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Concern Grows Over U.S. Attorney’s Poker-Related Lawsuit

U.S. Attorney Charges Man with Three Counts of Conspiracy


Douglas Rennick has been indicted for three counts of conspiracy.Outrage. That’s how Greg Raymer, the 2004 world champion of poker, describes his sentiment after news broke late last week that a U.S. Attorney was suing Douglas Rennick, allegedly the owner of several poker payment processors, for nearly $566 million in recovered money for violating three counts of U.S. Code.

“Anytime something immoral happens, I’m outraged by it. And I consider what these prosecutors have done to be immoral,” said Raymer, a patent attorney and a member of the board of directors of the Poker Players Alliance, the industry’s largest advocacy group. “If they actually think online poker is illegal, they’re incompetent. That’s just not an appropriate interpretation of any of these federal laws.”

Lev L. Dassin, the acting U.S. Attorney for the Southern District of New York, filed an indictment against Rennick for bank fraud conspiracy, money laundering conspiracy, and gambling conspiracy.

Rennick is alleged to have provided payment services to online poker players through several companies, including My ATM Online, Alenis Limited, KJB Financial Corporation, Account Services Corporation and Check Payment Financial Co. While some of these names may be familiar to online poker players, Raymer says that it by no means implies Rennick’s guilt.

“Casino games aren’t illegal under any federal law for online gambling sites, only sports betting,” said Raymer.

The 13-page indictment indicates that Rennick, a Canadian citizen, made payments on behalf of online companies for “different types of online gambling, including poker, blackjack, slot machines, and other casino games.” The indictment doesn’t accuse Rennick of making any payments involving sports bets.

Both Dassin and the Southern District of New York declined to comment to Card Player about the indictment or the ongoing investigation.

This is the same district court that seized approximately $30 million in online poker funds in early June of this year. While the poker sites swallowed that total and reimbursed the players whose checks had unexpectedly bounced, Rennick and Account Services sued to get the money back, according to Raymer.

Greg Raymer is outraged by the recent poker indictment.“If you have money seized from you and you think it was improper, you file a lawsuit to recover the money. That’s the way seizure laws work,” said Raymer, who believes Rennick is being punished for his actions against the U.S. Attorney’s office. “You’d think if they really had aspirations to put him in the jail in the beginning, they might have done that first rather than seize the money first, or they might have done them simultaneously. That’s why this doesn’t smell right.”

With the charges levied upon him from the U.S. Attorney’s office, Rennick could face up to 55 years in prison for the three charges.

While the online poker community has decried the UIGEA, an act that was first passed in 2006 that made it illegal for banks, credit card companies, and payment processors like PayPal to transfer funds from gamblers to online casinos, and vice versa, there is actually no mention of the UIGEA in the U.S. Attorney’s case against Rennick.

In fact, Rennick can only receive a total of five years in jail for the gambling charge, even if he were convicted and held to the maximum penalty. The much harsher sentences correlate with the bank fraud and money laundering charges.

For the gambling charges, the U.S. Attorney cites New York Penal Law, which describes gambling as risking “something of value upon the outcome of a contest of chance.” New York Penal Law describes “a contest of chance” as any game “in which the outcome depends in a material degree upon an element of chance, notwithstanding that skill of the contestants may also be a factor therein.”

The emphasis of the indictment centers on the bank fraud charge however, stating no less than seven times within three pages that Rennick either provided false or misleading information to the banks.

“Rennick did not disclose to Washington Mutual Bank that KJB Financial Corporation would process payments from internet gambling companies,” the indictment reads at one point. “Instead, Rennick falsely and misleadingly represented…that his company would issue checks ‘for the following reasons’…”

The reasons Rennick allegedly gave included affiliate checks, rebates, refunds, sponsorship checks, and minor payroll.

Rennick could also be sentenced for up to 20 years on the money laundering charge. The indictment alleges Rennick and other unnamed defendants “did transport, transmit, transfer…funds from or through a place outside the United States to a place in the United States with intent to promote the carrying on of a specified unlawful activity, to wit, the operation of an illegal gambling business.”

Of course, the debate then centers on what constitutes an “illegal gambling business” — certainly not an online poker site, Raymer and other poker advocates would say.

“You know, the funny thing is, even if we were to assume that everything about this is illegal, how much money did this guy make without ever setting foot inside the U.S.?” said Raymer. “If what he did was illegal, in terms of what he describes to the banks, this isn’t the kind of thing that most countries would extradite you for. So if that’s what happened and he’s found guilty or if he settles of whatever, he’s made millions of dollars and just wouldn’t be able to come to the U.S.”

The U.S. Attorney’s office seeks nearly $566 million from Rennick, a total it claims is “property representing the amount of proceeds obtained as a result of the bank fraud conspiracy offense.” The indictment alleges approximately $379 million “was involved in the money laundering offense or is traceable to such property.”

If it were to happen, the forfeiture of $566 million would be among the largest in the history of the Southern District of New York, according to the U.S. Attorney’s office.

Raymer predicts that these developments will have little to no effect to the immediate lives of online poker players in the U.S.

“I think the only real impact it’s going to have is the fact that it’s scaring people,” said Raymer, who says he doesn’t expect any of the sites’ payouts to be affected, pointing to the fact that all poker players still received their funds despite the U.S. Attorney’s June seizure of funds.

Still, Raymer says that online poker players need to continue to fight to hold their ground, encouraging people to write their members of Congress and to join the PPA if they haven’t already.

“Join the PPA if you’re not already a member. We’re fighting this,” said Raymer. “Congress will listen. If it’s only one person, they don’t have to listen very hard. But when it’s millions of members of the PPA, then they have to listen.”



almost 13 years ago

How about you spell check before you make a racist comment genius?

This lawsuit stands no chance if the basis is "illegal gambling activity".



almost 13 years ago



almost 13 years ago

Don't see why this guy would care. I'd just flip off the US and enjoy the rest of the world.


almost 13 years ago

Seeing as this is the same DA that seized $30 million I can only venture to say that Dassin once lost his shirt playing poker and has some deep psychological scars.

Good luck with that lawsuit Lev...just another bad beat waiting to happen to you.


almost 13 years ago

Keep the racist crap off the post. Poker has a hard enough time gaining respectablilty without ignorant comments like that.


almost 13 years ago

legalize it in our country let our casinos run online gaming TAX AND REGULATE IT Raymer and Howard lederer + cronies could care less about poker laws their just lining their greedy pockets they sued the world poker tour without them they would just be another grind it out pro poker players with a leather ass Lederer never plays online if was such a skill game online why ,doesn't he play ONLINE ALL THE TIME ASk MATASOW WHO,S LOST MILLIONS ONLINE BUT EXCELS IN LIVE POKER play if its so easy and such a game of skill like live poker its night and day live and online please tell the truth about the difference let the people play and let the money stay here in the good ole USA!!!!!!!!! stop lining THE POCKETS of these non tax paying foreign companies


almost 13 years ago

Why is everyone so quick to believe this guy is guilty of bank fraud? First off there is no way you can process 500 million in checks and not know what they are for. You'd think after the first 100 million the bank might do a more detailed due diligence if a only a general business description was given in the beginning? The wires also were coming in by the millions from Cyprus (a know online gambling haven). What else could the bank possibly think those checks were for? Also when it comes to fraud there has to be a harm. In this case the banks likely made millions in fees. Uh, how were they hurt? In turn the banks would have paid hundreds in thousands in taxes to the government. Uh, how was the government hurt? Also fraud requires a proper due diligence in order for you to be a victim. Given the large volume and the fact this went on for years, the banks obviously did zero due diligence if they truly had no idea what the checks really were for (which is IMPOSSIBLE that did not know). This fraud charge is a distraction because the SDNY is petrified to take on a poker case. They trumped up these charges and brilliantly spun it in the press. Anybody who has judged this person without thinking about everything I just wrote should be ashamed. All he did was put money back into the hands of American citizens who essentially were playing a video game in the comforts of their homes. Should someone doing that go to jail? The banks were all in on it and are now playing dumb to cover their own hides. They should also be ashamed.