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Federal Agents Seek $566m in Online Gambling Case

10/8/2009
A Canadian man has been accused by federal agents of laundering more than $350m on behalf of offshore internet gambling operations looking to skirt US gaming laws.

Douglas Rennick, 34, was charged with three felony counts relating to the alleged scheme, in which he reportedly established sham businesses between February 2007 and June 2009 in order to provide false information to banks and enable them to carry out large transactions that might otherwise have been barred.

An indictment filed last Thursday claims that the Canadian founded a series of faux businesses, including the KJB Financial Corporation, My ATM Online and Alenis Limited in order to defraud banks with false information. The businesses allegedly told banks that they were involved with issuing affiliate cheques and auto rebates, when in fact they were actually being used almost exclusively to funnel money from US customers to online gambling sites.

The charges levelled against Rennick – who is thought to have worked with several unnamed co-conspirators on the suspected scam – are further indication of the legal struggle caused by online gambling laws in the US. In 2006, federal law prohibited credit card companies from processing payments related to online gambling, and offshore companies have been looking for a way around the restrictions ever since.

As such, it is hardly surprising that their have been instances of money laundering like this one in the past couple of years, but what is unusual are the astronomical sums of money involved this time around. Prosecutors are seeking the forfeiture of $566m in proceeds from the alleged conspiracy and if convicted of the scam, Rennick faces a maximum penalty of 55 years in prison and $1.75m in fines.

With a case of this magnitude again forcing the issue of online gambling into the public eye, the charges have moved some federal lawmakers to renew their push to legalize and regulate online gaming.
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