Canadian Payment Processor Indicted, US Looking to Recover $500M+

by , Aug 6, 2009 | 10:40 am

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.

7 Comments to “Canadian Payment Processor Indicted, US Looking to Recover $500M+”

  1. DanM

    Kevin, you follow the newswires pretty closely. Is it common that a court would put out a press release on their own indictments? That strikes me as a bit unusual … but maybe this is SOP anytime they have a potentially controversial case?

  2. Kevin Mathers

    I assumed it was the DOJ who issued the press release. I saw it elsewhere, then checked out this link, which has all sorts of gambling press releases available, and voila.

  3. DanM

    huh. yeah, it’s unusual for the DOJ to issue a press release like this, i am pretty sure. Can’t quite put it all together, but it seems well timed with the Menendez bill. It will be interesting to see which of the names above end up running for office.

    Arlo Devlin-Brown is supposedly the militantly anti-poker guy, but I’m hearing that like third-hand.

  4. On Tilt

    Does this mean that I shouldn’t use my normal online sportbook this season for fear of not being able to get my money back?

  5. DanM

    I’m no lawyer, so full disclaimers apply … but I still think you’re good at least until Dec. 1. Going after Rennick is a move to create a villain out of a rich fat-cat guy, as that serves their purposes better than having the government grab money from regular folks.

  6. Dat To

    This is a crazy story. It’s amazing that some people have no problem doing shady things to make a buck.

  7. DanM

    so says the guy spamming this post in a way that we had to remove his URL …