Online gaming payment processors faces bank fraud charges

A Canadian man who opened several US-based bank accounts to process online gaming profits for US customers is facing federal bank fraud and money laundering charges. Douglas Rennick opened accounts under corporate entities with names such as Check Payment Financial Company, Account Services Corporation and KJB Financial Corporation to disburse payments from overseas accounts to American customers of online gaming sites.

In the terms of the federal indictment announced this week, Mr. Rennick was charged with conspiracy to operate an illegal gambling business, conspiracy to engage in money laundering and conspiracy to commit bank fraud. If convicted on all counts, Mr. Rennick could face up to fifty-five years in prison and fines nearing US$2 million. Authorities also want to seize over US$566 million in the accounts that they claim were the revenues generated by the illegal gambling business.

American authorities state that Mr. Rennick and his associates claimed that the accounts were intended to disburse rebate checks, refund payments and other small payment processing jobs, thus defrauding the banks by lying about the true nature of the accounts. If the banks had understood that the accounts were to be used to disburse gambling winnings, the indictment states, they would not have authorized the opening of such accounts.

The authorities that worked on the investigation and compiled the indictment include Acting US Attorney for the Southern District of New York, Mr. Lev L. Dassin and the Assistant Director-in-Charge for the FBI’s New York Office of the FBI, Mr. Joseph M. Demarest, Jr. Two Assistant US Attorneys, Arlo Devlin-Brown and Jonathan New, are supervising the prosecution. Another Assistant US Attorney, Jeffrey Alberts, is overseeing the account forfeiture. US District Judge Sidney H. Stein is set to hear the case. A trial date has not yet been set.