Money Laundering

Sheldon Adelson’s Minions: James Thackston and the FBI Letters

ScreenHunter_13 Jan. 19 21.55

James Thackston’s graphics-deprived UndetectableLaundering.com serves as a central clearinghouse for wrongheaded scenarios claiming significant money laundering can be done via online poker.

The renewed push to block United States federal regulation of online poker and other forms of online gambling, largely funded by Las Vegas Sands CEO Sheldon Adelson, has included the dredging up of numerous historic investigative documents.  Among the more interesting of these documents are a pair of old FBI briefs, including one published by anti-gambling theorist James Thackston, that were requested by conservative legislators to support anti-gambling efforts at the federal level.

The earliest of the pair is a response letter written in November, 2009 by the FBI’s then-assistant chief of its cyber division, Shawn Henry, to a series of questions posed by US Rep. Spencer Bachus (R-AL).  Bachus is an anti-gambling stalwart from America’s Bible Belt who also occupies an important seat in the House Financial Services Committee, one of the most important of all Congressional committees.  A copy of  Henry’s response to Bachus’s inquiry can be found today on the Adelson-funded StopInternetGambling.com site.

It’s not that great of a brief, despite the Adelson group’s proudly proclaiming it as an important exhibit on the matter.

The set-up for the brief was Bachus asking the FBI’s Henry if money laundering via an online-poker site was viable, if other forms of cheating were possible and to provide examples of such money laundering via online poker, if any existed.

Henry did his best to provide Bachus with some ammo, stating that it was possible for players to collude at the tables — no one would argue with that — and that it was possible to create a scenario wherein colluding players used the site as a possible means to launder money, with one player repeatedly folding to the other, dumping virtual chips and thereby transferring real funds from one account to another.  However, when it came to finding examples of such money laundering, Henry had to throw up his hands and admit that none were known to exist.

Perhaps the nut of what Bachus, a not-very-tech-savvy person stuck in the role of trying to understand a technical matter, asked was this:

“Could technology be used to illicitly transfer or launder money in the guise of “innocent” participation in an online poker game, or the undetectable theft of money from one participant in such a game, by others acting on [sic] concert?  If yes, to what degree?”

Henry’s response was lengthy, but the first half of it was the most salient part of the reply. Wrote Henry:

“Yes, online poker could be used to transfer ill gotten gains from one person to another, or several other people.  Private tournaments exist on several online poker programs which would allow a subject to create a private game with his/her money mules.  Once the game is created, the subject could raise the pot, to whatever maximum is allowed, and then fold before the hand is finished.  This would allow the subject to transfer money from his account to the mule account.  This activity could repeat itself several times, virtually ‘washing the money.’  Once again, this activity could be detected by the vendors, but at what cost?….”

There are some supportable and arguable points in the FBI guy’s statement, but everything is qualified with the key word “could”; in other words, this is an attempt to build as strong an argument as possible to support Bachus’s anti-gambling push.  For example, in this single question-and-answer pair, the word “could” appears six times, and the entire brief is a smorgasbord of “coulds,” can bes” and “would bes”.

But amid the “could”-fest, there a few key words that pretty much describe the only way the FBI guy imagined money laundering could take place:

  • Private games (money launderers only);
  • Repeated play, in order to move more than a miniscule amount of money;
  • Lack of detection software by site;
  • Lack of interest by site in blocking such transactions;

I think those are solid points.  All four elements would have to be in play before online poker would even be able to be considered as a money-laundering option by would-be launderers.  When we return to the topic of the James Thackston laundering lunacies (also supported indirectly by Adelson) that we introduced in a post yesterday, we’ll compare and contrast those four requisites against Thackston’s silly assertions.  In a nutshell, and as part of an advance tease, let’s just say it’s nice of the ant-gambling folks to disprove their own case.

The Thackston assertions play even more squarely into the second FBI brief, which if nothing else, provide some proof of the truism that if a crackpot screams long enough and loud enough, he will eventual attract some attention.  Thackston, whose old politicsofpoker.com site, which made many of the same illogical money laundering claims but which faded into oblivion, managed to scream long enough and loud enough to his local Congressman (the late Bill Young, another Bible Belt Republican [Florida]) and to the Florida FBI to get a hearing with the FBI to show his undetectablelaundering.com claims.

According to the letter from the late Rep. Young, he wanted to know if the claims made by his constituent, Thackston, had any real merit, since Thackston had made such noise about his money-laundering claims.  Young asked this:

  • Based on the FBI’s understanding of Nevada, Delaware and New Jersey internet gambling poker regulations and countermeasures, could a person — other than the individual who opens an internet poker account — use technology which is undetectable to poker website operators and their regulators to play games from a physical location outside the United States?
  • Could the techniques and technologies described by Mr. Thackston enable money laundering with the potential to escape detection by poker website operators and their regulators?
  • Has the FBI developed a position on this matter?

In the meantime, Thackston claimed that the FBI had ordered him to take down his site, yet he later restored it, and that’s largely what undetectablelaundering.com is today.

Pointedly, and despite restoring the site in apparent defiance of the FBI’s request, Thackston has never shown documentation stating exactly why the FBI wanted his site taken down.  Thackston seems to be claiming that its because he’s exposed some sort of wide-open money laundering channel (it isn’t), but it’s every bit as likely that the FBI shooed him and his site away just to be rid of his lunacies, and that his claims of an FBI clampdown are as stretched out as his own site’s claims.  Supposedly, the FBI takedown request was made in December of 2012, but it’s not on Thackston’s site, despite the presence of other FBI letters there on the topic.

This is a most suspect omission, just as Thackston is a most suspect expert on online gambling and money laundering.

Anyhow, Rep. Young duly received his response from an FBI deputy assistant director, Britt Johnson, which doesn’t address Young’s questions specifically.  In fact, it never even mentions James Thackston by name, despite Thackston’s claims being part of the letter Rep. Young had sent months before.  Instead, Johnson summarized Young’s inquiry by stating, “You requested some information regarding money laundering via online gambling.”

Johnson went to make some points about online gambling, about money laundering, about organized crime, about all sorts of things, but he ever once tied any of those elements together, provided specific examples of money laundering done via those purported channels, or offered an ounce of credibility to Thackston’s outlandish claims.

Instead, as with the other FBI brief a few years earlier, he provided a general “cheerleading” sort of brief that touched on several possible criminal activities but was a gentle letdown regarding Thackston’s claims.  Rep. Young himself passed away just a month or two later, and Thackston, as rabid in his anti-gambling beliefs as his friends at Focus on the Family, decided to push the issue forward himself.

These supposed FBI briefs that show proof of undetectable money laundering opportunities via online poker?  They show no such thing.  Neither of the FBI officers who created these briefs has offered one whit of specific evidence in support of Thackston’s concept.  Thackston’s claims otherwise are all smoke and bluster.

We’ll be back early in the week with the next look into the strange claims of James Thackston.  Keep those four bold-faced points from the first FBI brief in mind, and add a fifth that the FBI guy never introduced: the enabling or restriction of peer-to-peer (player-to-player) money transfers.

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