Citadel funds seized

[yahboohoo]

Casino City Times article

Citadel funds seized
By Aaron Todd
18 May 2007

The U.S. Department of Justice has seized $9.25 million in funds from Citadel Commerce, a third-party payment processor that had previously allowed U.S. residents to conduct financial transactions with Internet gambling companies. The Canadian-based company stopped processing U.S. gaming transactions in January, almost immediately after its competitor, NETeller, withdrew from the U.S. following the arrests of its two cofounders.

Another Canadian-based processor, FirePay, announced earlier this week that they have received seizure warrants from the DOJ for about $4.2 million in gaming-related funds. FirePay stopped accepting U.S. gaming transactions following the adoption of the Unlawful Internet Gambling Enforcement Act in October.

Citadel had announced in late April that these funds had been frozen by one of its financial transaction processors.

In a separate indictment this week, three payment processors and seven individuals have been accused of miscoding gaming transactions and funneling money to online casinos and sportsbooks. BetUS has been charged with conspiring with the payment processors.

[poorolrich]

And it goes on and on and on!!!!!!!!!!!!!!!!!

[Izzy Vega]

How can US Department of Justice seize funds from a Canadian based processor?

[Roman]

this as bad as it sounds?

[Izzy Vega]

If i remember correctly Citadel stopped taking US transaction back in January. Im sure the seized funds are 'online sport book' related.

I still dont understand how the DOJ can seize funds from canadian company. Unless the canadian government assisted.

Skall maybe you can help. If a company in say Ethopia acts as a third party processor between US residents and a Poker site, the US government can then go to ethopia and seize that company's funds?

[counthomer]

From the Citadel press release:

Vancouver, BC, May 14, 2007 -- ESI Entertainment Systems Inc. (“ESI”) (TSX: ESY) and Citadel Commerce Corp, a wholly owned subsidiary of ESI, today announced that further to the press release dated April 27, 2007 concerning the US$ 9.25 million Merchant Reserve Funds frozen by its processor in the USA, these funds have now been seized by the U.S. Department of Justice (DoJ).

All of these funds are Merchants’ Reserves related to internet gaming except for approximately US$ 941,000 of Citadel’s own capital. The company is continuing to work with the DoJ through its legal counsel to resolve the situation.

[Izzy Vega]

Evermind Skall. Question anwsered. The funds were frozen by a US processor than seized by the DOJ.

[counthomer]

Izzy, the press release clearly states that the funds were seized here (in the US).

A more valid question that could be asked is that since this explains the disappearance of payment options such as eChecks, why have the gaming companies not been very forthcoming with this information?

[yahboohoo]

[ QUOTE ]
A more valid question that could be asked is...why have the gaming companies not been very forthcoming with this information?

[/ QUOTE ]
Rhetorical answer: To save their own asses.

[counthomer]

I'm amazed this hasn't received more attention, but then I guess no individual has been financially harmed.

We have several gaming companies (could be poker ones, but who knows) who have had their funds seized in the US. To my knowledge this is the first time this has happened, and a major statement of intent by the DoJ.

To my knowledge not one of these has come forward to state that they are companies involved, so basically these operators have effectively absorbed this loss quietly to avoid any panic.

At the same time we have had the loss of all Citadel related payment options, again without any official statement.

If anything shows the attitude of (some) of the operators in the current climate then this news is it.