Black Friday Updates – DOJ Responds to Dismissal Motions and SunFirst Shut Down

In the past week, more developments have unfolded in regards to both the Black Friday indictments and SunFirst Bank.  First, the DOJ have submitted their rebuttal to Chad Elie and John Campos’ dismissal motions.  Next, SunFirst Bank has been shut down by Utah regulators and a new bank setup in its place.

The DOJ accused online poker of being gambling and has ties to organized crime.

Government Claims Poker is Gambling and Online Poker Tied to Organized Crime

The US Department of Justice filed a their rebuttal on Friday to the dismissal motions by Chad Elie and John Campos for their parts in the Black Friday indictments.  The government contends that the two knowingly and willingly abused the US financial system in helping online poker companies do business in the US.

In addition, the Government contended that poker is the equivalent to gambling and has always been publicly accepted as such.  Furthermore, they contend that other forms of gambling, such as sports betting, involve a human element as well and poker is similar to other games in that regard.

Next, the DOJ contends that members of the American Mafa, aka La Cosa Nostra, have been tied to the online poker companies.  Apparently a member of the mafia was sent to try and collect on money that Chad Elie had stolen from the companies.  This is the first time that legitimate ties to the mafia have been suggested to online poker since the beginning of the indictments.

One of the more serious implications in the brief is the DOJ’s contention that Congress never intended to exclude poker from the UIGEA.  They claim that the wording of the bill was changed from including games “predominately subject to chance” to “subject to chance.”  Poker is indeed subject to chance, and as such would fit under the bill.

A judge has not ruled yet regarding the motions by Chad Elie and John Campos.  Odds are that the judge will side with the DOJ and the proceedings against the two will proceed.

SunFirst Bank Shut Down

SunFirst Bank, the bank that processed over $200 Million in payments for online poker companies prior to Black Friday, was shut down by Utah regulators this past Friday.  The bank had been facing financial trouble in the past year and had been facing increasing legal troubles.

The Utah Department of Financial Institutions shut down the troubled bank on Friday and named the Financial Deposit Insurance Corporation as receiver.  The FDIC immediately entered a purchase and assumption agreement with Cache Valley Bank that would allow depositors of SunFirst to continue banking, but under the Cache Valley Bank name.

In addition to troubles connected to Black Friday, the bank also had troubles stemming from their involvement with Jeremy Johnson.  Johnson was sued by the Federal Trade Commission for fraud in a scam where people would sign up for information on money making schemes and then get charged for other services they never agreed to.  Johnson is also the person who introduced Chad Elie to John Campos.

From the looks of the above, Chad Elie and John Campos are in for a long legal fight.  Fortunately, the customers of SunFirst Bank will not have to suffer due to the agreement between the FDIC and Cache Valley Bank.  In regards to matters surrounding Black Friday, we will bring you more on those as they develop.

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