PokerWorks

In June of 2009, the Southern District of New York ordered, by way of Assistant U.S. Attorney Arlo Devlin-Brown, a freeze on accounts held by three banks containing more than $30 million in online gaming funds. The case recently took a more serious turn when one Canadian man who ran a payment processor network was indicted by the same court on several federal felony charges.

The original seizure of funds came as a surprise to the online poker world, but once sites like PokerStars and Full Tilt Poker arranged for other methods of payment for players attempting to cash out from the sites, the outcry turned into a murmur. During the past two months, Account Services, one of the payment processors affected, filed a motion in the court to have returned the $13 million frozen in its accounts. The Poker Players Alliance also filed a request to be considered a “friend of the court” in the case, a motion that was granted that will allow the PPA to present legal statements on behalf of the poker players it represents who were affected by the seizure.

But on August 6, the situation took on a new level of seriousness. The U.S. Department of Justice announced the indictment of someone associated with Account Services. Douglas Rennick of Canada was indicted in the Manhattan federal court and charged with conspiracy to commit bank fraud, conspiracy to engage in money laundering, and conspiracy to operate an illegal gambling business. Not only could he face up to 55 years in prison and $1,750,000 in fines if found guilty on all three charges, but the indictment has requested the forfeiture of $565,908,288 in funds, all of which the case claims was obtained through the accused fraud and conspiracies.

The detail given by the press released stated that Rennick opened several bank accounts in the United States - specifically KJB Financial Corporation, Account Services Corporation, and Check Payment Financial Co. - and supposedly falsely claimed that the accounts would be used for issuing rebates, refunds, sponsorship checks, affiliate payments, and payroll processing, but in fact those accounts were used to transfer funds in an amount exceeding $350 million to and from offshore internet gambling companies in Cyprus. Rennick and unnamed “co-conspirators” are accused of giving false and misleading information to U.S. banks “because the banks would not have processed the transactions had they known they were gambling related.”  

The announcement of the indictment came from Lev L. Dassin, Acting U.S. Attorney for the Southern District of New York, and Joseph M. Demarest, Jr., Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (FBI). The case has been assigned to U.S. District Judge Sidney H. Stein. The conspiracy case will be prosecuted by the aforementioned Devlin-Brown and Jonathan New, a fellow Assistant U.S. Attorney, and the forfeiture charge will be handled by Assistant U.S. Attorney Jeffrey Alberts.