Looking at upwards of 55 years in prison for his role processing some $350 million in online poker payments, Douglas Rennick came out of court with what can only be termed as having hit his miracle card last week, when the judge handed down his sentence and he received a mere 6-months probation!
You may remember Rennick was at the center of the controversy last year when $34 million in poker payments were seized by the government. In June 2009 the Department of Justice in conjunction with the Southern District of New York seized the $34 million, belonging to approximately 27,000 online poker players, from four separate banks. The poker sites themselves covered the cost to the players, but this was the first real sign that the government was going to seriously prosecute UIGEA violators.
Rennick initially fought the ruling tooth and nail, even filing his own counter-lawsuit, which brought on the unintended result of having the federal prosecutors ‘throw the book at him’, so to speak. Once Rennick realized how hopeless his case was he eventually started cooperating, and forfeited some $17 million, which is likely the main reason for his lenient sentence.
It has been a tough time for payment processors since this initial salvo by the DOJ: Another payment processor Daniel Tzvetkoff was recently detained for processing some $550 million in online poker payments, and is now free on $1.5 million bail –and rumored to also be cooperating with prosecutors.
A third payment processor, Michael Olaf Schuett, who is also awaiting trial for processing $70 million in online poker payments was recently ordered back to jail. Schuett, who was free on bond, has been sent back to jail as a flight risk, after his girlfriend informed authorities that she was worried he would leave the country; costing her the $100,000 unsecured bond she posted.
It’s strange that all three of these payment processors decided to test their luck by entering the United States, as most in the online gaming industry –even peripherally like payment processors—choose to avoid entering the US at all costs.
It will be interesting to see how these other cases play out now that Rennick’s sentence has come down, and was about as light as you can get. It will also be interesting to see the reasons for the lenient sentence; whether because of Rennick’s cooperation, or if the possibility of online poker legislation played any role in the decision.
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Written by Gerry Poltorak on September 30th, 2010