[NY] PPA Statement on Southern District of NY Action Against Online Poker Players – PPA (06/09/09)

June 9th, 2009


[NY] PPA Statement on Southern District of NY Action Against Online Poker Players – PPA (06/09/09)

NEWS RELEASE For Immediate Distribution Contact: Shannon Flaherty [email protected] (202) 347-6762 PPA Statement on Southern District of NY Action Against Online Poker Players Letter Sent to Assistant US Attorney Requesting Presence at Future Hearings WASHINGTON, DC (June 9, 2009) – The Poker Players Alliance (PPA), the leading poker grassroots advocacy group with more than one million members nationwide, today released the following statement by PPA Chairman Alfonse D’Amato on questionable actions taken by a federal prosecutor in the Southern District of New York to freeze payment processor accounts containing more than $30 million in poker players’ deposits and payouts. The PPA also sent a letter to the Assistant United States Attorney for the Southern District of New York asking for an opportunity to be heard in any future warrant hearings. The letter is available at www.pokerplayersalliance.org. “The PPA is disappointed that this unprecedented action has been commenced against law abiding poker players. The payment processor funds frozen by the Southern District of New York belong to individual poker players – not operators of poker websites – and do not represent the proceeds of any gambling activity, much less illegal gambling activity. This money should be immediately released by the Southern District to ensure that player payouts are not further disrupted. To that end, the PPA is coordinating a legal strategy to appropriately protect PPA members who are impacted by the Southern District’s actions. Further, the PPA has contacted the affected poker websites and has been informed that deposit and payout issues of players are being addressed and will be fully satisfied.” “There are many legal issues that question the merit of the Southern District’s actions. Of greatest concern is that, in at least two cases, these actions were taken without first obtaining a seizure warrant. Seizure of money without judicial authority and litigation tactics inconsistent with previously stated Department of Justice policy appear to be the type of conduct that the Department has recently committed to change. Accordingly, the PPA on June 8th wrote to the prosecutor in charge of the matter and raised appropriate challenges and constitutional concerns with the actions taken to date. “We are also concerned that the Southern District has selectively taken action against online poker when the current law regarding the activity is far from clear, and policies from various levels of government are inconsistent at best. In fact, no federal or state court has ever found a payment processor or a player accessing an Internet poker site to have violated the federal laws alleged by the Southern District in this case. “For more than three years the PPA has advocated for a clear US policy, established through licensing and regulating skill games like peer-to-peer Internet poker. The PPA remains committed to legislation that creates a clear regulatory framework and we will continue to pursue every legal course available to ensure that in this instance poker players’ funds are not seized and their right to play online poker is protected.” About The Poker Players Alliance The Poker Players Alliance (www.pokerplayersalliance.org) is a nonprofit membership organization comprised of over 1,000,000 online and offline poker players and enthusiasts from around the United States who have joined together to speak with one voice to promote the game and to protect poker players’ rights.

PPA Letter to Mr Arlo Brown (06/08/09)
Headquarters: 1325 G Street NW, Suite 500 Washington, DC 20005 202.552.7431 office 888.448.4PPA toll free 202.552.7423 fax [email protected] June 8, 2009 VIA FACSIMILE and ELECTRONIC MAIL Arlo Devlin-Brown Assistant United States Attorney Southern District of New York One St. Andrew’s Plaza New York, NY 10007 Fax: (212) 637-0097 E-mail: [email protected] Re: Allied Systems, Inc. Dear Mr. Brown: We have been advised that your office recently instructed three banks — namely, Citibank, N.A. (“Citibank”), Goldwater Bank (“Goldwater”), and Alliance Bank of Arizona (“Alliance”) — to treat as “seized” all funds in accounts maintained by Allied Systems, Inc. (“Allied Systems”) pending a forthcoming order of seizure. Because the funds in those accounts belong to members of Poker Players Alliance (“PPA”),1 PPA has standing to be heard in the above-referenced matter and hereby requests notice and the opportunity to be heard. See United States v. Comprehensive Drug Testing, Inc., 513 F.3d 1085 (9th Cir. 2008). The PPA is the leading poker grassroots advocacy group with more than one million members nationwide dedicating to protecting the rights of the poker playing community. We understand that letters issued to Goldwater Bank and Alliance state clearly that the United States Attorney’s Office for the Southern District of New York has initiated the process of obtaining a seizure warrant for assets in accounts held by Allied Systems. Presumably, your office has initiated such proceedings in accordance with 18 U.S.C. § 981(b), which provides that seizures thereunder are to be made pursuant to a warrant obtained in the same manner as provided for a search warrant under the Federal Rules of Criminal Procedure. Rule 41, in turn, permits the ex parte seizure of personal property based on probable cause so long as the seizure is otherwise constitutional. Your office secured a warrant for seizure of a competing processor for the same industry in San Francisco. But your decision to sidestep the warrant requirement as to Allied Systems’ bank accounts in Los Angeles and Arizona — accounts which concern the same account holder and, 1 The Poker Players Alliance (www.pokerplayersalliance.org) is a nonprofit membership organization comprised of over 1,000,000 online and offline poker players and enthusiasts from around the United States who have joined together to speak with one voice to promote the game and to protect poker players’ rights. www.pokerplayersalliance.org Headquarters: 1325 G Street NW, Suite 500 Washington, DC 20005 202.552.7431 office 888.448.4PPA toll free 202.552.7423 fax [email protected] presumably, the same underlying conduct — raises questions that a court should address as soon as possible. In this case, ex parte seizure of Allied Systems’ bank accounts would constitute a violation of due process because there are no exigent circumstances to justify deprivation of PPA members’ property without prior notice and a hearing. See Mathews v. Eldridge, 424 U.S. 319, 335 (1976); United States v. James Daniel Good Real Property, 510 U.S. 43 (1993). The AUSA’s oral instructions to Citibank, and written instructions to Goldwater and Alliance demonstrate that the Government effectively has already seized PPA members’ property. Indeed, the AUSA has strictly prohibited the banks from processing any transactions on the relevant accounts. The AUSA’s freeze order renders the accounts illiquid and immobile such that the possibility of conversion is insignificant; thus, there is no basis in law or fact for the AUSA to seek ex parte seizure under Rule 41 and thereby deny PPA members’ its due process right to pre-deprivation notice and hearing. Because there are no exigent circumstances in this case to justify the ex parte seizure of PPA members’ property, we request notice and the opportunity to be heard with respect to any warrant the AUSA may seek to seize the now-frozen accounts held by Citibank, Goldwater and Alliance. The PPA will pursue every legal course available to ensure that poker players’ funds are not seized and their right to play poker online is protected. Sincerely, Executive Director for Poker Players Alliance cc: Hon. Theodore H. Katz United States Magistrate Judge Southern District of New York Daniel Patrick Moynihan United States Courthouse 500 Pearl Street New York, NY 10007-1312 www.pokerplayersalliance.org

One Response to “[NY] PPA Statement on Southern District of NY Action Against Online Poker Players – PPA (06/09/09)”

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