Citadel, FirePay asset seizures pay out for the DOJ

DOJ approaches climax with UIGEA in wings

By Burke Hansen in San Francisco • Get more from this author

Posted in Law, 20th May 2007 18:39 GMT

Understand how application security is evolving

House of Cards The US Department of Justice (DOJ) continued its orgy of online gambling asset seizures this week, issuing seizure warrants for $9.25 mil from Citadel Commerce and $4.2 mil from FirePay.

Both companies are Canadian, and neither is currently taking money from American gamblers. The fact that both companies have already withdrawn from the US market, at least as far as servicing the online gambling world goes, is irrelevant for the DOJ. Criminal statutes of limitations being what they are in the US, people all over the globe could well find themselves in hot water for years with American authorities.

The Citadel funds had originally been frozen late last month at the behest of some of its payment processors, the company had let out then in an unusually brief and uninformative press release, but the DOJ took it one step further this week by formally taking control of the funds in question.

This is the latest in a string of DOJ legal actions against the rather murky payment processing segment of the internet gambling industry, and, if nothing else, it demonstrates a renewed determination on the part of the DOJ to prosecute those connected to the online gambling world in the face of mounting criticism at home. Although two online gambling bills have been introduced in Congress the last few weeks – one by Rep. Barney Frank seeking outright repeal and regulation, and one by Rep. Berkley proposing a year-long study of the industry – the prohibitionist instinct at the DOJ appears to be alive and kicking.

Of course, as anyone who follows the DOJ knows, federal investigations take their sweet time producing fruit, and the DOJ typically does not just drop investigations; there could be any number still in the pipeline, ripening up. The busts in Utah last week are just a fragment of far-flung prosecutorial activity that will keep a small army of white-collar law and order types in cozy desk jobs for years to come.

Neteller, Citadel, FirePay, CurrenC – these are in the run up to the UIGEA, which actually takes effect next month.

Even the DOJ knows this: whatever happens then, illicit payment processing will go on, and the cat and mouse game between the processors and the DOJ will continue.®

Burke Hansen, attorney at large, heads a San Francisco law office

Understand how application security is evolving