NEW YORK – A U.S. citizen living in Costa Rica was a key player in an investigation of online poker companies, helping the firms move billions of dollars in illegal gambling proceeds overseas from U.S. customers, a federal prosecutor told a judge Wednesday.
Ira Rubin, 52, was ordered held without bail by U.S. Magistrate Judge James Cott after a prosecutor said Rubin had an almost uninterrupted criminal history since the 1970s and an $8 million Federal Trade Commission judgment against him because of a payment-processing business he operated from 2003 to 2006 that was tied to telemarketing fraud.
Rubin was arrested earlier this year in Guatemala as he prepared to travel to Thailand, where he was putting a deposit on a home. He was among 11 people charged in April in a prosecution that shut down the three largest Internet poker companies operating in the United States.
Stuart D. Meissner, Rubin's lawyer, said his client would not flee and wants to face the charges, which include conspiracy, violation of unlawful Internet gambling and operation of illegal gambling business. Meissner said the lease for the home in Thailand was signed "long before the indictment came down."
The charges carry a potential prison sentence of 85 years. Meissner called the evidence "highly questionable."
Cott cited Rubin's criminal record and charges he either faces or has faced in New York, Massachusetts, Missouri, Nevada, Florida and Virginia as reasons to doubt he would appear for trial.
"I have no choice but to detain the defendant," Cott said.
Assistant U.S. Attorney Arlo Devlin-Brown said Rubin created dozens of shell companies for online poker companies, making websites that appeared to be for golf stores, electronic companies or other businesses so that banks would not realize that money from gambling was being sent through their accounts. He said Rubin processed hundreds of millions of dollars, a portion of the $3 billion the government estimates the poker companies moved illegally.
Rubin had a history of defying court orders, including when he withdrew a half-million dollars hours after a December 2006 court order instructed him not to touch accounts related to the telemarketing fraud, Devlin-Brown said.
The prosecutor said Rubin fled to Costa Rica after failing to appear for a Jan. 8, 2008, court date. He said Rubin was wanted by authorities in New York and Las Vegas, where he was accused of writing bad checks.
The government had witnesses who said Rubin talked openly about being unable to return to the United States because he knew Internet gambling was illegal, Devlin-Brown said. He chartered a plane to travel from Costa Rica to Guatemala after the charges in the poker probe were revealed, Devlin-Brown said. He was detained in Guatemala and turned over to U.S. authorities.
Devlin-Brown said Rubin told people in jail in Florida after his arrest that he had been in Guatemala to get a phony passport and proceed to Thailand, where he planned to live.
The prosecutor said Rubin appeared to have the means to flee because he was believed to have bank accounts in Panama, Cyprus and the Philippines.
"We have no idea how much money this man has," he said. "He's fled before."
Outside court, Meissner called the prosecution "a bit of an overkill."
He noted that established casinos are working to legalize online gambling and even the government had its hands in the business through lotteries and its decisions to permit casinos on Indian reservations.
"This is like a year before Prohibition ended," he said. "The handwriting's on the wall in that respect. It's kind of hard, especially with the Internet, to control this."
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