MANHATTAN (CN) - A payment processor who worked with online poker companies pleaded guilty Monday to conspiring to commit bank fraud and operate illegal gambling businesses, the U.S. Attorney's Office said.
Chad Elie, 32, of Las Vegas, faces up to 5 years in federal prison and agreed to forfeit his interest in more than $25 million held in payment processing accounts, and to pay a $500,000 fine, prosecutors said in a statement.
The forfeited money will be put into a pot to compensate victims of fraud in U.S. v. Pokerstars, et al., the U.S. Attorney's Office said.
Elie pleaded guilty to "a scheme to deceive banks into processing hundreds of millions of dollars in Internet gambling transactions," prosecutors said in the statement. He worked with Pokerstars, Full Tilt Poker and Absolute Poker, according to the statement.
"In late 2006, Congress enacted the Unlawful Internet Gambling Enforcement Act
('UIGEA'), making it a crime to 'knowingly accept' most forms of payment 'in connection with the participation of another person in unlawful Internet gambling,'" prosecutors said in the statement. "After several Internet gambling businesses withdrew from the U.S. market following the passage of the UIGEA, the [three named] poker companies became the top three Internet poker operators continuing to do business in the United States. Because United States banks were largely unwilling to process Internet gambling payments, companies turned to third party payment processors, including Elie, who disguised payments so that they would appear unrelated to online gambling. Elie and others lied to United States banks by claiming that the financial transactions they were processing were for businesses other than Internet poker companies, and they created phony corporations and websites to disguise payments to the poker companies."
Elie will be sentenced on Oct. 6. Four co-defendants charged with him have pleaded guilty, prosecutors said: Bradley Franzen, Ira Rubin, Brent Bekcley and Ryan Lang. A sixth defendant, John Campos, is scheduled to go to trial on April 9.