For two years, US federal law enforcement agents operated a sting against online gaming operator BetEd, using what they would describe as a fake US processor called Linwood Solutions. The truth is, Linwood Solutions wasn't fake. It was as real as any illegal processor out there. It was doing just as much social harm as any of those illegal processors.
The rhetoric of those who support the prohibition of online gaming focuses on harm to those who gamble and their families. Ultimately, their analysis is that the harm is transactionally based, i.e. every transaction is marginally harmful and contributes to the total harm to an individual and his or her family. That's not the real reason that gambling is prohibited, but for now, let's say it is. Let's pretend.
On that basis, US federal agents were complicit in probably upwards of over 10,000 transactions in which innocent Americans suffered the harm that gambling prohibitionists and those agents say comes from the transactions. They played a major role as illegal conspirators themselves.
It goes without saying that a US federal agent cannot facilitate the commission of crimes. An analogy to the BetEd situation could be found in the drug trafficking world. Let's say that US agents set themselves up as mid level buyers and sellers of cocaine in the Los Angeles area. That would have to be an operation of minimal transactions and one in which arrests were made almost immediately. Otherwise, the cocaine passes through their hands, and the harm which it is claimed that cocaine causes would be visited on the victims, the end users.
If the BetEd model were to be applied to that operation, the agents themselves would have been involved in a cocaine trafficking conspiracy for two years and would ordinarily be subject to life imprisonment. They would have literally contributed to the profits of the very people they are supposedly trying to investigate and prosecute.
In terms of what happened in the reality of the BetEd situation, for all of the entire period but the end, perhaps the last week, BetEd had the huge processor problem beat. It COULD take bets and make payouts. Those bets were going through the law enforcement pipeline, and the payouts necessary to ensure confidence in BetEd were moving through regular as clockwork. So regular that it became the No. 1 book at Covers.
It was a goldmine for BetEd, gifted by the US government. BetEd profited from it, to the tune of possibly hundreds of thousands of dollars. Certainly it was far more than was eventually seized from the Panama accounts.
The people making the deposits and receiving the withdrawals were not doing anything illegal. They are not criminals in this matter. They, according to the prohibitionist mantra, are the victims. The US agents know who, at the death, had money in the pipeline both ways. They know how much individual depositors lost, as victims, over the two year period.
They have seized the illegal profits that lay in the Panama bank accounts. Their position seems to be that those profits belong to them, rather than forming a pool to be dispersed pro rata to the BetEd victims, whose identities they know.
It took nine months for the legal owners of money seized in the Neteller bust to get their money back. But they did get it back. It should take far less, probably less than a month, for a good lawyer acting for the innocent victims of BetEd to have their funds returned to them. It will probably be longer for that lawyer to have a court order that the Panama funds be distributed to the victims of BetEd based on their known losses in BetEd's "crimes".
That could be a problem organizationally though. I have another post up here asking for the simplest of information on how the Super Bonus scam worked. (Super Bonus losses are not in the hands of the feds). Last I looked there were over 80 views. Not a single reply.
Which leads me to believe there weren't that many victims. A lot of ki yiing, but not that many actual victims.
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