Seized Arizona CU In Middle Of Online Poker Betting Scandal
MESA, Ariz. – NCUA, which had been monitoring unusual financial activity for months at Vensure FCU, took over the $4.7 million credit union Friday afternoon after the Justice Department seized accounts at the credit union and 31 banks used to clear billions of dollars in illicit online poker bets.
NCUA’s acted after authorities in New York unsealed an indictment against the founders of the three largest internet poker companies operating in the U.S., Full Tilt Poker, Absolute Poker and PokerStars.com, for which Vensure FCU had been clearing as much as $25 million a day in Internet bets, sources told the Credit Union Journal.
Under the indictment, restraining orders were issued against an account at Vensure held by Trinity Global Commerce Corp., an entity purportedly owned by PokerStars.com, which was the single largest depositor at the credit union.
Accounts were also seized at dozens of other banks, including Citibank, Bank of America, Sunfirst Bank in Utah, Mutual Of Omaha Bank, Mercantile Bank, First Tier Bank, Marshall & Ilsley Bank, Comerica Bank, and several overseas banks in France, Germany, the Netherlands and elsewhere.
Two of the 11 individuals named in the indictment were arrested on Friday morning in Utah and Nevada. Federal agents are apparently working closely with Interpol in order to capture the other defendants, most of whom are currently located overseas. Manhattan US Attorney Preet Bharara said in a statement: "These defendants concocted an elaborate criminal fraud scheme, alternately tricking some US banks and effectively bribing others to assure the continued flow of billions in illegal gambling profits. Moreover, as we allege, in their zeal to circumvent the gambling laws, the defendants also engaged in massive money laundering and bank fraud.”
Vensure was one of two credit unions taken over Friday by NCUA, which later took under conservatorship the one-time $2 billion Texans CU, struggling under the weight of tens of millions of dollars of troubled member business loans.
The case of Vensure FCU is a strange one. The credit union was chartered in 1955 as Grand Adirondack FCU in upstate New York. With less than a million in assets it moved to Arizona just last year to purportedly serve a company called Vensure Employer Services, that provides outsourcing in payroll, human resources, benefits and other areas. But sources indicate that field of membership was just a front and the main purpose of the credit union was to clear online poker bets that were illegal in the U.S. In fact, by the time NCUA took over the credit union it had built a profitable business, earning more than $590,000 last year on just $2.7 million in assets–without a single loan–while operating as a “virtual” credit union, with no physical assets.
Representatives of the credit union could not be reached to comment and a voicemail at the credit union referred all calls to NCUA.