Feeds

Feds seek $566m from man in online gambling case

File under 'online crime pays'

Choosing a cloud hosting partner with confidence

Federal prosecutors have accused a Canadian man of laundering more than $350m for offshore internet gambling operations to skirt US laws prohibiting payments to American citizens trying to cash out their winnings.

Douglas Rennick, 34, was charged with three felony counts related to the alleged scheme by the US Attorney's office in Manhattan. Between February 2007 and June 2009, he and several unnamed co-conspirators established sham businesses that provided false information to banks so they could carry out large financial transactions that otherwise would have been barred, according to an indictment filed Thursday.

The charges highlight the cat-and-mouse struggle that plays out between law enforcement agencies and the online gambling outfits the authorities try to rein in. In 2006, federal law prohibited credit card companies from processing payments related to online gambling. Given the continued popularity of internet gaming in the US, money laundering schemes like the one alleged Thursday aren't surprising.

What is unexpected are the astronomical amounts of money involved. Prosecutors are seeking the forfeiture by Rennick of almost $566m in proceeds from the alleged conspiracy. Not a bad haul for a couple years of work.

The indictment claims Rennick founded a series of businesses with names including KJB Financial Corporation, My ATM Online, and Alenis Limited to defraud banks such as Washington Mutual and Wells Fargo. The faux businesses claimed they were involved in issuing affiliate cheques and auto rebates when in fact they were almost exclusively used to funnel money to US-based customers of online gambling sites, the indictment alleges.

If convicted, Rennick faces a maximum penalty of 55 years in prison and $1.75m in fines. Curiously, the charges come as some federal lawmakers have renewed the push to legalize and regulate online gaming so the proceeds could be taxed. ®

Beginner's guide to SSL certificates

More from The Register

next story
FYI: OS X Yosemite's Spotlight tells Apple EVERYTHING you're looking for
It's on by default – didn't you read the small print?
Russian hackers exploit 'Sandworm' bug 'to spy on NATO, EU PCs'
Fix imminent from Microsoft for Vista, Server 2008, other stuff
Microsoft pulls another dodgy patch
Redmond makes a hash of hashing add-on
'LulzSec leader Aush0k' found to be naughty boy not worthy of jail
15 months home detention leaves egg on feds' faces as they grab for more power
Kill off SSL 3.0 NOW: HTTPS savaged by vicious POODLE
Pull it out ASAP, it is SWISS CHEESE
Facebook slurps 'paste sites' for STOLEN passwords, sprinkles on hash and salt
Zuck's ad empire DOESN'T see details in plain text. Phew!
China is ALREADY spying on Apple iCloud users, claims watchdog
Attack harvests users' info at iPhone 6 launch
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Cloud and hybrid-cloud data protection for VMware
Learn how quick and easy it is to configure backups and perform restores for VMware environments.
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.