Payment processor busted -- what’s going on here?

2Tone · #1 03-02-10, 02:02 PM

Interesting article, though it is missing a lot of information

Michael Olaf Schuett has become the target of a federal investigation after it was discovered he had allegedly transferred over $70 million in online poker winnings to 23,000 mostly American citizens, since 2007.

Related article at which says

Schuett was not associated with any online poker sites in the United States. Instead, he dealt as a middle-man between US players and foreign-based gambling sites.

I’m confused. Is the implication here that a major online site (23k players!) is for some reason routing their payments to American players through this one guy? Why? Were the players aware of this? Was the site/sites? How did he successfully (well, until he got busted) position himself as a middle man – what was he doing for players that the sites could not do themselves? How did he get clients? What was his cut?

And most importantly -- what there anything in place for him to prevent him from folding up shop one day and leaving for the Bahamas with all the money he was “routing”?

Talking Poker · #2 03-02-10, 02:36 PM

I'm reading it as him being a payment processor, basically a one man operation. Those checks you receive in the mail don't come from "Full Tilt Poker" - they come from ______ Corp. He's owns.runs ______ Corp.

He's not the first payment processor to get busted and likely won't be the last.

What I wonder is if the Feds will pursue any of the 23k customers. I would THINK they didn't do anything wrong, but who knows..........

melioris · #3 03-02-10, 05:23 PM

The guy acting as a payment processor sounds like a complete moron. The sad state of poker in America is that Major Sites (anyone know which sites?) would use an obvious idiot as a payment processor.

2Tone · #4 03-02-10, 06:11 PM

I find it pretty scary. So far, the site(s) using him have not been named. I have to wonder what the impact on the players will be. None? Minor delay? Or will any payments that were scheduled to go through him just not happen at all?

I assume that a major reputable site like Full Tilt or Star would make good, just as if my local bank manager emptied the vault one day, Bank of America wouldn’t leave me holding the bag. But that the idea that withdrawls are going through third-parties, who may or may not be reputable/competent, is disconcerting. Were the sites using him not running a huge risk?

For christ’s sake, legalize and tax already. Failure to do so only results in a greater volume and increasingly severe criminal activity.

Wes · #5 03-02-10, 07:12 PM

The legal criminal complaint can be

I found the following interesting:

Screen shot 2010-03-02 at 4.10.02 PM.png

Bank tellers are not your friends. They keep notes on everything you say. Don't tell them shit.

Wes · #6 03-02-10, 07:33 PM

The only online gambling sites listed on here are absolutepoker and ultimatebet. That brain trust over there at Cereus sure trusted a good one man criminal team for their payment processor.

Kurn · #7 03-02-10, 10:53 PM

If a bank teller EVER asked me where my money was coming from, the first words out of my mouth would be "None of your damned business." The second would be a request to speak to the manager, the third if I was still stonewalled would be "I would like to close my account."

Of course, I'd probably say the first one to an IRS agent as well, but that's just me.