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Table of Contents

Lead Story

Expanding options through microfinance

Patti Murphy
The Takoma Group

News

Industry Update

Indictment for gambling processor

EPX, joining end-to-end and tokenization

Be the miracle

A silver anniversary for Fiserv

PCI SSC reaches Iron Mountain

W.net appoints new director

Features

Payments on the edge: A conversation with Conrad Sheehan

The irrational truth of customer behavior

Industry Leader

Paul R. Garcia –
Apple thriving close to the tree

Selling Prepaid

Prepaid in brief

A new kind of smart card

A smarter way for the government to pay?

Card payments for caregivers

Views

Financially strapped boost payment alternatives

Patti Murphy
The Takoma Group

Accounts receivable processing and the ISO revenue model

Brandes Elitch
CrossCheck Inc.

Education

Street SmartsSM:
Blackjack savvy applied to merchant acquiring

Jon Perry and Vanessa Lang
888QuikRate.com

How to do effective performance appraisals

Vicki M. Daughdrill
Small Business Resources LLC

Processing continuity: Threats and remedies

Dale S. Laszig
DSL Direct LLC

An operational look at improving sales force training

Deana Sellens
Take Charge Business Consulting LLC

Company Profile

M2 Global Ltd.

New Products

Flag and filter online payments

Shop BuyVoice
Planet Payment Inc.

Merchant management minus tech troubles

Hosted Download Management Service
POS Portal Inc.

Inspiration

Reflect that glory

Departments

Forum

Resource Guide

Datebook

A Bigger Thing

The Green Sheet Online Edition

August 24, 2009  •  Issue 09:08:02

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Indictment for gambling processor

On Aug. 5, 2009, Lev L. Dassin, Acting Attorney for the U.S. District Court, Southern District of New York, and Joseph M. Demarest Jr., the Assistant Director-in-Charge of the FBI, filed an indictment charging 34-year-old Canadian Dennis Rennick with bank fraud, money laundering and conspiracy to operate an illegal gambling business. The charges stem from Rennick's role in processing more than $350 million for Internet gambling companies.

Fraud brazen

The investigation found that beginning in 2007, Rennick opened a number of bank accounts in the United States under various corporate names. Rennick and alleged co-conspirators sent transaction proceeds from a Cyprus bank account to various U.S. bank accounts.

Rennick is accused of stating the U.S. accounts would be used for issuing rebate, refund, sponsorship, affiliate and payroll checks and for processing those transactions when, instead, said accounts were used to receive funds from offshore Internet gambling companies that offered poker, blackjack, slots and other casino games. He then disbursed funds via checks to U.S. residents seeking to cash out their gambling winnings.

Greed too great

In June 2009, federal prosecutors seized about $33 million from Account Services Corp., one of the companies that Rennick allegedly used to pay online gambling customers. "It almost seems like this guy was more of a middle man to get the money back into the U.S., but I never heard of the guy and neither has anyone in the payments industry," said Gun Barrel City, Texas-based payments attorney Jay Reeve.

"Of course Fed banks today have to deal with the Patriot Act and KYC [know your customer] requirements, but it doesn't take that much work or that much genius to set up accounts on fraudulent representation."

Stigma immense

With the exception of fantasy sports, online lotteries and horse or harness racing, the transfer of funds from a financial institution to an Internet gambling site is prohibited in the United States under the Unlawful Internet Gambling Enforcement Act of 2006. And Reeve doesn't expect this law to be revised anytime soon because of the stigma associated with Internet gambling.

"I don't know of any respectable acquirer that even wants to get near Internet gambling," Reeve said. "Of course everyone would like to have the money that it generates, but I think the big players look at if from the standpoint that a) they don't want the media writing about them getting all this Fed money and then making additional billions in gambling transactions; and b) they fear a greater loss of revenue in the soiling of their brand being affiliated with that kind of activity."

Consequences severe

If convicted, Rennick faces up to 55 years in prison, $1.75 million in fines and the forfeiture of approximately $565.9 million, which according to the FBI, are the proceeds Rennick obtained through illegally processing online gambling transactions and conspiring to defraud financial institutions.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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