US accuses a Canadian man for laundering over $350m for online gambling

According to indictment filed Thursday, federal prosecutors have accused a Canadian man of laundering more than $350 million for offshore internet gambling operations to skirt US laws prohibiting credit card company from processing payments related to online gambling. Between February 2007 and June 2009, Douglas Rennick, 34, 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.

Rennick was charged with three felony counts related to the alleged scheme by the US Attorney's office in Manhattan. The charges, that highlight the cat-and-mouse struggle that plays out between law enforcement agencies and the online gambling outfits the authorities try to rein in, come as some federal lawmakers have renewed the push to legalize and regulate online gaming so the proceeds could be taxed. Prosecutors are seeking the forfeiture by Rennick of almost $566 million in proceeds from the alleged conspiracy.

In addition, the indictment alleges that 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.

Rennick faces a maximum penalty of 55 years in prison and $1.75 million in fines, if convicted.