US Government Seeking $565 Million From Online Gambling Accounts

There has been many questions raised in the past year as to why the new administration in the US is actively going after bank accounts that are related to online gambling. There is a prevailing thought that this administration would overturn the Unlawful Internet Gambling Enforcement Act, not attack the industry.

This week, however, some clarity came regarding bank accounts that were seized and online gambling operations are being interrupted and the answer all comes down to one thing-money. It may just be that the government can get revenue from online gambling operators without regulating the industry.

On Monday, a federal appeals court upheld a contempt order against two companies that were owned by a Canadian man. The man is Douglas Rennick, owner of KJB Financial Corp. and Account Services Corp., and his lawyers argued that the companies could refuse to abide by the subpoena because an appearance could violate Rennick's Fifth Amendment Rights.

At stake in the case is the real reason that the Justice Department alleges that Rennick opened bank accounts in the US between 2007 and 2009, $565.9 million. That is the amount the US is looking to gain in forfeitures in the case.

According to prosecutors, Rennick's companies misled financial institutions as to where the funds in the bank accounts were coming from. The prosecutors claim that Rennick was using the bank accounts to transfer money back and forth from online casinos to US customers.

This is not the only case currently in the US court system involving bank account fraud having to do with online gambling. While some lawmakers such as Representative Barney Frank are working to overturn the UIGEA and set up a regulated Internet gaming industry in the country, the Justice Department has continued to seize bank accounts relating to online casinos.

If the outcome of their seizures mean hundreds of millions of dollars will be gained, not many can argue the logic at a time when the economy is hitting all-time lows. It may not be the option some current lawmakers would prefer in order to gain revenue from the online gambling industry, but it is an option that is working.

February 3, 2010
Posted By Larry Rutherford
Staff Editor, CasinoGamblingWeb.com
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