PokerWorks

It was only in mid-2009 that Canadian Douglas Rennick, owner of payment processing company Account Services, was targeted by the United States Department of Justice for processing funds transfers to and from online gaming websites. Now, it seems, the scope of the DoJ’s intentions has widened, and another man is in custody. Australian Daniel Tzvetkoff, owner of an online payment processing company similar to Rennick’s, was arrested in Las Vegas Nevada, on charges of money laundering and processing electronic funds illegally, to name a few of the charges.

Some pegged the Rennick case as an isolated incident and an effort on the part of the Southern District Court of New York to make a statement or use Rennick as an example, but others more accurately predicted that it was only a sign of things to come. The Department of Justice has long wanted to use the Wire Act and UIGEA to prosecute those related to online gaming, since the industry somehow remained fairly untouchable for many years. With the gray areas of the laws keeping enforcement agencies at bay, online payment processors, the companies that assist customers with funds deposits and withdrawals to non-U.S.-based online gaming websites, seemed out of reach of U.S. authorities. But some governmental agencies beg to differ.

Daniel Tzvetkoff, a 27-year old man hailing from Australia but owning a worldwide company, was arrested in Las Vegas under an indictment that includes four felony counts: bank fraud, money laundering, conspiracy to operate and finance an illegal gambling business, and processing electronic funds in violation of the Unlawful Internet Gambling Enforcement Act of 2006. The amount of money in question regarding the laundering charge was $500 million, and if convicted of the four counts, Tzvetkoff could face up to 75 years in prison.

According to the indictment, Tzvetkoff was arrested due to the charge that he “assisted illegal internet gambling companies by processing approximately $500 million in transactions between U.S. gamblers and internet gambling websites and disguising the transactions to the banks so that they would appear unrelated to gambling.” More specifically, Tzvetkoff began using the Automated ClearingHouse system (ACH) for transferring funds for online gaming customers in early 2008 for his company called Intabill. (Editor Correction:  The name of the company has been confirmed as Intabill and is not associated with Instabill which is an established US company with no association with Tzetkoff). Along with co-conspirators, he processed more than $543 million between February 2008 and March 2009 and assisted with the transfer of offshore wire transfers. In addition, he took $27 million of that money and invested in a “paydayloan” company” that offered short term loans with an annualized interest rate of more than 500 percent.

The indictment goes on to say that an unnamed co-conspirator wrote an e-mail to Tzvetkoff regarding the hiring of a programmer to develop a website so that a person “checking the companies out there” would have no possible way “to tie the companies together.” Tzvetkoff’s response, in writing, was, “This is all perfect!” But the business stopped processing online gaming transactions in March of 2009 when “leading internet gambling websites accused him of stealing approximately $100 million from them.”

Tzvetkoff’s case is being handled by attorney Mace Yampolsky, who told the Down Jones Newswires, “At this stage of the game, it’s difficult to know exactly what type of evidence is out there. The allegations are certainly fantastic… They are only allegations. I can’t comment any further on the veracity of them.”

An interesting side note to the case is that Tzvetkoff was recently in the news for his involvement in a lawsuit regarding a home he owned on the Gold Coast. The mansion in question was purchased for $27 million but sold for $17 million, but the loss was allegedly due to signing over a second mortgage to an online poker company based in the Caribbean called Kolyma Corporation, reportedly part of the Full Tilt Poker empire. Kolyma claimed that Tzvetkoff owed them $42 million in debts and demanded the second mortgage be taken for the repayment of that money. Tzvetkoff sued Kolyma, which entered into a secret deal with three of his employees to take over the payment processing company, and Tzvetkoff alleged that Kolyma wanted to “ensure his downfall.” How the insertion of Full Tilt Poker into this case played a role in the U.S. Department of Justice case or how it will proceed remains to be seen.