Last week, Judge Laura Swain of the Southern District of New York (SDNY) asked attorneys for the United States Government to explain how the indictment of Account Services’ Douglas Rennick affected information contained in the warrant applications used to seize over $30 million from more than 24,000 online poker players.
As a result of the document filed by the Government last Wednesday, new information was released on the background of Account Services, including the company’s association with PokerStars and Full Tilt Poker. Half of the warrant applications used to seize funds from California branches of Wells Fargo and Union Bank were redacted (crossed out) when the documents were unsealed and released last week. However, Judge Swain commented, “The Court finds that certain other previously redacted portions of the materials should now be unsealed.”
In a section of the warrant application entitled, “Account Services’ History of Providing Payment Services for Online Gambling Companies,” the text reads, “Account Services has previously provided payment services for companies providing online gambling services, including Pokerstars and FullTilt Poker, the largest internet poker businesses in operation.” Dana Conte, the FBI Special Agent who swore to the affidavits, noted that the Wells Fargo account was likely used to transfer payments from PokerStars and Full Tilt, both of which accept players from the United States.
The document also profiles Rennick’s involvement with Account Services. The newly-released warrant application reveals, “There are multiple links between the Defendant Account and Douglas Rennick, a Canadian citizen who has previously processed winnings for the internet gambling industry. Rennick is one of the signers of the Defendant Account. Rennick is also associated with Alenis Limited.”
Rennick had indicated that the funds contained in the bank accounts would be used for activities like processing rebate checks and affiliate checks. J.P. Morgan closed the Wells Fargo and Union Bank accounts in December of 2008. Rennick had been associated with KJB Financial Corporation, Account Services, My ATM Online, Alenis Limited, and Check Payment Financial.
International money transfers from Cyprus were used to finance the Account Services operation. Conte noted, “I also learned that in April 2009, the individuals who applied to have the Defendant Accounts opened instructed Union Bank to list ‘Check Payment Financial Co.’ as the entity issuing checks… rather than ‘Account Services Corp.’” The Union Bank warrant application is dated June 24th, nearly two weeks after the seizure of funds took place.
Still redacted is the SDNY’s evidence for identifying PokerStars and Full Tilt. After fingering the two online poker behemoths, the warrant application notes, “There is probable cause to believe that the Wells Fargo Account Services Account was providing payment services for these online gambling companies in 2008 and 2009.” Then, a page of redacted text appears. In the Wells Fargo warrant application, sections entitled “The Defendant Account is Used to Transmit Gambling Payout Checks,” which continues for several pages, is fully redacted.
In July, Account Services filed a motion for return of property, namely $14 million in funds destined for online poker players. A hearing in the Southern District of California is scheduled for this Friday in the matter despite Rennick’s indictment on bank fraud, money laundering, and illegal gambling charges. He faces up to 55 years behind bars and $1.75 million in fines. The Poker Players Alliance (PPA) has filed an amicus brief on behalf of Account Services asserting that poker is a game of skill and therefore not illegal gambling.
PokerStars and Full Tilt Poker are the two largest online poker sites in existence. According to PokerScout.com, which monitors online poker room traffic, PokerStars boasts a seven day running average of 25,000 real money ring game players, with a 24 hour peak of 35,239. Full Tilt owns a seven day running average of 15,400 cash game players, with a 24 hour peak of 22,259. Trailing the duo is the iPoker Network, a non-USA friendly family of sites operated by Playtech.