Member of Costa Rica-based online poker site pleads guilty

May 24, 2011

Bradley Franzen, one of the 11 men sought by the U.S.’s Federal Bureau of Investigation (FBI) for his involvement in Costa Rican-based online gambling operations, pleaded guilty Monday to charges of conspiracy to commit money laundering, bank fraud and operating of an illegal gambling business operation. Franzen will be sentenced on August 26 and faces up to 30 years in prison for the charges.

On May 6, the Judicial Investigation Police (OIJ) raided the Costa Rica offices of Absolute Poker, the online site that Franzen helped operate, as well as the office of PokerStars, which is housed in Santa Ana, west of San José. The raids by the OIJ, as directed by the Prosecutor’s Office, followed an April 15 indictment issued by Preet Bharara, U.S. Attorney for the Southern District of New York, and Janice Fedarcyk, assistant director-in-charge of the New York Field Office of the FBI.

On April 15, deemed “Black Friday” by online gambling operators, the U.S. Attorney’s Office announced the indictment of 11 defendants, including the founders of Absolute Poker, PokerStars and Full Tilt Poker, the three largest online poker companies in the U.S. The indictment also ordered the closure of 75 bank accounts and the five Internet domain names associated with the websites.

Of the 11 men named in the indictment, four were presumed to be tied to or living in Costa Rica, including Scott Tom, Brent Beckley, Franzen and Ira Rubin.

During the late 90s and early 2000s, the online poker industry exploded, raking in billions of dollars annually, particularly in the U.S. In 2006, however, the industry was altered when the U.S. enacted the Unlawful Internet Gambling Enforcement Act (UIGEA) on Oct. 13, 2006. The UIGEA made it a federal crime for gambling businesses to “knowingly accept” most forms of payment “in connection with the participation of another person in unlawful Internet gambling.”

On Monday, Franzen confessed to creating fraudulent websites and “shell companies” to continue to receive gambling funds from U.S. players. He also confessed to processing millions of dollars illegally during the last five years.

Read the U.S. government’s indictment of the online poker executives here:

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