United States v. Rubin
United States Court of Appeals for the Second Circuit
743 F.3d 31 (2014)
- Written by Abby Roughton, JD
Facts
The United States government (the government) (plaintiff) charged Ira Rubin and others (defendants) with crimes including conspiracy to violate the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA). The UIGEA prohibited gambling businesses from knowingly accepting most forms of payment in connection with another person’s participation in unlawful internet gambling. The indictment asserted that internet-poker businesses PokerStars, Full Tilt Poker, and Absolute Poker (collectively, the poker companies) (defendants) had violated the UIGEA by deceiving banks into processing payments for illegal gambling activity conducted on the poker companies’ websites. The indictment asserted that the poker companies hired Rubin and others to serve as third-party payment processors to disguise gamblers’ payments. To accomplish the deception, Rubin and the other processors allegedly created phony e-commerce websites and opened bank accounts in the e-commerce websites’ names. Rubin and the others promised the banks that the accounts would be used to process legitimate e-commerce payments, but the accounts were actually used to process gamblers’ transactions on behalf of the poker companies. Rubin entered an unconditional plea agreement with the government in which he pleaded guilty to the UIGEA conspiracy charge, as well as to charges of conspiracy to commit bank fraud and wire fraud and conspiracy to launder money. The sentencing range set forth for those offenses in the United States Federal Sentencing Guidelines was 18 to 24 months’ imprisonment. However, the district court sentenced Rubin to 36 months’ imprisonment. The district court indicated that the upward sentencing variance was justified because of the reprehensible character of Rubin’s offenses and because Rubin had a long history of criminal conduct and the potential for recidivism that far exceeded that of his co-conspirators. Rubin appealed, asserting that the indictment had charged him with a nonoffense under the UIGEA because the UIGEA exempted from prosecution the activities of mere financial-transaction providers. Rubin contended that he was charged only with handling gambling funds, rather than having actual knowledge of and control over bets and wagers, and thus that he was nothing more than a financial-transaction provider who could not be prosecuted. Rubin also argued for the first time on appeal that the court had improperly imposed an upward sentencing variance. Rubin asserted that he played only a minor role in the conspiracy yet had a much longer sentence than his co-conspirators.
Rule of Law
Issue
Holding and Reasoning (Cabranes, J.)
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