Citadel Commerce Buys Out to Avoid U.S. Prosecution

by Mira Patel, News Staff Writer

June 6, 2008

Either the U.S. is doing all they can to salvage badly needed revenue that will inevitably be paid out to an increasing number of WTO member countries seeking free trade recompense as a result of the passing of the UIGEA or U.S. officials truly are serious about trying to enforce a prohibition on payment processing companies helping U.S. citizens transfer funds for online gambling activities? Well, it's likely the answer is both.

First, allow me to catch you up on the most recent U.S. prosecution, which apparently fell under the radar. Unlike the Neteller case, in which the Neteller's two former founders were arrested and brought before a Judge, third party payment processor, Citadel Commerce, has simply been in talks with U.S. prosecutors to settle a fine agreement for knowingly processing "illegal" online gambling transactions.

Along with Neteller, Citadel was one of the top online casino and poker room eWallets in business before the passing of the UIGEA, having processed over $2 billion in the years spanning 2003-2007. Well, even after the passing of the UIGEA, Citadel remained doing business with U.S. customers. It wasn't until Neteller was taken down that Citadel got the warning and stopped handling U.S. transactions. However, U.S. officials are using their bullying tactics to claim they always had laws in place that made Citadel's services illegal.

In fact, U.S. prosecutors even got ESI Entertainment Systems Inc. (the company that owns Citadel Commerce) to admit to engaging in criminal wrongdoing and knowingly violating U.S. gambling laws. ESI has also agreed to cough up $9.1 million to avoid prosecution on conspiracy charges (far better than the $136 million Neteller was forced to pay).

The most interesting aspect of the agreement is that Citadel must agree to cease from further wrongdoing for the next eighteen months. Perhaps that is a sign of a possible timeframe in which online gambling regulatory legislation may be enacted? Let's hope so.

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