More of the court documents that were heavily redacted now have a bit less of a black line through them, to show Full Tilt Poker and PokerStars mentioned in the case of Douglas Rennick and the freezing of nearly $40m in funds from payment processors.
iMEGA has a copy of the documents up on their site.
A US District Judge has granted Costigan Media — the folks behind Gambling911 — their request to unseal seizure warrants and (heavily redacted) court documents related to the seizure of some $34 million that US attorneys allege are ill-gotten gains from illegal online gambling.
This is a semi-significant ruling because while the First Amendment has stood up for such requests in most criminal prosecutions, there is less case law directly addressing matters of civil forfeiture, according to Judge Laura Taylor Swain … but ultimately, yes, when thousands of American citizens are having funds they believe to be theirs seized by the government, yes, the public has a right to know what’s going on.
Click here for 49 pages of freshly released legal documents, not all of which look like this:
The losing side, btw, in this mini case-within-a-case are ultimately the same Manhattan federal prosecutors who followed up these payment processee seizures with an indictment against Douglas Rennick — the Canadian payment processor who faces more than 50 years in prison (cumulative), $1.75 million in fines, and the forfeiture of nearly $566 million on charges of fraud, money laundering, and illegal gambling operations for his doing business with websites such as Full Tilt, PokerStars, Ultimate Bet, and others.
That indictment, of course, may or may not have come coincidentally on the same day Sen. Robert Menendez (D-NJ) introduced a Senate bill that would effectively make all the issues being adjudicated above moot in the future.
Regardless of what’s in play there, I think it’s clear why, indeed online poker related money issues really can’t be handled in the shadows — as much as some federal prosecutors would like such transactions to stay that way.
From the Department of Justice:
Internet Gambling Payment Processor Charged With Bank Fraud, Money Laundering and Illegal Gambling Offenses
NEW YORK, Aug. 6 /PRNewswire-USNewswire/ — Lev L. Dassin, the Acting U.S. Attorney for the Southern District of New York, and Joseph M. Demarest, Jr., the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (FBI), announced today the filing of an indictment charging Douglas Rennick with bank fraud and other offenses stemming from his role in processing more than $350 million for Internet gambling companies. According to the indictment filed yesterday in Manhattan federal court:
Since at least 2007 through June 2009, Rennick opened a number of bank accounts in the United States under various corporate names, such as KJB Financial Corporation, Account Services Corporation and Check Payment Financial Co. In opening the accounts, he and his co-conspirators falsely represented that the accounts would be used for such purposes as issuing rebate checks, refund checks, sponsorship checks, affiliate checks and minor payroll processing. In fact, Rennick and his co-conspirators used the
accounts to receive funds from offshore Internet gambling companies that offered, variously, poker, blackjack, slots and other casino games. Rennick and his co-conspirators then disbursed those funds via checks to U.S. residents seeking to cash out their gambling winnings. 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. In
total, Rennick and his co-conspirators processed more than $350 million transferred from a Cyprus bank account to various U.S. bank accounts for this purpose.Rennick is charged with one count each of conspiracy to commit bank fraud, conspiracy to engage in money laundering and conspiracy to operate an illegal gambling business. If found guilty, Rennick faces 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 five years in prison and a $250,000 fine on the gambling charge. The indictment also seeks the forfeiture of at least approximately
$565,908,288, which represents the amount of proceeds obtained as a result of the illegal gambling and bank fraud conspiracies. The case has been assigned to U.S. District Judge Sidney H. Stein.Rennick, 34, currently resides in Canada. Mr. Dassin praised the investigative work of the FBI and thanked the
Department of Homeland Security’s U.S. Immigration and Customs Enforcement and the Internal Revenue Service for their assistance in the investigation. Mr. Dassin added that the investigation is continuing.Assistant U.S. Attorneys Arlo Devlin-Brown and Jonathan New are in charge of the prosecution, and Assistant U.S. Attorney Jeffrey Alberts is in charge of the forfeiture in this case.
The charges contained in the indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.
So says this class-action lawyer on the right in an interview on CNBC on Wednesday. The Jeffrey Pollack lookalike on the left doesn’t seem to buy it.
First Gambling 911 and Pokerati … then the Associated Press, and now MSNBC, the Wall Street Journal, and the New York Times are following aware of the $33 million of online poker winnings that has been frozen at the behest of an Assistant US Attorney in New York’s Southern District, the court that has historically created the most headaches for all things online poker.
ALT HED: Neteller 2?
The banks are deflecting blame and criticism, saying they’re simply complying with a federal court’s direction. Not surprising, of course, considering they aren’t really in a position to defy their new dot-gov overseers. The non-poker media probably doesn’t even give a shit about poker players — they just care right now about the relationship between government and banks … but hey, good to know … because just like government officials found a villain in the form of online gamblers to justify fingering its way into the bigger world of cross-border internet commerce, now online poker has a potential villain in bad, old-school governmenting (relying on nearly 50-year-old laws) to justify its immediate need to revise the laws that affect our multimillion-UScitizen industry.
To understand the brass tacks of what just happened and is happening, be sure to read the NYT story here:
Web’s Poker Winners Face Delay in Collecting
(Thanks, Lana, for the link!)
In it we learn:
Ah, once upon a time ret. Sen. Al D’Amato (R-NY) held real power … regardless, he’s still trying to wield his influence over federal actions in his home state, and the PPA statement around his statement says something about the seriousness of the payment processor account-freezing situation while confusing this quasi-legally savvy journo/not-a-lawyer on the difference between warrants and subpoenas:
PPA Statement on Southern District of NY Action Against Online Poker Players
Letter Sent to Assistant US Attorney Requesting Presence at Future HearingsWASHINGTON, DC (June 9, 2009) – The Poker Players Alliance (PPA), the leading poker grassroots advocacy group with more than one million members nationwide, today released the following statement by PPA Chairman Alfonse D’Amato on questionable actions taken by a federal prosecutor in the Southern District of New York to freeze payment processor accounts containing more than $30 million in poker players’ deposits and payouts.
The PPA also sent a letter to the Assistant United States Attorney for the Southern District of New York asking for an opportunity to be heard in any future warrant hearings. The letter is available at www.pokerplayersalliance.org.
