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St. George • The vice chairman of SunFirst Bank was released Monday after a weekend in jail in the wake of his arrest as part of a federal crackdown on overseas companies that the government contends were collecting illegal payments for online poker games.

John Campos, who also is a part-owner of the bank, was arrested Friday in St. George on an indictment from a federal court in New York City.

He was charged with money laundering for allegedly arranging for the bank to accept payments through independent processors on behalf of online gambling companies.

Campos was released Monday by U.S. Magistrate Robert T. Braithwaite, who required him to sign a $25,000 appearance bond, report for all court proceedings in New York and surrender his passport.

Campos' attorney, Neil Kaplan, and Assistant U.S. Attorney Paul Kohler told the judge they did not think Campos was a flight risk. Outside the courtroom, family members cried and hugged but declined to comment.

Campos was alleged to have made a deal with processors for two of the three largest online poker companies to use the bank to accept payments from gamblers in exchange for a $10 million investment in SunFirst and a $20,000 bonus to him for consulting services.

A 2006 law makes it a federal crime for gambling businesses to knowingly accept most forms of payment for illegal Internet gambling. Because of the law, Internet gambling companies based overseas have concocted schemes to use separate processing companies to hide payments, according to the indictment made public Friday.

After many of those accounts were shut down, the companies allegedly found banks willing to take payments they knew were from gambling.

A letter last year to SunFirst from a law firm led by former U.S. Attorney General John Ashcroft says the firm believes it could be legal to process payments for peer-to-peer poker players, that is those who play against each other and not against a computer.

"If a case was taken all the way to a judge and/or jury, and a decision was made on the legality of these practices ... we believe the decision would be in favor of online poker as a game of skill being allowed under those laws," said Catherine Hanaway, the attorney who wrote the letter.

The letter dated July 26, 2010, was solicited on behalf of one of the poker companies, PokerStars, named in the indictment and addressed to SunFirst Bank. It came about seven months after the indictment says SunFirst began processing payments.

But the letter makes clear that the Department of Justice "takes a contrary position" and warns that "the law in this area was unsettled." Hanaway said given that warning, she was not surprised by the indictments.

"It is consistent with what we describe in the letter as to the DOJ position," she said.