I got lucky on a couple of key hands that kept me healthy. One one hand, I open raised from the button against an opponent who had 8 BB left. I raised 3x the blind with 56s. She moved all in with Ace-King. I hit a 5 on the turn and she failed to improve. Later when I was short with 10 BB I moved all in with A6s in late position and was called by Ace-King again. Once again I hit the 6.

I really advanced through most of the tournament stealing blinds and getting lucky on those two hands. I never had Aces. I had Kings once and chopped the pot with another player who also had Kings. I did win a big pot with Ace-King when a tight player decided to go crazy with 2nd pair.

The problem was once again I was between 5 and 8 BB for most of the bubble. From about 27 players down to 15, I did barely enough to survive. I just felt like I didn't have enough chips to get people to lay down the medium strength hands. Especially the other short stacks who I thought would be looking to get it in and double up. Instead it seemed like everyone played really tight, especially the short stacks. I need to get better at figuring out who is doing this and abuse the hell out of them. The goal should be to win enough chips that when I do eventually get called, I am not all in and can survive, or get lucky and win a huge pot.

There were two hands at the final table that I wish had to play over again. They were both close decisions, but if you look at the results, it could have propelled me to a win.

The previous hand, there were two players with short stacks all in and the player to my right showed me his hand of 55 before he mucked. I thought that was a mistake because I felt sure that the first raiser had over cards and the second player thought hard before he made his move which made me think the had another Ace-X type of hand. I turned out to be right and to make matters worse for this player he would have flopped 3 of a kind.

The very next hand, there is a raise and then a reraise all in. The player who reraised all in had just lost the previous hand when his AK had been drawn out by AQ. So this might be a steam raise, but he had also been playing very tight. I look down at two 8's. I only have 6x the blind left so I should be gambling. But everyone else is short too. I decide to lay it down and wait for a spot where I can be the first one in the pot or a stronger hand. Sure enough the other two players see the flop and it has an 8. I could have tripled up!

The next hand after this, a short stack moves all in and I have A-8 offsuit. I think about calling. But I muck. Someone else calls with a low pocket pair. The flop has two Aces and I could have done it again.

I eventually went out in 5th place when I open raised my K-T and got called by Ace-Queen. I missed and collected $515. Not a bad day's work. I really think I can win one of these.