June 9, 2009 (CAP Newswire) — The rumors are apparently true: The U.S. government is behind the recent freezing of more than $30 million in online poker assets in various banks throughout the country. And this time, unfortunately, the culprit is not a lone state like Kentucky or Minnesota, but the federal government itself.  

The PPA (Poker Players Association) said today that the millions were in the accounts of payment processors that handle the winnings of thousands of online poker players. This explains the mysterious eCheck cancellations and freezes first reported over the past weekend at some of the world’s biggest online poker sites, including PokerStars and Full Tilt.  

The government’s justification is that, since Internet gambling is illegal, it claims that the funds are also illegal, and open to seizure.

The government is acting in this case via U.S. attorney for the Southern District of New York, who has so far instructed three banks to freeze accounts.

“Documents obtained by the AP show that a judge in the district issued a seizure warrant last week for an account at a Wells Fargo bank in San Francisco, and that a federal prosecutor told a bank in Arizona to freeze an account,” writes Frederic J. Frommer for the Associated Press.

The prosecutor claimed that all accounts held by payment processor Allied Systems Inc. were subject to seizure and forfeiture "because they constitute property involved in money laundering transactions and illegal gambling offenses." These claims were made in a letter signed by Arlo Devlin-Brown, the assistant U.S. attorney for the Southern District of New York.

"In another letter faxed the same day, Devlin-Brown asks that the bank treat the funds ‘as legally seized’ by the FBI,” continues Frommer, “saying that the government has probable cause that the gambling payments of U.S. residents had been directed to offshore illegal Internet gambling businesses.”

The PPA is already mobilizing against these actions, but this time, the situation is much more complex than it has been in similar fights that have come before.

Click here to read more from the AP.

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