Daniel Tzvetkoff to Languish in Jail Until His Trial

by Lou on May 4, 2010


Daniel Tzvetkoff, an Australian national, was arrested in Las Vegas in April and charged with processing online gambling payments, which is illegal under federal law. Although he was granted bail in a Las Vegas federal court ruling, a New York Judge overturned it. Now Tzvetkoff, who is deemed a “flight risk,” will languish in jail until his trial—which could a year away, or even longer.

His attorney claims that denying him bail “…is inconceivable,” though the judge believes that with access to millions of dollars, Tzvetkoff could easily flee to avoid prosecution.

The Indictment charges Tzvetkoff with four counts, including bank fraud, money laundering, and conspiracy to operate and finance an illegal gambling business and to process electronic funds transfers in violation of the Unlawful Internet Gambling Enforcement Act of 2006. If convicted of all counts, he faces a maximum sentence of 75 years in prison.

According to the Feds, Tzvetkoff began processing gambling transactions in the United States through the Automated Clearing House system (“ACH system”) which allows money to be electronically transferred from a gambler’s U.S. checking account to an internet gambling company simply by the gambler going to the internet gambling company’s website and entering his bank account information.

More than $543 million in ACH transactions was processed between February 2008 and March 2009. Tzvetkoff also invested approximately $27 million from these ACH transactions into an online “payday loan” company that offered consumers high-interest, short term loans that typically carried an annualized interest rate of more than 500 percent.

Tzvetkoff and his co-conspirators induced US banks to provide ACH services to internet gambling companies by disguising the transactions so that they would not appear to be gambling

related. They accomplished this be creating dozens of shell companies with names unrelated to gambling—complete with phony web sites that made the companies seem legitimate—and represented to banks that the ACH transactions were on behalf of these companies.

In March 2009, Tzvetkoff stopped processing internet gambling transactions after leading internet gambling websites accused him of stealing approximately $100 million from them.

Although poker players remain free from prosecution under gambling laws, it’s a different landscape for those operating gambling concerns or moving money from site to site when it’s gambling related.

While otherwise dangerous criminals are regularly granted bail, keeping Tzvetkoff in the can until a trial that may not happen for a year seems excessive to me. If the Feds have a strong case, they should make his bail high enough so that he’s faced with the conundrum of coming back to the US to stand trial, or choosing to flee, in which case that high bail simply becomes a “fine” or “penalty” for an offense that doesn’t put the general public in danger or jeopardy, and is therefore one for which bail ought to be granted.

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