19-August-2009

U.S. federal authorities accused Canadian Douglas Rennick Tuesday of laundering $350 million on behalf of illegal online gambling operators. Rennick, authorities said, helped several offshore online poker rooms, including Poker Stars and Full Tilt Poker, skirt U.S. gambling law via proxy businesses.

Authorities charged Rennick, 35, with one count of bank fraud, one count of money laundering and one count of illegal gambling. Rennick, they said, founded KJB Financial Corp., My ATM Online and Alenia Ltd. between February 2007 and June 2009 as covers for online gambling transactions.

Authorities went on to charge that Rennick’s businesses misled U.S. banks by claiming they offered affiliate checks and automatic rebates. The companies, authorities said, then illegally funneled money between U.S. residents and online gambling operators.

Authorities filed an indictment against Rennick Thursday. They also said they believe Rennick worked with several others whose names they have not released.

According to the U.S.’s Unlawful Internet Gambling Enforcement Act, it is a felony to transfer money between U.S. residents and online gambling operators. Although several states consider poker a “game of skill,” the UIGEA, U.S. authorities contend, classifies online poker as “illegal gambling.”

Greg Raymer, a member of the board of directors for the Poker Players Alliance and 2004 world poker champion, expressed outrage at news of the indictment.

“I consider what these prosecutors have done to be immoral,” Raymer, a patent lawyer, told CardPlayer.com. “If (prosecutors) actually think online poker is illegal, they’re incompetent. That’s just not an appropriate interpretation of any of these federal laws.”

In related news, online gaming magazine Gambling911.com’s parent company, Costigan Media , won a suit to have documents related to Rennick’s indictment unsealed Tuesday. At press time, Gambling911 had not yet released further information on the case.

The U.S. Attorney’s office is currently seeking the forfeiture of $566 million in connection with the case.If convicted, Rennick faces a maximum penalty of 55 years in prison and up to $1.75 million in fines.

By: Phill Provance
phill.provance@acehoyle.com

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