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  1. #1
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    Default US Gov't Seizes $24 million from Bodog

    Big news on Forbes.com, which reports that the US Government has seized $24 million from accounts linked to Bodog.

    Federal filings make very clear that a serious criminal investigation of the Bodog enterprise is ongoing. At a minimum, word of the seizures is likely to rattle the confidence of U.S.-based online gamblers that they will receive their winnings, not only from Bodog but from the industry's other remaining participants.

    Detailed in court filings in a Baltimore federal court, the Bodog-related seizures from such well-known institutions as Wachovia (nyse: WB - news - people ), Bank of America (nyse: BAC - news - people ), SunTrust Banks (nyse: STI - news - people ) and Regions Bank, a unit of Regions Financial (nyse: RF - news - people ), increase the possibility of criminal action against Ayre himself. There already has been published speculation in his native Canada that he is under secret indictment somewhere in the U.S.
    Many more details in the full story ... http://www.forbes.com/business/2008/..._0730ayre.html

    Casino City and Buzzy will continue to follow this late-breaking story and provide updates as they are available.

  2. #2
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    Dang Buzz, you got your ear to the ground! I just got this info from IGamingNews and you had it posted already...

    I Reckon "Mr Bodog" should have taken care of where his cash-ola was stashed.
    --
    "People who are unable to motivate themselves must be content with mediocrity." ~Andrew Carnegie~

  3. #3
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    Here's the full story by vinism ...

    A two-year IRS investigation into Bodog has resulted in the seizure of more than 24 million dollars from two payment processors.

    On January 24 and February 19, 2008, the IRS siezed about $14.2 million from JBL Services, according to court documents filed in federal court in Baltimore. And on July 2, it seized about $9.87 million from ZipPayments. The money seized from JBL Services was being held in bank accounts at Wachovia Bank, Regions Bank, Bank of America and Sun Trust Bank. The ZipPayments money was in Nevada State Bank accounts. Both companies are accused of processing payments for Bodog.

    Bodog says the seizures haven't affected business for the popular online gambling site.

    "Not one single player failed to get paid when this processor (JBL Services) was disrupted," Alwyn Morris, chief exectuive officer of Morris Mohawk Gaming Group, which assumed ownership and operation of Bodog in North America in mid-2007.

    "Customer deposits are safe and every player has and will always be paid," Morris added, while acknowledging the challenges that working in the American market presents. "All operators outsource payment processing functions to third parties and these payment processors are subject to regulatory constraints wherever they operate, and, occasionally in the U.S., are subject to legal action because of the uncertain legal environment there."

    According to court documents, Bodog first appeared on the IRS' radar in 2003, when the IRS Criminal Investigation division "conducted interviews" regarding Bodog founder Calvin Ayre. But a formal investigation into Bodog didn't begin until 2006.

    During the course of the investigation, IRS Special Agent Randall Carrow became intimately familiar with the ways the online casinos handled paying their customers.

    "Because of various developments (Department of Justice prosecutions and new federal legislation), it has become more and more difficult for Internet gambling web site operators to move money into and out of the United States," Carrow said in an affidavit supporting the seizures.

    "To continue to make 'payouts' to gamblers, some Internet gambling operators have begun using money processing businesses in the United States," Carrow explained. "Based on my training and experience, I know that, typically, the gambling web site operator will send a U.S. processor a check or wire transfer of a relatively large sum of money, usually hundreds of thousands or million of dollars. The processor then distributes the money to individuals, either by check or electronic transfer of some type. None of the transfers identify the money involved as gambling proceeds.

    "Bodog, through various entities, has been sending money to various processors in the United States, using several different business names, including MPS Processing Ltd., Direct Channel LLC, JBL Services, EGALO and ZAFTIG Instantly Processed Payments Crop., dba ZipPayments.com."

    Carrow's investigation really began to pick up steam toward the end of 2006. After an informant helped link a payment processor owned by Bodog founder Calvin Ayre to Bodog's deposit system, and establishing the different Bodog owned and/or affiliated companies used for payments, including credit card transaction, the IRS used an undercover agent to places bets at Bodog.

    The undercover agent opened an account on Dec. 21, 2006, and placed bets on two football games. By January of 2008, the undercover player had placed more than 40 bets, and wagered more than $3,500.

    In February of 2007, the undercover agent requested a payout of $1,500. In March, he received a check drawn from a Direct Channel bank account with Mercantile Bank and signed by M.G. Scott. The check bounced, and in April, Bodog sent a replacement check.

    According to Carrow's affadavit, through a combination of more withdrawal checks, forensic accounting and "cooperating individuals," the IRS tracked a payment chain back to Bodog and companies owned by Ayre or Bodog, and then back down to other payment processors including JBL Services.

    Another "cooperating individual" at JBL Services admitted all of JBL's money came from Bodog, and the IRS moved in.

    Carrow later discovered that a state gambling control board was also investigating Bodog. Carrow found a similar accounting chain when an undercover agent requested a payout from Bodog in April of 2008. The check from Zip Payments arrived in May, and Carrow traced the chain back to Bodog.

    Bodog denies that all the money the ZipPayments money seized belongs to them. "This is simply false," Bodog said in a statement.

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    The rebuttal,

    Good afternoon,
    An article was recently released on Forbes.com that creates several misimpression's that the Morris Mohawk Gaming Group feels compelled to clarify for our customers.
    As most of our customers already know, all operators outsource payment processing functions to third parties and these payment processors are subject to regulatory constraints wherever they operate, and, occasionally in the US, are subject to legal action because of the uncertain legal environment there.
    However, the seizure of funds from these US payment processors was mischaracterized in this article, which refers to two specific legal cases against US processors. Rightly or wrongly, the article does not make a clear distinction between these cases, which, as a result, paints a misleading picture.
    The facts are these: the first of these cases – relating to a seizure of funds from a processor known as JBL Services – happened some time ago and has absolutely nothing to do with the current payment processing challenges being experienced in the US. The constraints being experienced by payment processors in the US are universal in that region and not specific to any particular processor or site. Also, note that not one single player failed to get paid when this processor was disrupted.
    The second case refers to a payment processor known as Zippayments.com and seizure of funds from this processor’s bank accounts in Nevada. The article falsely implies – but notably does not go so far as to state - that $9.9M seized from Zippayment’s Nevada bank accounts were funds on account for “Bodog”. This is simply false.
    Processing partners with whom the Morris Mohawk Gaming Group does business are sophisticated organizations that are perfectly clear as to the actual facts of these cases and their contexts. They are unfazed by such media hype and Morris Mohawk wishes to ensure that its customers are similarly informed. Customer deposits are safe and every player has and will always be paid.
    Alwyn Morris
    C.E.O.
    Morris Mohawk Gaming Group

    pgaming

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    Default Random thoughts about the Bodog case

    For me, the three most interesting things in reading through the court filings were:


    1. The IRS views Bodog as primarily a sportsbook that happens to offer other services, and went after them because of the sports betting (and Calvin Ayre).
    2. The IRS has an outstanding grip on how the online gambling industry uses the payment processing system.
    3. Calvin Ayre is very much on their radar. And my best guess is that if they've compiled evidence for a case against him, this stuff is only the tip of the iceberg.

    One note about the investigation -- the IRS Criminal Investigators are some of the best in the business. The man leading this investigation (and there's nothing to suggest that it's ended) is IRS Special Agent Randall Carrow. He's been an IRS Special Agent since March of 1987, and he knows what he's doing.

    Right now, the law is pretty clear when it comes to sports betting in the U.S. -- it's not allowed over the phone or Internet (and only in certain places live), and the DOJ and IRS will come after sportsbooks (or their payment processors) for offering it. In fact, virtually every major online gambling case in the U.S. has involved betting on sports in some way.

  6. #6
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    The Vancouver Sun doesn't quite believe Bodog's version of the story, especially Calvin Ayre's explanation as to why he sold the company and left the helm as CEO.

    In April, former Vancouver resident Calvin Ayre caught industry observers by surprise when he announced he was quitting his online gambling empire, Bodog, purportedly to regain his privacy and further his charitable activities.

    The surprise was compounded when he claimed he had transferred ownership of Bodog a year earlier to the Morris Mohawk Gaming Group, which runs hundreds of gaming websites from the Kahnawake reserve near Montreal.

    "I was really more of a brand ambassador for Bodog the past while anyway -- but it was fun while it lasted," he said on the Bodog website.


    Are we really to believe that Ayre, who had been flamboyantly and boisterously playing the role of Bodog's fun-loving top dog until then, had actually checked out months before, and that his motive was simply to live a life of quiet reflection and philanthropy?

    I think not. It is widely known that the U.S. government, which has declared war on unlicensed Internet gambling, has Ayre in its crosshairs.
    It is more likely that he is trying to distance himself from any future prosecutions.

    This theory was reinforced last week when Forbes magazine reported that the U.S. government has seized $24 million from U.S. bank accounts linked to Bodog.

    More than half the money was seized in January and February, before Ayre suddenly decided that a more sedentary life was in order.
    Full story here ... http://www.canada.com/vancouversun/n...5-a69439355dfe

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