The situation in the Southern District of New York just became much more complicated.
What started with the Assistant U.S. Attorney forcing the seizure of more than $30 million online gaming funds looked as if the Southern District of New York would be challenged in court and possibly forced to return monies because of missteps and a lack of warrants. But on August 6, the Department of Justice took the battle into new territory by indicting a Canadian payment processor by the name of Douglas Rennick and charging him with conspiracy to commit bank fraud, engage in money laundering, and operate an illegal gambling business.
An announcement came in the form of a press wire from the U.S. Department of Justice, specifically Southern District of New York Acting U.S. Attorney Lev Dassin and FBI’s New York Office Assistant Director-in-Charge Joseph Demarest, Jr., that the indictment against Rennick had been filed on August 5 in the Manhattan federal court.
The 34-year old Rennick lives in Canada and performed funds transfer services for online gambling customers in the United States. According to the indictment, the company names used were KJB Financial Corporation, Account Services Corporation, and Check Payment Financial Co., and the purposes stated for the accounts were to issue checks for rebates, refunds, sponsorships, affiliates, and minor payroll needs. But reportedly, his primary actions with the accounts involved transferring funds between internet gambling companies and U.S. residents. It reads, in part, “Rennick and his co-conspirators provided false and misleading information to U.S. banks about the purpose of the accounts because the banks would not have processed the transactions had they known they were gambling-related.”
The accusations include the transfer of more than $350 million transferred from a bank account established in Cyprus to various U.S. bank accounts between 2007 and 2009. The three counts of conspiracy for Rennick could garner him, if a guilty verdict is rendered, a maximum of 30 years in prison and a $1 million fine for the bank fraud, 20 years and $500,000 for money laundering, and 5 years and $250,000 for gambling. The indictment also includes the request of forfeiture of $565,908,288 in proceeds claimed to have been garnered by Rennick.
U.S. District Judge Sidney H. Stein has been assigned to the case, which will be prosecuted by Assistant U.S. Attorneys Arlo Devlin-Brown and Jonathan New, while Assistant U.S. Attorney Jeffrey Alberts will be in charge of the forfeiture matter.
It should be noted that one of Rennick’s companies, Account Services Corporation, was the only one since the original Southern District of New York account seizures to file a motion for the return of its $13 million in funds. Not only did the court action accuse SDNY of failing to obtain proper warrants, but the return of the property of online poker players was requested as a result. The Poker Players Alliance was also granted status as “friend of the court” in order to assist with the case and present testimony.
No comment has yet been made by the PPA or Rennick, but the complications of this case are likely still being examined by attorneys. Sources told Bluff after the initial seizure of funds that attorneys like Devlin-Brown, a Bush administration appointee, were attempting to further their agendas before being replaced by the current administration. However, with the current involvement of the U.S. Department of Justice in the Rennick prosecution, the levels of operation became infinitely more complicated and unclear as to how the matters will proceed.
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