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Payment Processor Pleads Not Guilty

Payment Processor Pleads Not Guilty
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May 19, 2010 9:30 AM PDT    Text size: 
NEW YORK — Online adult processor Daniel Tzvetkoff pled not guilty to charges that he processed more than $500 million worth of illegal Internet gambling transactions.

The Unlawful Internet Gambling Enforcement Act of 2006, which comes into enforcement this June, makes it illegal to transfer funds from a financial institution to an Internet gambling site.

But 27-year-old Tzvetkoff's line of defense argues that poker isn’t gambling per se, and as such should be exempt from the UIGEA rules.

“The gambling industry is using the line that poker is not gambling, that it’s a game of skill and is therefore not gambling,” said Arlo Devlin-Brown, the U.S. assistant attorney.

Tzvetkoff faces several charges including bank fraud, money laundering and gambling conspiracy in connection with his gambling processor Intabill's elaborate processing operation, where dozens of phony offshore shell companies with names unrelated to gambling were allegedly used to facilitate transactions.

Prosecutors charge that Tzvetkoff and others disguised those gambling transactions as repayment of payday loans that consumers had taken out online, as well as transferred funds applied to pre-paid debit cards.

Tzvetkoff, an Australian citizen, was arrested in April in Las Vegas while attending a trade show. Federal prosecutors were tipped off over the Tzvetkoff's alleged activities after several online casino companies alleged that he stole $100 million of U.S. player deposits.

According to reports, the internet tycoon was once worth $1 billion, but his financial situation deteriorated. His $28 million mansion on Australia’s Gold Coast, $27 million luxury yacht, and fleet of high-end vehicles all have been either sold or put up for sale.

Tzvetkoff will be held in a Brooklyn jail until June 2011 when the trial is set, after having his bail application refused.

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