The government's plan to avoid a trial in its prosecution of defendants in a crackdown on Internet poker companies hit a snag Wednesday when a judge refused to immediately accept a guilty plea from a Utah banker, saying he needed to know why the government was walking away from the case.
U.S. District Judge Lewis A. Kaplan ordered prosecutors to explain in writing why they let former St. George banker John Campos plead guilty to a misdemeanor bank gambling charge rather than a felony, averting a trial next month. The trial was the only one scheduled to result from charges brought against a dozen individuals in a prosecution that shut down U.S. operations of the three largest Internet poker companies. Half of those charged remain fugitives and the others have pleaded to charges.
"You're basically walking away from the prosecution?" Kaplan asked, noting that he has the power to reject the plea deal reached this week between the government and Campos. He questioned the severity of the outcome after Campos admitted that the bank where he served as vice chairman of its board of directors and a part owner had processed $200 million in gambling proceeds between late 2009 and last year.
The judge said he'll decide whether to accept the plea at a June 27 sentencing.
Assistant U.S. Attorney Andrew Goldstein said the stipulated sentencing range of up to six months in prison was about what Campos would face if he pleaded guilty to a felony.
Goldstein also said the government had succeeded in banning the 57-year-old Campos from future jobs with banking institutions.
Assistant U.S. Attorney Arlo Devlin-Brown said the deal given Campos was also an acknowledgement that there were trial risks, especially after people working on behalf of the gambling outlets had given Campos legal opinions suggesting that it might not be illegal to process the money for Internet gambling companies.
"There would be a risk that a jury on that basis could have a problem," Devlin-Brown said.
He also said the bulk of the case brought by the government concentrated on people who duped U.S. banking institutions into accepting gambling proceeds by hiding them behind sham companies. Campos, he said, came at the "tail end of the conspiracy."
During his plea, Campos admitted that SunFirst Bank, based in St. George, Utah, began processing gambling proceeds after two gaming companies, PokerStars and Full Tilt Poker, promised to invest $10 million in his bank. He said through his lawyer, Frederick Hafetz, that he did not believe the investment was in return for the processing of gambling proceeds.
The government said co-defendant Chad Elie persuaded Campos to let his bank process money for the foreign-based online poker sites. The men were supposed to stand trial together. Elie pleaded guilty to a misdemeanor charge earlier this week and is awaiting sentencing.