Enforcing the controversial US Unlawful Internet Gambling Enforcement Act (UIGEA) the Federal Bureau of Investigation (FBI) has filed an indictment charging Douglas Rennick with bank fraud and other offenses related to his alleged role in processing more than $350 million for internet gambling companies.
The FBI alleges that between 2007 and 2009 Rennick, who resides in Canada, and his co-conspirators opened a number of bank accounts in the US under various company names, including KJB Financial Corp, Account Services Corp and Check Payment Financial. According to the FBI, Rennick falsely represented that the accounts would be used for such purposes as issuing rebate cheques, refund cheques, sponsorship checks, affiliate checks and payroll processing.
In reality, noted the FBI, the accounts were used to receive funds from offshore internet gambling companies and then disbursed via cheques to US residents seeking to cash out their gambling winnings.
In total, Rennick and his co-conspirators are alleged by the FBI to have processed more than $350 million transferred from a bank account in Cyprus to various US bank accounts for this purpose.
In its indictment the FBI calls for Rennick to receive a maximum term of 30 years in prison and a $1 million fine on the bank fraud charge, 20 years in prison and a $500,000 fine on the money laundering charge and 5 years in prison and a $250,000 fine on the gambling charge. The indictment also seeks the forfeiture of approximately $566 million which represents the amount of proceeds the FBI alleges was obtained as a result of the illegal gambling and bank fraud conspiracies.
The FBI’s indictment was filed in the Southern District of New York Court which in June this year ordered the freezing of bank accounts of payment processors Allied Systems and Account Services. The two processors handled payments processing for four online gambling firms with Allied Systems’ accounts containing some $34 million in deposits and payouts and those of Account Services’ $14 million.
In total, funds of some 34,000 online poker players are involved in the court’s two account freezing orders.