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Poker News | Gambling and the Law

Guilty Plea for Rennick in Payment Processor Case

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Douglas Rennick and his payment processing company, Account Services have been at the center of an indictment by the U.S. Department of Justice since August of 2009 when charges were filed, but in February of 2010, Rennick made it known that he would not comply with subpoenas, thus he was found in contempt of court. But on May 11, Rennick not only appeared in the U.S. District Court but went so far as to plead guilty, forfeit $17.1 million, and face sentencing in September.

The Rennick case took the online gaming world by surprise. The U.S. Department of Justice indicted the Canadian owner of a number of payment processing companies, most notably Account Services, on several felony charges, including conspiracy to commit bank fraud, conspiracy to engage in money laundering, and conspiracy to operate an illegal gambling business. The Manhattan federal court requested his forfeiture of $565,908,288 in financial gambling funds that he allegedly accumulated from the payment processing business. But Rennick balked, refusing to comply with the subpoena on the basis that it violated his Fifth Amendment right against self-incrimination. And he was deemed in contempt of court.

The case of U.S. v. Rennick took a sudden turn on May 11, when Reuters reported that the 34-year old Rennick pled guilty to using wires to transmit bets and wagering information in connection with a $350 million internet gambling “scheme,” which was a lesser charge than listed on the original indictment. In addition, he agreed to forfeit $17.1 million, again a lesser figure than listed in the original documents. This happened in the U.S. District Court in the presence of Judge Sidney Stein. And in exchange for his plea deal, he will now face six to 12 months in prison, which will be determined at the sentencing hearing on September 15, 2010.

In basic terms, the “gambling scheme” was a payment processing procedure that allowed United States-based online gaming players to use Rennick’s services to transfer money to and from online gaming websites in order to play or cash out their funds. It is the type of service used by most of the millions of players who are unable to use credit cards or U.S. bank accounts to perform such services. Rennick told the judge essentially the same thing: “I had a business that transferred money from offshore gaming sites to American players within the Southern District of New York.” The location was where the indictment stemmed.

According to Bloomberg’s Business Week, the British Columbia resident was allowed to remain free on a $400,000 personal recognizance bond. Rennick’s lawyers had no comment about the guilty plea or the upcoming sentencing.

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