CANADIAN ARRESTED ON $350 MILLION ONLINE GAMBLING ALLEGATIONS

7 August 2009

US officials lay charges of fraud and other offences
 

A Canadian resident, Douglas Rennick (34), has been indicted in the United States on fraud and related charges for processing some $350 million for Internet gambling firms, the Agence France Presse news agency reports.

The indictment has been unsealed in the Southern District of New York (the same US court that recently moved to freeze the assets of US-facing poker sites including Full Tilt and Poker Stars) charging Rennick with bank fraud and other offenses stemming from his role in a scheme to disguise the transactions to distribute gambling winnings to US residents.

Allegations by the US Justice Department are that from 2007 to June 2009, Rennick opened bank accounts in the United States under various corporate names such as ‘KJB Financial Corporation’, ‘Account Services Corporation’ and ‘Check Payment Financial Co’ and "falsely represented that the accounts would be used for such purposes as issuing rebate checks, refund checks, sponsorship checks, affiliate checks and minor payroll processing."

'Account Services' accounts at branches of Wells Fargo and Union Bank are reported to have been used to pay players on US-facing sites such as Absolute Poker, Ultimate Bet, Poker Stars and Full Tilt.

Authorities said Rennick and unnamed co-conspirators used the accounts "to receive funds from offshore Internet gambling companies that offered, variously, poker, blackjack, slots and other casino games."

Rennick and others "then disbursed those funds via checks to US residents seeking to cash out their gambling winnings."

The indictment charged that Rennick and others "provided false and misleading information to US banks about the purpose of the accounts because the banks would not have processed the transactions had they known they were gambling-related."

US investigators claimed that Rennick and co-conspirators processed more than $350 million transferred from a Cyprus bank account to various US bank accounts for this purpose.

If found guilty, Rennick faces a maximum term of 30 years in prison and fines of more than one million dollars for bank fraud, money laundering and other charges. The indictment also seeks the forfeiture of at least $565 million.

Justice Department officials claim that Internet gambling by US residents is illegal even if the websites are owned by foreign operators, but it has focused prosecutions under the Unlawful Gambling Enforcement Act on companies and individuals involved in financial transactions.       

Online Casino News Courtesy of Infopowa

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