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If the DOJ Wants to Make a Point, They Should Start Arresting the Big Boys...By Hartley Henderson

The U.S. department of justice is at a crossroads. They have been adamantly opposed to any leniency in the area of online gambling, but have been ineffective at actually stopping the activity by Americans who like to gamble online. The UIGEA has had little effect in stopping web betting among Americans and the arrests and confiscation of money at NETteller has proven to be just an inconvenience to most bettors. For those who want to deposit or withdraw funds at an offshore casino, poker room or sportsbook the ability to do so is there. More importantly, "the message" is not getting through to U.S. gamblers. Arrests of people like David Carruthers, Peter Dicks and John Lefebvre, which the USAO figured would have major repercussions, have been met with indifference by most Americans, including those who like to wager online. The reason for this of course is that unless one is actively involved in the industry, he or she wouldn't have a clue who these people are. Obviously those who post at MajorWager or read industry periodicals will know all about these gentlemen, but to the average American saying Peter Dicks is equivalent to saying John Smith. Consequently these big arrest announcements by the DOJ have been met with a shrug by most of the public (if they heard about the arrests at all). What the majority of online bettors do know is that they can bet online at places they've seen advertised or that they have played with in the past. Sure, some books have left the U.S. market or have fewer deposit options, but most online books are still available to Americans. So Grandpa Joe or Cousin Jim who don't know or care about the industry shenanigans understand that they can still log on to a major offshore sportsbook or to Poker Stars and place bets with Chris Moneymaker or Greg Raymer, and when it comes time to withdraw funds, the money will get to them somehow.

If the U.S. department of justice wants to make headlines with online gambling arrests they need to start issuing indictments against some big names that will garner headlines in newspapers and the financial pages. First, they can start by issuing arrest warrants against management at Bank of America, Citibank and Chase Manhattan. Each of these financial institutions accepted deposits from Americans that could be sent directly to their NETeller accounts. Since the DOJ has announced that NETeller was operating illegally by taking money from the United States all those years, by definition all those banks are guilty of aiding and abetting a crime. Furthermore, the CEOs of Visa and Mastercard should have indictments issued against them for processing online gambling transactions for Americans. Those arrests would clearly make the front pages of the business sections of newspapers and would make readers of Forbes or the Wall Street Journal hesitate before making an online bet in the future. We'll even make it easy for the Feds. Here are the CEOs of those banks between the years of 2002 and 2004 when each of those companies willfully processed transactions to NETeller. Ken Lewis was head of Bank of America during that period, Charles Prince was head of Citigroup and still is and William Harrrison Jr. was head of Chase Manhattan. If the DOJ is serious about bringing in criminals that were aiding and abetting online gambling during that period (as the NETeller founders were charged with), then they should be indicted and face lengthy jail sentences unless they turn over all their assets and admit that they were wrong for processing those transactions, just as NETeller had to do. Sure, the banks paid a few fines for past actions, but precedent states that the DOJ must also issue arrest warrants for the above gentleman.

Unfortunately for the DOJ, even if they did issue those arrest warrants it would likely have little effect on the majority of the public. Most Americans don't know or care who Ken Lewis is either. While his arrest would send shivers down the spines of avid readers of the Wall Street Journal or those who watch CNBC nightly, the truth is that most Americans would shrug off his arrest. The highest rated shows on TV today are shows like CSI Miami and Deal or No Deal. It's actually quite astounding that the Beverly Hillbillies still has 3 of the highest ranked regular season shows in U.S. TV history, although that's a topic for another day. The point here is that Americans identify with celebrities. After all, the arrests of Paris Hilton, Michael Jackson, Martha Stewart and Nick Nolte, among others, made headlines everywhere. And of course those arrests were also water cooler talk around most offices.

So if the DOJ wants to make some noise with the general public they should arrest celebrities that were involved with online gambling. And who might those be? Well speaking of Paris Hilton, the Hilton Group bought Centrebet in the late 1990s and eventually sold it to Jupiter. But during the time Hilton owned Centrebet, the sportsbook did cater to the U.S. market. In the late 1990s and early 2000s, Kenny Rogers had part ownership in a casino bearing his name. Granted, it didn't take bets from Americans, but there were links on that site to where Americans could bet at real money online casinos, and according to the DOJ, doing so was illegal. Imagine the headline that the U.S. Department of Justice arrested "The Gambler" himself. As well, Larry Holmes, the famous Heavyweight Champion, had a casino, as did Bubba Smith and of course Rodney Dangerfield. Unfortunately, Rodney Dangerfield is no longer with us and we would never suggest the DOJ should go after his estate, as that would show him no respect at all. Playboy had an online casino for years which had links to other sites. In fact, Playboy had planned to expand the site, but decided not to. Perhaps Hugh Heffner or his daughter should be indicted.

I could go on and on, but the point here is simple: there are numerous famous Americans who have profited from online gambling and to not arrest them is selective prosecution plain and simple. Lefebvre and Lawrence were long gone from NETeller when they were arrested, so suggesting the DOJ only cares about "current" people involved in the industry isn't true either. Will the DOJ actually go after the bankers or celebrities? Of course they won't. Banks are far too large and control too many U.S. interests. Arresting a CEO or former President of a major bank would almost certainly have a negative effect on the economy, so the DOJ will just give them a pass. Ian Comisky, a former federal prosecutor and author of the book "Tax Fraud and Evasion", stated: "Prosecutors don't bring money-laundering charges against the largest banks for fear of creating panic among investors and world economic turmoil." So if they won't arrest them for money laundering, they certainly won't arrest them for aiding and abetting offshore online gambling either.

Will the DOJ arrest celebrities for their role in online gambling in the past? Not likely. Right now online gambling probably ranks in importance with the American public about as high as illegal fishing laws do. If celebrities are arrested and the whole situation is brought to light on shows like Entertainment Tonight, Regis and Kelly, or in magazines like the National Enquirer it could backfire against the DOJ. When Americans realize that their favorite stars have been arrested for having some connection to an establishment that allowed Americans to bet online, no doubt there will be a cry from the public similar to what is happening on MajorWager, i.e. "why is it illegal for Americans to spend their own money in a manner they like?" Furthermore, many celebrities hold public office today, and the last thing the DOJ wants is Arnold Schwarzenegger getting upset with them. Consequently, the DOJ will continue to do as it has been doing the last decade. They will selectively prosecute individuals who will not create a stir among the general public, and people like Ken Lewis and Kenny Rogers will continue to live their lives with the realization that the Feds will never touch them with a 10 foot pole. It may not be fair, but that's life in America today.

Hartley Henderson

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