Black Friday processor pleads guilty, agrees to cooperate with probe
Payment processor Bradley Franzen faces up to 30 years behind bars after becoming first of 11 accused in Black Friday indictments to enter guilty plea.
A payment processor yesterday admitted in federal court to helping PokerStars, Full Tilt and Absolute Poker circumvent laws banning the processing of online gambling payments in the US and deceiving banks as to the nature of the transactions.
Bradley Franzen, a resident of Illinois and Costa Rica, pled guilty in the New York District Court in Manhattan yesterday to criminal charges of conspiracy to commit bank fraud, conspiracy to commit money laundering and operating an illegal gambling business.
If convicted, Franzen could spend up to 30 years in prison, but has entered a plea agreement which recommends leniency at his sentencing on 26 August if he cooperates with federal prosecutors. Franzen is understood to have agreed to testify at any trial arising from a government prosecution of Stars, Tilt or Absolute Poker.
Franzen was among 11 people indicted on Black Friday when federal prosecutors accused the poker companies’ founders, the companies themselves and associates including Franzen into allegedly tricking banks and financial institutions into illegally processing US$3bn in payments. An accompanying civil complaint is seeking the forfeiture of at least this amount in money laundering penalties from the three companies and the defendants.
The indictment unsealed on 15 April accuses the companies, via third-party payment processors including Franzen, of fraudulently arranging for “the money received by US gamblers to be disguised as payments to hundreds of non-existent online merchants purporting to sell merchandise such as jewelry and golf balls.”
Franzen was quoted in the Washington Post yesterday as telling the court: “To avoid bank restrictions, they [the poker companies] used shell companies and phony websites,” admitting that he had illegally helped the poker companies establish these critical links between their businesses and the banks.
The 41-year-old admitted in court that “millions of dollars” had been processed with his help, but told magistrate judge Kevin Fox that didn’t know the exact amount.