In January and February of this year, after a two-year investigation, the IRS seized about $14.2 million from JBL Services, according to court documents filed in federal court in Baltimore. In July, it seized about $9.87 million from Zip Payments.
According to court documents filed in the U.S. District Court in Baltimore, Md., last month, Edward Cordy transmitted money on behalf of Zip Payments and Michael Garold transmitted money on behalf JBL Services.
Courdy is charged with transferring just over $2.38 million in April from Dublin to a Nevada State Bank account held by Zip Payments, and from there to Maryland and elsewhere for the purposes of conducting an illegal gambling business. Garold is charged transferring nearly $1.5 million from Frankfurt, Germany to a bank in Georgia held by JBL Services, and from there to Maryland and elsewhere for the purposes of conducting an illegal gambling business.
In July, Bodog said the seizures didn't affect business for the popular gambling site.
During the course of the investigation, IRS Special Agent Randall Arrow became intimately familiar with the ways the online online gambling handled paying their customers.
"Not one single player failed to get paid when this processor (JBL Services) was disrupted," said Alwyn Morris, chief executive officer of Morris Mohawk Gaming Group, which assumed ownership and operation of Bodega in North America in mid-2007.
"To continue to make 'payouts' to gamblers, some online casinos operators have begun using money processing businesses in the United States," Arrow explained. "Based on my training and experience, I know that, typically, the gambling web site operator will send a U.S. processor a check or wire transfer of a relatively large sum of money, usually hundreds of thousands or million of dollars. The processor then distributes the money to individuals, either by check or electronic transfer of some type. None of the transfers identify the money involved as gambling proceeds."
"Because of various developments (Department of Justice prosecutions and new federal legislation), it has become more and more difficult for Internet gambling web site operators to move money into and out of the United States," Arrow said in an affidavit supporting the seizures back in July.
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