Money Laundering with Online Poker? British Tab Says Celeb Swindlers Soon to Be Outed

You probably use an online poker site to make some money and have fun playing your favorite game. But according to an investigation in the UK, at least one well-known athlete and other high-wealth individuals who got financially overextended have allegedly been using online poker to hide cash from creditors, all while taking tax deductions for their gambling “losses.”

Money laundering

A UK tabloid alleges that chip dumping in online poker has been a means for wealthy businesspeople and celebrities to launder ill-gotten gains. (Image: blogs.harvard.edu)

The source on this investigation might need to be taken with a grain of salt, however. The Sun is a British tabloid known for mixing National Enquirer-like sensationalism and trashy celebrity gossip with relatively straight-forward news reporting.

The Sun cites an unnamed “industry insider,” and one presumably reputable source in Kevin Mawer, a forensic recovery expert for the global accounting firm KPMG. He told The Sun he became familiar with the online poker tax evasion and money laundering scheme while investigating high-profile subjects, including prominent athletes and businessmen.

“We generally find there have been cases where someone who hasn’t really gambled before suddenly gambles huge sums of money,” he explained. “This happens in a very short space of time and they lose everything and only stop when the money runs out. It can be over a long period of time.”

Chip Dumping to Launder Money

The scam applies to people who have accrued major debts. To avoid paying back creditors, the Sun “investigation” alleges, a subject goes online and meets a friend for a private or heads-up poker game. Person A intentionally loses money to Person B by playing like a complete donkey.

“If you know the people in [the game] you can effectively transfer money to them in the process of gambling,” Mawer said.

The purpose of chip dumping while playing online poker is to leave no trace when hiding money by transferring it to another person. The person who won the chips would then reimburse the opponent with cash, but as far as creditors know, that money is gone and never to be returned.

This is allegedly being done by people who are heavily in debt and intend to file bankruptcy. It is legal in the UK to write off gambling losses when filing taxes. So, the accused are not only laundering money, they also could be committing the crime of tax evasion.

The Sun alleges the supposed crimes aren’t being committed by just random Joes. “Wealthy celebs and businessmen” are the ones doing the purported illicit chip dumping.

Poker Sites Not Implicated

A spokesman for the UK Gambling Commission released a statement in response to The Sun’s findings.

“As part of our rules and regulations operators must have mechanisms in place to prevent collusion during poker games,” the UKGC said.

The Sun’s anonymous industry source also was sure to explain that the online sites were not at fault.

“The gambling sites are not doing anything wrong and would not be aware it would even be going on,” the source said. “They have systems that flag up huge losses and unusual play, but no system is foolproof and someone with a decent plan could use a period of time to lose money away.”

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