News

US court chasing egaming payment processor for $566m, 55 years jail 06/08/2009

Jon Parker

US AUTHORITIES have launched a law suit seeking more than US$566m in penalties and a jail sentence of up to 55 years for a man alleged to have processed more than US$350m for internet gambling companies.

The Southern District of New York, the same US court that recently moved to freeze the assets of US-facing poker sites including FullTilt and Poker Stars, has indicted Douglas Rennick with bank fraud and other offenses stemming from his role in processing the money.

According to the Indictment filed yesterday in a Manhattan federal court, since at least 2007 through to June 2009, Rennick opened a number of bank accounts in the US under corporate names such as ‘KJB Financial Corporation’, ‘Account Services Corporation’ and ‘Check Payment Financial Co’.

Rennick and his collaborators are alleged to have falsely represented that the accounts would be used for such purposes as issuing rebate checks, refund cheques, sponsorship checks, when in fact he used the accounts to receive funds from offshore internet gambling companies offering poker, blackjack, slots, and other casino games.

Rennick and his co-conspirators are alleged to have then disbursed more than US$350m of those funds via cheques to US residents seeking to cash out their gambling winnings, and to have provided misleading information to US banks about the purpose of the accounts, from which banks would not have processed the transactions had they known they were gambling-related.

Accounts opened by Rennick in the name of 'Account Services' at branches of Wells Fargo and Union Bank are known to have been used to pay winnings to players on US-facing sites including Absolute Poker, Ultimate Bet, Poker Stars and FullTilt.

Rennick is charged with one count each of conspiracy to commit bank fraud, conspiracy to engage in money laundering, and conspiracy to operate an illegal gambling business.

If found guilty, he faces a maximum term of 30 years in prison and a US$1m fine on the bank fraud charge, as well as 20 years in prison and a US$500,000 fine on the money laundering charge, and five years in prison and a US$250,000 fine on the gambling charge.

The indictment also seeks the forfeiture of at least approximately $566m which represents the proceeds obtained as a result of the illegal gambling and bank fraud conspiracies.

Rennick currently resides in Canada, the DOJ would not comment on whether it had already agreed on his extradition with Canadian authorities.

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Posted: 06/08/2009

Tags: Poker , US authorities

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