Investigations

When the U.S. government seizes assets and funds, they are rarely predisposed to give any back. But in this case against a payment processing company—from which federal authorities in Maryland seized over $2 million of allegedly illegal proceeds in connection with an investigation of illegal sports betting –Ifrah Law helped its client get half of it back.

The Department of Justice was very aggressive in seizing the payment processor’s assets in California, claiming it was a front for the gambling industry. Our precise forensic investigation demonstrated that over 50 percent of our client’s proceeds came from legal, legitimate sources, and that the scope of the seizure was overly broad.

The result was the first settlement on record where the Department of Justice agreed to refund over $1 million of proceeds initially represented to the Court as illegal.

PokerStars turned to Ifrah Law to defend it against an attempted class action filed under the Illinois Loss Recovery Act in the plaintiff-friendly Southern District, where individuals can seek to collect losses on behalf of third parties that fail to make their own claims within six months of losing their wagers. The case posed the risk of a multi-million dollar hit to PokerStars, and could open the door for related class actions against online poker operators.

We successfully argued that PokerStars was not liable because it serves as a third party service provider— it only provides the forum for others to play and lacks a stake in the outcome.

The decision closed the door on future class actions against PokerStars, and provides precedent for other class actions that may arise against online gaming operators under loss recovery statutes.