A hearing in the motion for return of property by the online poker payment processor Account Services that was scheduled to occur on Friday in the Southern District of California has been postponed. The reason for the cancellation of the hearing was “to give the court more time to review briefings on the matter,” according to an e-mail sent by Joe Brennan, Chairman of the Interactive Media Entertainment and Gaming Association (iMEGA). The news follows the indictment of Account Services’ Douglas Rennick, who faces up to 55 years in prison and a $1.75 million fine.

Attorney Jeff Ifrah told PocketFives.com, “People should be alarmed. The Government can seize a lot of money and not have to defend itself. They took money, they indicted someone, and everyone is now out of luck.” Ifrah added that the Government filed a motion to dismiss the case. Instead, its attorneys argued that it should become part of the Government’s legal actions against Account Services and Rennick, which are taking place in the Southern District of New York.

The hearing in California was originally scheduled for last Friday, August 14th, but Judge Jeffrey Miller issued a notice delaying the proceedings by one week. In addition to Account Services seeking the return of $14 million in funds, the Poker Players Alliance (PPA) filed an amicus brief in the case noting that poker is a game of skill and therefore not illegal gambling. The Southern District of California must now decide whether to grant the Government’s motion to dismiss or schedule a hearing.

The U.S. Government has submitted its brief to the California court. In it, it addresses Account Services’ motion for the return of $13 million seized from a Wells Fargo branch in Escondido and $1 million contained in a Union Bank branch in San Diego. The former funds were frozen on June 2nd based on a warrant sought by FBI Special Agent Dana Conte. About 10 days later, funds in the Union Bank account were seized, despite the warrant not being filed until June 24th. A partially redacted version of the warrant application was released this week, naming PokerStars and Full Tilt Poker as sites that conducted business with Account Services.
Rennick was charged with bank fraud, money laundering, and illegal gambling. He is a Canadian citizen and has, to Ifrah’s knowledge, not yet come forward to U.S. authorities. A brief filed by Account Services following the Rennick indictment noted, “The Government is trying to prevent ASC from recovering its property by arguing that the criminal indictment and notice of criminal forfeiture against Mr. Rennick abrogates any basis for this Court to exercise jurisdiction over ASC’s claim.” It surmised, “ASC would be barred from raising any challenge to the seizure of its property until the criminal prosecution of Mr. Rennick is resolved, which could mean months or – more likely – years.”

Account Services noted that it filed its motion for return of property before Rennick was indicted earlier this month. The redacted warrant applications revealed that Rennick was a person authorized to sign on the Account Services account and was also associated with Alenis Limited, a company named in his indictment. The application adds, “Rennick has processed payments for internet gambling companies through other corporate entities at other financial institutions.” He told bank officials that the funds would not be used for gambling that was illegal under U.S. or Canadian law.

PokerStars’ and Full Tilt Poker’s mention in the warrant application filed by Conte for the Union Bank funds is as follows: “Account Services has previously provided payment services for companies providing online gambling services, including PokerStars and Full Tilt Poker, the largest internet poker businesses in operation.” Account Services allegedly conducted business with the two sites in 2008 and 2009. The accounts in the Wells Fargo and Union Bank branches were shuttered by J.P. Morgan Chase Bank in December of 2008.

We’ll keep you posted on the latest on the Account Services case. Check out the latest by visiting the Poker Legislation forum.