Light Sentence for Gambling Payment Processor Rennick

September 21, 2010 | News Category: Gaming Law

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Douglas Rennick seems to have gotten off easy, with a very light sentence handed down by US District Judge Sidney Stein, even though he was originally charged with money laundering, and running an online payment processing company that allowed US players to gamble offshore.

While money laundering usually carries quite a stiff sentence, Rennick, who was sentenced last week, was given only six months probation although he plead guilty.

In May 2010, Rennick was caught by the US federal authorities, who charged him with processing money for online gambling sites to an amount of $350 million in transactions. This large amount of money was transacted over a two year time period. It seems that the online payment processor gave financial institutions in the United States, false information, in order to be able to do the transactions, and to cover up what the company was doing since it is illegal to process online gambling transactions in the US.

With a guilty plead offered, and accepted by the court, Rennick said the following in May 2010 at his court case: "I had a business that transferred money from offshore gambling sites to American players inside the Southern District of New York."

Although Rennick had to give over $17.1 million to the federal authorities, and he got a sentence of six months probation, it seems a somewhat unusual judgment since when the court case began, he was looking at the possibility of a very lengthy jail sentence, and also having to forfeit hundreds of millions of dollars, and not only $17.1 million.

One wonders why Rennick got off so lightly when the US Department of Justice has been taking quite a hard line when it comes to those who have violated the current online gambling payment processing laws. There are many who are speculating that perhaps the reason for this light sentence is because Rennick may have agreed to help the US Department of Justice with other investigations regarding online payment processing in the future.

Interestingly, this light sentence came hot on the heels of a surprising development in Daniel Tzvetkoff’s case. Tzvetkoff was the head of Instabill, another online payment processor, who had been imprisoned in New York, and had not been granted bail. However, he recently was granted bail, and it seems that some kind of a deal, or plea bargain, has taken place between Tzvetkoff and the US federal authorities. Some are speculating that perhaps he too has agreed to help the feds in other investigations regarding similar crimes.