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.
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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.
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By GlobalDataIn total, funds of some 34,000 online poker players are involved in
the court’s two account freezing orders.
