Ahmad Khawaja ran two payment processing companies, Allied Wallet and Allied Systems. A little more than a year ago, the United States federal prosecutors seized a large amount of funds from a bank account at the Goldwater Bank in Scottsdale Arizona.
A little over $13.3 million was seized from accounts that were held by the payment processing company at the Goldwater Bank. According to the civil forfeiture complaint that was filed in the United States federal court in Manhattan, the money that was seized could be traced to a gambling business that is illegal. The funds that were traced were used both for operating the gambling business and were also the funds received from the business.
One of the online gambling sites to which the funds were traceable was a well known poker site. It seems that the site, PokerStars, was unaware that the payment processors, Allied Wallet and Allied Systems, were hiding information from their bank.
The online poker site was not pleased, and issued the following statement: “PokerStars does not condone efforts by processors to conceal the nature or purpose of funds used to play online poker.”
The statement also noted: “PokerStars has taken steps to ensure that processors properly disclose the nature of their business to their relevant financial institutions.”
The out of court settlement between Ahmad Khawaja and the United States federal prosecutors was simply the amount of money that had been seized, $13,335,248.91. There were no additional funds forfeited. As far as the Civil Forfeiture Complaint was concerned, the funds that were deposited between January 2009, and May 2009, were proceeds from an illegal gambling business. A portion of these funds were linked to PokerStars.
The federal prosecutors were unable to prosecute PokerStars since they are located offshore, and it is not quite clear which United States laws are being broken by them, because the law is not so clear on this issue.