Forfeiture Fraud

Friday, June 17th, 2011

Working with the feds, the Anne Arundel County, Maryland, Police Department set up a fraudulent payment processing business for online poker players. They then took the players’ money, under false pretenses, and deposited it in the federal government’s asset forfeiture fund. Complaining players, none of whom were ever charged with a crime, were told they’d have to try to recoup their losses from the poker sites, which of course have now had their assets seized in a separate federal investigation, and which never actually saw the money from these particular players, anyway.

Under federal “adoption” policy, any local police department working with the federal government in a criminal investigation gets to keep up to 80 percent of the property it seizes in that investigation. And once the feds get involved, the whole thing officially becomes a federal investigation, which allows local police departments to skirt state laws aimed at protecting citizens from forfeiture abuse.

In this case, the Anne Arundel Police Department bagged $30 million seized stolen from online poker players. They celebrated with a press conference and oversized novelty check. They’ll use the money to buy some cool new police equipment. Let’s hope it’s for more SWAT gear, so they can feel a bit safer the 150 times each year Anne Arundel County SWAT teams are deployed, most of the time to serve search warrants that result in misdemeanor charges.

I love the line from the U.S. Attorney’s Office in Baltimore: “The government is not going to give the money to gamblers.” Except for the working stiff who finally wins $100 after spending $500/month on the state lottery for 10 years. Then the government will gladly give money to gamblers. Because they know they’ll get it right back.

(Via Amy Alkon)

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34 Responses to “Forfeiture Fraud”

  1. #1 |  Mario | 

    I know you frown upon this kind of sentiment, so I’ll be as oblique as possible. Back in the Old West, when there was a different breed of poker player, I’m pretty sure I know what would have happened to anyone who stole a man’s gambling money.

  2. #2 |  Marty | 

    I can’t even begin to wrap my head around this scam. $30,000,000!!! I’d love to know what the average losses were and the demographics of the scammees. You’d think a few cops/prosecutors/judges/politicians/connected assholes would’ve been taken, also. I wonder if they’re more apt to recover their money…

  3. #3 |  PeeDub | 

    I know what would have happened if the cheat was the one with the bigger, quicker gun.

  4. #4 |  Tom | 

    I live and work in PA. We have Gus the Groundhog as our lottery’s mascot.
    I attended a conference years back where they lamented the fact that alcohol and tobacco companies used animals like Joe Camel and Spuds MacKenzie to market their products to kids.

    I brought up whole Gus the Groundhog thing, and they said, “It’s different because the lottery helps older Pennsylvanians”

    Whatever.

  5. #5 |  Highway | 

    I can’t begin to even fathom how vile this is. It’s outright theft. And it’s justified with smugness and handwaving “Oh, what people were doing is illegal”.

  6. #6 |  Cyto | 

    Wow, this may be the most impressive story yet. An actual scam to steal money from large numbers of citizens run by the government – proudly!

    This has the added twist of being a pre-crime seizure – like the “he could have used the money to buy drugs” asset forfeiture. In this case they didn’t seize illegal winnings, they seized money being transmitted to a payment processor (for later retransmission to a betting site). So this money is not proceeds of illegal activity, which is the normal seizure rationale.

  7. #7 |  Cyto | 

    Wow, this may be the most impressive story yet. An actual scam to steal money from large numbers of citizens run by the government – proudly!

    This has the added twist of being a pre-crime seizure – like the “he could have used the money to buy drugs” asset forfeiture. In this case they didn’t seize illegal winnings, they seized money being transmitted to a payment processor (for later retransmission to a betting site). So this money is not proceeds of illegal activity, which is the normal seizure rationale.

  8. #8 |  SJE | 

    Anne Arundel is (or will be) home to the first slot machines in MD, as well as the State Govt. This is just like any others numbers racket, and keeping rivals off your turf.

  9. #9 |  Bob | 

    WHAT THE FUCK?

    Let me get this straight… the Feds, in association with local police, set up and operated a scam that netted 30,000,000 dollars in citizen’s money? And the local police is going to use their cut to further fund their criminal empire?

    Do I have that right?

    What’s next? Set up a website that claims to sell goods at low cost, but then just keeps your money because the stuff was stolen?

  10. #10 |  Greg | 

    Wow, this may be the most impressive story yet. An actual scam to steal money from large numbers of citizens run by the government – proudly!

    Pathetic isn’t it? Predictable as sunrise when this whole ‘forfeiture’ racket was started, but the generally retarded “good citizens” thought we should take them thar ill gotten gains no matter hows da goverment duz it.

    Even as a white dude, see what happens if you are pulled over and searched on your way to buy a car. You’ve got 30K cash in a briefcase to do a standard, legal transaction that is done thousands of times everyday in this country. But, if you don’t have friends who are in positions of power to call, you’ve just gotta be doing a drug dealer and we’ll be taking that cash.

  11. #11 |  EH | 

    In b4 the taxation rants.

  12. #12 |  DarkEFang | 

    I have to give them credit. Every time I think I’ve heard the most fucked up story about law enforcement, some department steps up and does something slightly more outrageous. The best I can tell, they committed bank fraud, wire fraud and computer fraud, especially considering no charges were filed – no doubt because there are no charges that would hold up in court.

    I mean, when law enforcement murders dogs and shoots unarmed people, they justify it with “I was in fear of my safety.” In this case, their justification is “They’re gamblers, so fuck ‘em.”

  13. #13 |  Mannie | 

    Gamble with the Mafia. They are honest.

    It will never be done because of the power of the Criminals’ Union, but the way to stop this locally, is to prohibit all local agencies from accepting any outside money without City Council direct approval, and reducing their budgets by the amount of the grant.

  14. #14 |  Random Guy on the Internet | 

    The ultimate in nanny-statism. “protecting” us from ourselves.

    “That’s money people need to feed their families, we can’t risk them losing it on a poker site”. Better they lose it to seizure.

    The whole situation reeks. Hope you get your money back from Full Tilt soon, Radley.

  15. #15 |  varmintito | 

    Wow. Beyond the sheer criminality, I’m trying to figure out how the hell a local police department justifies operating outside its territorial jurisdiction — presumably the ripped off gamblers were not all located in Anne Arundel County.

    I am a bit rusty on my internet jurisdiction, but it is possible that non-Maryland residents could file civil actions against AA county in federal court where they live. If so, I bet this scam would cease once AA county was forced to defend hundreds of lawsuits across the country.

  16. #16 |  Steve Verdon | 

    Radley,

    Serious question…..

    How the Hell can you think there are still good cops out there?

  17. #17 |  Dr Duck | 

    @3 “I know what would have happened if the cheat was the one with the bigger, quicker gun.”

    With guns, quicker beats bigger every time. (-:

  18. #18 |  Difster | 

    What can I even say here? I am rarely stunned by the things government does anymore but THIS! Holy Crap! It’s a whole new level.

  19. #19 |  Erik | 

    For some local coverage of the operation (called “Operation Texas Hold’em”):
    http://www.hometownannapolis.com/news/TOP/2011/06/02-29/County-bags-500-000-from-gambling-case.html

    Looks like AACPD got $470,000 and the “Maryland State Police also participated in “Operation Texas Hold’em” and will likely receive a check as well though Winter did not know how much or when.”

  20. #20 |  J.S. | 

    “How the Hell can you think there are still good cops out there?”

    Because if one dares say otherwise, you’re a “cop-hater”, pot smoker dopehead or bitter loser anarchist who hates authority.

  21. #21 |  Law enforcement steals $30 Million from citizens - INGunOwners | 

    […] the money to order a big gag check, hold a presser, and snap some photos for their adoring fans. Forfeiture Fraud | The Agitator Police Celebrate Seized Online Gambling Funds So I have to ask, what is worse for the public? The […]

  22. #22 |  Mario | 

    I went over to Amy Alkon’s site, and I just have to share with the folks here the best comment from her readers:

    The incompetent officer I deal with most frequently will be getting a huge pension that I will be paying for at 90 by working in a donut shop.

    It’s a racket.

  23. #23 |  croaker | 

    This is the very definition of chutzpah.

    Got rope?

  24. #24 |  Aresen | 

    This makes me glad that I deal directly with a local illegal bookmaker and pay him up front. His percentages are honest and he always pays me off when I win.

  25. #25 |  Nando | 

    From what I understand, the provisions of the Unlawful Internet Gambling Act of 2006 “prohibits gambling businesses from knowingly accepting payments in connection with the participation of another person in a bet or wager that involves the use of the Internet and that is unlawful under any federal or state law.”

    So, if the “players”, those who’s money was stolen, did nothing illegal (it’s not illegal for you to gamble, only for the processing centers to process the payments), then how is it they cannot sue for their money? Will the gov’t claim they seazed it from the processing center and not from the people themselves? Is that how they get around it?

  26. #26 |  John | 

    “Radley,

    Serious question…..

    How the Hell can you think there are still good cops out there?”

    Cops serve a very important function: they enforce the laws. Without them we really would have chaos, life that is “nasty, brutish, and short.” I really wish that Radley and his like would write about the good cops too on occasion, so that people like you, Steve Verdon, don’t think that none exist. It is unfortunate that the misbehavior of a few will cast such a long shadow on a whole organization, which is so crucial to any civilized living.

  27. #27 |  Bob | 

    John:

    …I really wish that Radley and his like would write about the good cops too on occasion,…

    You mean the “good cops” that stand there picking their nose when their fellow cops assault people and lie through their teeth on reports? Those “good cops”?

    A serious problem isn’t with the actual cops themselves, it’s the “Police Culture”. A culture where “good cops” who rat on the blue line are targeted for harassment by their peers and superiors.

    As such, a “good cop” that wants to keep his job is one who quietly does their job.

    I don’t think anyone but the most frothing anarchist wants to actually disband all police, they serve an extremely useful function. Just that transparency and accountability are in order. That includes questioning the whole “Executing search warrants on non violent persons with extreme force” as in SWAT raids.” and the “Police Culture” itself.

    But all of that is way out of the hands of individual cops. As such, there are three kinds of cops… bad cops taking advantage of the situation, quiet cops who turn a blind eye for their own protection, and truly “good cops” who speak out and are crushed by the Police Culture. As such, there are no good cops left.

  28. #28 |  perlhaqr | 

    Bob: I presume John was being sarcastic.

  29. #29 |  sigh | 

    “I really wish that Radley and his like would write about the good cops too on occasion,”

    And I wish the good cops would stop pretending that there are no bad cops, and that everyone who gets beaten, robbed, killed, and wrongly imprisoned simply must have had it coming because cops would never do such a thing without cause.

    I have a lot of friends in law enforcement circles; the only time any of this stuff even shows up on their radar is when it gets national headlines. They don’t even seem to be aware of the problem.

  30. #30 |  JOR | 

    “Without them we really would have chaos, life that is “nasty, brutish, and short.””

    Except that, before we had them, laws still got enforced (for better and worse), and life was no more ‘nasty, brutish, and short’ than can be accounted for by purely technological or cultural differences (people simply respect the lives, privacy, and physical comfort of their neighbors more than they did hundreds of years ago).

  31. #31 |  albatross | 

    John:

    This is sort-of the nature of news reporting, though, isn’t it? Millions of people go to work, go to school, and go home to their families in relative peace, and get no mention on the news. Occasionally, some nut gets a gun and shoots up his office, school, or home, and he makes front-page news for a week.

    I would love to see good data on how common these abuses are, and my understanding is that it’s often hard to get those numbers. (Note the need for SWAT raid transparency bills.) Certainly, it’s hard to work out how often the police get away with beating someone up for mouthing off, since they’re only going to be charged with anything if there’s some external evidence. The fact that two states are actively prosecuting people for videotaping policemen suggests rather strongly to me that, at least in those states, serious police misconduct must be quite common. Otherwise, why bother trying to frighten citizens out of recording it?

  32. #32 |  supercat | 

    #31 | albatross | June 19th, 2011 at 1:49 am “I would love to see good data on how common these abuses are, and my understanding is that it’s often hard to get those numbers.”

    IMHO, it doesn’t matter how common they are today. The fact that bad conduct is widely seen to have no consequence virtually guarantees that if it isn’t yet a problem, it WILL become one, unless a bona fide effort is made to crack down on bad conduct.

  33. #33 |  plutosdad | 

    The easiest way to stop these abuses is to not allow police departments to get any money seized, or even money from fines. That is the only way to stop any temptation that causes them to go after what makes them the most money, instead of what is the greatest harm to society.

    How did we even get on board with this? I thought this – police and tax collectors getting part of the take on taxes and fines, was the ultimate example of government corruption and theft from the people? From the Sheriff of Nottingham, to Matthew the Tax Collector, to police today, we see government appointees finding any way they can to take money from The People, in the name of The People, all protected by The Law.

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