PokerWorks

The water gets murkier the deeper the case sinks. When it started in June of 2009, it seemed as if the Department of Justice, working through the Southern District of New York, intended to go after the online poker sites like Full Tilt and PokerStars, but when evidence began to emerge that much of the $30 million-plus was seized without proper warrants, the court made another move. The indictment of Douglas Rennick for running a payment processor service looked to make an example of all such services, and the latest information confirms that the original intent of the assistant U.S. attorneys is still in place, as PokerStars and Full Tilt are named in the indictment as benefactors of the service.

Rennick’s indictment on August 6 came with the fanfare of a press release sent by the U.S. Department of Justice, which announced that the Canadian man who ran a payment processing company was being charged with conspiracy to commit bank fraud, conspiracy to engage in money laundering, and conspiracy to operate an illegal gambling business. All in all, guilty verdicts would collectively garner 55 years in prison and $1,750,000 in fines, along with $565,908,288 in funds that the court claims was gotten through fraud and the named conspiracies. Much information was given about the case, though the indictment itself remained sealed.

That was until Costigan Media, the parent company of website Gambling911, interjected itself into the case with a Motion to Intervene and gain access to the seizure warrants in June and the indictment of Rennick. The motion was granted by Judge Laura Taylor Swain, though the initial pages released had much of the text redacted because of the “ongoing investigation,” however, an additional motion was filed, and the judge ordered some of the previously redacted pages released to the public as well. That was when the names of major online poker sites came into play.

Rennick’s indictment accused him of opening bank accounts in the United States with three names - KJB Financial Corporation, Account Services Corporation, and Check Payment Financial Company - under the pretense that they would be used for issuing rebates, refunds, sponsorship checks, affiliate payments, and payroll processing. The online poker business is no stranger to third-party payment processors that operate offshore - as this one did in Cyprus - and assist players in funds transfers. It was in this respect that Full Tilt Poker and PokerStars were named in the June seizure warrants, as well as the accusation that “Account Services has previously provided payment services for companies providing online gambling services, including Pokerstars and Full Tilt Poker, the largest internet poker businesses in operation.”

It is not clear how PokerStars and Full Tilt Poker will respond, or if any response is even required, to the wording of the Rennick indictment, though there is little doubt that the companies’ attorneys are on the case. What it means, however, in the most basic of interpretations is that the Department of Justice is aware of the operations of the largest poker sites in the United States and how they operate askew of the law and continue to cater to American customers.

More on the case(s) is sure to come to light and evolve in the coming months.