Recent seizures of internet gambling funds related to the payment processor Account Services do not appear to be the end of the U.S. Government’s war against the industry. This week, it was revealed that funds in six more accounts had been seized.
The six accounts, according to the Baltimore City Paper, are held by Wachovia and appear under the name Forshay Enterprises. In July and August, other funds were seized in branches of Interstate Net Bank, Bank of America, and First Premier Bank belonging to Electracash and HMD. Regina Mignogna, a Maryland State Trooper, signed the warrant affidavits for the HMD accounts, which were obtained by Poker News Daily. Each of the warrant applications was ordered seized “until further order of this court or until January 20, 2010, whichever is earlier.” The documents were filed in the U.S. District Court in Baltimore.
Richard Gunn, an Anne Arundel County Police Detective, signed the warrant applications for the Wachovia accounts, which were numbered 2000042478410, 2000042478070, 2000042478452, 2000042478300, 2000042089414, and 2000042089427. The City Paper linked Forshay Enterprises to TransactSvc.com. Meanwhile, Electracash was tied to Edward Courdy, who many might remember as one of the defendants in Maryland’s Bodog case in 2008. That news broke last July, when $24 million was seized from the popular online poker site. Funds were taken from four publicly traded U.S. banks, including Wachovia, Bank of America, SunTrust, and Regions.
Account Services, which processed payments for PokerStars and Full Tilt Poker in 2008 and 2009, filed a motion in July for return of property, namely $14 million seized by the U.S. Government. The money was held in Union Bank and Wells Fargo branches in California. In retaliation, the Government indicted Account Services’ Douglas Rennick, a Canadian, on charges of bank fraud, money laundering, and illegal gambling. He faces up to 55 years behind bars and $1.75 million in fines for his actions. As of the time of writing, he has not settled with U.S. authorities.
In August, Judge Jeffrey Miller denied Account Services’ motion for return of property, instead electing to wait for the criminal case against Rennick to pan out. The seizure was part of a larger effort by the Southern District of New York in June during which over $30 million was frozen. The funds in question were allegedly destined for more than 24,000 online poker players and not connected to online wagering on sports. Bodog operates a full online sports book, an option that does not exist on PokerStars or Full Tilt. The Poker Players Alliance (PPA) filed an amicus brief on behalf of Account Services, a decision the organization stuck by despite Rennick’s criminal indictment.
Many in the online poker community assumed that the election of U.S. President Barack Obama, a poker player, would ease the attack on the industry. However, the opposite has been true so far, with federal agencies going on the offensive. For example, FBI Special Agent Dana Conte swore to the affidavits relating to Account Services.
In the closing months of the Bush Administration’s stay in Washington, D.C., the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA) were ushered into effect as “midnight rules.” Former Senate Majority Leader Bill Frist (R-TN) was instrumental in attaching the UIGEA to an unrelated port security measure in 2006. The SAFE Port Act passed through the House with ease and was approved in the Senate by unanimous consent. Speaking out during the debate in the House was Congresswoman Shelley Berkley (D-NV), who questioned why internet gambling appeared in the bill.
As a result of the June seizure, which coincided with the running of the annual World Series of Poker (WSOP) in Las Vegas, paper checks and e-checks temporarily bounced, leading to reimbursements and cash bonuses from some of the world’s largest online poker sites. What effect the latest round of seizures will have on the industry is anyone’s guess.