A hearing scheduled for Friday to address Account Services’ motion for the return of property, namely $14 million seized by the Southern District of New York, has been cancelled. The future of the case is now in jeopardy.
Attorney Jeff Ifrah told Poker News Daily that counsel for the U.S. Government filed a motion to dismiss the case, which was to be heard in the Southern District of California. Ifrah candidly explained, “The Government is in New York and they don’t want to travel to California.” Both sides have submitted briefs in the case, with the Government arguing that Account Services’ request for return of property should be rolled into its case in the Southern District of New York.
Account Services attorney Michael Pancer told Poker News Daily, “Motions like this are not uncommon.” On the future of the case, which no longer involves a hearing tomorrow, Ifrah claimed, “The judge may deny the Government’s motion and instead schedule an evidentiary hearing to listen to witnesses and arguments. Then, he can make a determination of whether the Government had probable cause to seize funds.” The funds in question were taken from Union Bank and Wells Fargo branches in California as part of the Southern District of New York’s actions against online poker payment processors in June.
Earlier this month, Account Services’ Douglas Rennick was indicted on charges of bank fraud, money laundering, and illegal gambling. He faces up to 55 years in jail and up to a $1.75 million fine plus forfeiture of funds obtained as a result of his actions. The Account Services hearing was originally scheduled for last Friday before a judge postponed the proceedings by one week. In a memo to both parties outlining the hearing date change, Judge Jeffrey Miller also granted the request of the Poker Players Alliance (PPA) to file an amicus brief on behalf of Account Services.
Rennick’s indictment alleges that he created several businesses to provide payment processing for internet gambling outfits, including My ATM Online, Alenis Limited, KJB Financial Corporation, Check Payment Financial Company, and Account Services. The document claims, “Rennick and his co-conspirators receive funds from offshore internet gambling companies, cause those funds to be wired into United States bank accounts, and then cause the funds to be disbursed through checks payable to United States residents who are seeking to cash out their gambling winnings.” A sum of $350 million was transferred from a bank account in Cyprus to pay out funds to online poker, blackjack, and slot machine players.
Rennick and company claimed that the funds in question would be used for affiliate checks, rebates, refunds, sponsorship checks, and payroll. However, the indictment notes, “The… account was used by Rennick and his co-conspirators almost exclusively to process internet gambling related payouts.” In the case of Union Bank, Rennick told officials that Account Services was “a ‘rebate check processor’ for ‘large retailers’ and ‘auto dealerships.’”
In June, the Southern District of New York seized over $30 million belonging to more than 24,000 online poker players. In many cases, the affected sites, which included PokerStars and Full Tilt Poker, reimbursed players and doled out cash bonuses for the inconvenience. In its reply brief seeking return of property as a result of the seizure, attorneys for Account Services noted, “ASC and Mr. Rennick are separate and distinct legal persons, despite the Government’s assertions to the contrary.” The warrant application filed by FBI Special Agent Dana Conte revealed that Rennick was one of the signers on the Account Services account.
The future of the Account Services motion is now up in the air. We’ll keep you posted right here on Poker News Daily.
