John Campos and Chad Elie File Motions for Dismissal from Black Friday Charges
Two individuals facing charges from Black Friday, John Campos and Chad Elie, filed motions on Friday to be dismissed from the case against the United States Department of Justice. The two allege that poker is exempt from US law. Details inside.
On April 15th, or “Black Friday” as it is known in the poker world, the United States Department of Justice indicted several individuals involved with the three largest online poker companies at the time- PokerStars, Full Tilt Poker, and UB/Absolute Poker. Those who were charged either had managerial positions with the poker rooms themselves, or helped facilitate transactions between the sites and their customers in the United States.
John Campos and Chad Elie are two of the individuals who were charged for having facilitated these transactions. Campos was the Vice Chairman of the Board and a part-owner of SunFirst Bank (a privately owned Utah-based bank). A percentage of SunFirst Bank was allegedly purchased by Chad Elie and others for the purpose of processing payments to and from online poker sites. Elie himself is identified within the indictments as one of the “payment processors” who allegedly lied to banks about the nature of certain financial transactions.
On September 30th, both Campos and Elie filed motions to be dismissed from all of the charges they are facing. Of the 9 counts in the indictment, Campos is listed as a defendant in 6, and Elie is a defendant in all 9.
One argument made in both motions is of significant interest to poker players- that because the indicted sites only offered poker, the sites are not clearly defined as “gambling businesses" according to US law. The idea that poker is a game of skill, rather than luck, is argued as well.
See the Motions:
• Introduction to the Campos Motion
• John Campos' Motion Addressing All Counts
• Chad Elie Motion Part 1 - Addressing Counts 1, 2, 3 and 4 (UIGEA Charges)
• Chad Elie Motion Part 2 - Addressing Counts 5, 6, 7 and 9 (IGBA Charges)
• Chad Elie Motion Part 3 - Addressing Count 8 (Conspiracy to Commit Bank Fraud and Wire Fraud)
The John Campos Motion
John Campos’ motion begins with a list of the charges he is facing (conspiracy to violate UIGEA, 2 counts of violating UIGEA, 2 counts of operating an illegal gambling business, and money laundering conspiracy) followed by a summary of his arguments:
The UIGEA charges must be dismissed because they ignore the clear exemption from prosecution set forth in UIGEA for financial transaction providers such as Mr. Campos. Additionally, the UIGEA counts must be dismissed because they fail to allege any person who as a matter of law can constitute the person “engaged in the business of betting or wagering” required by the statute.
The IGBA charges (and the money laundering charges based on them) must also be dismissed because two basic elements of the statute are not sufficiently alleged in the Indictment: that the companies in question were “gambling businesses” and that the businesses were “conducted” in a State or political subdivision of the United States.
Further, both the UIGEA and IGBA charges must be dismissed as unconstitutionally vague as applied to Mr. Campos. Moreover, criminal prosecution of the conduct alleged here would violate the rule of lenity.
Campos attempts to show a difference in legal standing between companies that host peer-to-peer games where players compete against each other and companies that participate in games as a casino or bookmaker.
UIGEA Charges
He presents the following 4-part argument for the dismissal of UIGEA accounts:
First, under the UIGEA statute, a “financial transaction provider” such as SunFirst Bank on whose behalf Mr. Campos acted as a director and agent is expressly exempt from criminal prosecution. Second, the poker companies were not “engaged in the business of betting or wagering” as required under the statute and the UIGEA counts are therefore legally insufficient on their face.
Third, the statute’s application to poker as a “game subject to chance” is unconstitutionally vague. See infra Section V. Fourth, under the rule of lenity any uncertainty regarding the scope of UIGEA must be resolved in the defendant’s favor. See infra Section VI.
IGBA Charges
The argument for dismissal of IGBA charges is also in 4 parts:
First, online poker does not constitute “gambling,” as that term is used in IGBA. Second, the online poker companies are not businesses “conducted” in New York or any other State or political subdivision, as required by IGBA.
Third, IGBA is unconstitutionally vague as applied to the defendants’ conduct. See infra Section V. Fourth, under the rule of lenity any uncertainty regarding the scope of IGBA should be resolved in favor of the defendant. See infra Section VI.
This is a significant challenge to the way the United States Department of Justice has interpreted certain laws, and more specifically it is a challenge to the way they view poker with respect to those laws. The complete motion containing all arguments can be found in the link list towards the top of this page.
The Chad Elie Motion
Chad Elie's motion is substantially longer than Campos' because he faces all of the charges Campos does as well as 3 additional ones. The 3 are violation of UIGEA (re: Absolute Poker), operation of an illegal gambling business (Absolute Poker), and perhaps the most significant charge- conspiracy to commit bank fraud and wire fraud.
The motion contains much of the same language as in Campos' motion on charges that they each face. The same 4-part argument for dismissal from UIGEA charges is repeated here. Again, the case is made that "UIGEA is void for vagueness as applied to online poker."
Similarly, when arguing for dismissal from IGBA charges, the same 4 arguments that Campos's motion had made are reused- but in Elie's motion a 5th one is included as well:
IGBA requires the government to show a predicate state law gambling offense, but the Indictment's allegations regarding the defendants' New York State law violations are insufficient.
Conspiracy to Commit Bank Fraud and Wire Fraud Charges
The third part of Elie's motion addresses a charge that Campos doesn't face at all- conspiracy to commit bank fraud and wire fraud. This charge was Count Eight of the original Black Friday Indictment.
The argument made is that the Indictment doesn't "charge any substantive wire or bank fraud offense against any defendant, and the purported bank/wire fraud conspiracy charged in Count EIGHT does not allege that any defendant sought to cause economic injury to any bank or that any bank suffered any actual harm." In fact, the motion concludes that banks had only profited from the transactions in question.
The motion alleges that because the defendants did not intend to cause harm to a bank, and did not actually cause harm to a bank, that the conspiracy to commit wire fraud charge doesn't hold water.
With respect to bank fraud, the motion states that count eight doesn't even charge a bank fraud conspiracy. According to the document, in order to charge bank fraud an indictment must allege either a scheme to defraud a financial institution or to obtain funds under the custody or control of a financial institution via fraudulent means.
The argument continues by alleging that the precedent in the Second Circuit is that bank fraud can only be committed intentionally, and that in this case none of the defendants intended to cause any harm to any banks.
PokerStrategy.com will continue to keep you informed of any developments on this situation.
by Matt Kaufman
