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10 Aug 09 Online Gambling Fund Case

Most cases that facing with online casinos and land casinos is the pay outs that’s not given by the players who won. A month ago the Department of Justice of the United States had seized fun from Well Fargo and Union Bank that were meant for paying players at gambling site. The whole story was actually first broken at the Agence France Presse news agency and was rapidly spread the internet. The Department of Justice has obtained the indictment of a Canadian resident named Douglas Rennik. The written statement was obtained in the Southern District of New York at the same US court that ordered the seizure of the internet gambling funds.

Charges being given to Rennik are bank fraud and other charges related to the distribution of Internet gambling winnings to the US players disguised as other payments. As the DOJ get the initial report with the said funds they specifically alleged that between 2007 and 2009 Rennik process $350 million for Internet gambling firms. From US bank the funds was being transferred to the bank in Cyprus . DOJ concluded they had a modus operandi transferring money from the US bank to Cyprus bank using another names of dummy corporations like “KJB Financial Corporation”, “Check Financial Co.”, and “Account Services Corporation”. Rennik falsely declared that the purpose of opening these accounts was to issue rebate check, sponsor checks, affiliate checks and refund checks and minor pay roll processing.

Rennik and others, who have not been named yet used these accounts to receive payments offshore Internet Gambling Companies and remit them through checks to US players who had requested withdrawals of their gambling winnings. It was stated in the law that the US banks would not have processed the transactions if they were aware that the transactions pertained to internet gambling and therefore, Rennik had provided misleading information about the nature of the transactions. Internet gambling companies offered a lot of product such as: blackjack, slots, poker and other casino games.

The charges will go farther in the court then Rennik will be charge with the maximum punishment of 30 years in prison and a fine of at least a million dollars under charges like bank fraud and money laundering. This will be the payments in return with all the things that his being done with the winning pay-outs of the player. The DOJ has all along claimed that Internet gambling is illegal under the Wire Act even if the Internet gambling sites are owned by foreign companies. In the past the DOJ has acted against these foreign operators like PartyGaming. However now the Unlawful Internet Gambling Enforcement Act (UIGEA) has been passed and the DOJ is on much firmer ground acting against the processing of financial transactions for Internet gambling. Such financial transactions are illegal under the UIGEA


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