Late last week, an article in the San Diego Union-Tribune newspaper revealed that U.S. District Judge Jeffrey Miller had sided with the U.S. Department of Justice. As a result, online poker funds that were seized by the Southern District of New York belonging to Account Services will remain under guard until a criminal investigation of Douglas Rennick is completed. A total of $14 million was seized from Account Services in Union Bank and Wells Fargo branches in California. An August 21st hearing in the case was postponed indefinitely following Rennick’s indictment.

Interactive Media Entertainment and Gaming Association (iMEGA) Chairman Joe Brennan, who has been closely following the action in the Southern District of California, told PocketFives.com, “The reason why the judge postponed the hearing was to consider the request of the Justice Department. Federal judges have a lot of discretion. This is a very simple case of a Federal judge deferring to law enforcement. It’s unfortunate for the parties involved, but they’re on the losing end of something that’s fairly common.” The hearing was originally scheduled for August 14th before being pushed back to the 21st.
Account Services’ lawyer, Michael Pancer, told PocketFives.com that his client plans to appeal in the near future: “We are planning to appeal to the Ninth Circuit. We will file the notice of appeal this week.” In July, Account Services filed a motion for return of property, namely $14 million that it claims was unlawfully seized by the Southern District of New York as a result of a warrant application sworn to by FBI Special Agent Dana Conte. In the case of the Union Bank account, it argued, the funds were seized around June 12th, while the associated warrant was not issued until 12 days later.

Rennick is a Canadian citizen and is presumably still in his home nation. When he will surrender to or settle with U.S. authorities is anyone’s guess. He was indicted on bank fraud, money laundering, and illegal gambling charges and faces up to 55 years behind bars. On Rennick’s future, Brennan speculated, “That remains to be seen. Rennick may contest his criminal indictment, which everyone assumes he’s not going to, but nobody has heard from Rennick. He may be completely innocent of what they’ve charged him with.” The Department of Justice is also seeking the return of funds obtained as a result of his actions. Rennick was allegedly a signer on Account Services’ holdings.

Among those who rallied in support of Account Services’ motion for return of property was the Poker Players Alliance (PPA), which submitted an amicus brief in the case. The 1.2 million member strong lobbying group argued in its brief that poker is a game of skill and therefore falls outside the boundaries of illegal gambling. Whether or not that is a true statement seems to be on hold for the time being in California, which has seen movement for legalized intrastate online poker in recent months. Marc Zwillinger, whom the Union-Tribune claims represents the players, told the newspaper, “It seems the government switched gears and they seem to have done it to specifically avoid the question of whether online gambling violates federal law.”

Shortly after Rennick was indicted, Account Services submitted a reply brief to Judge Miller noting, “The government’s argument is based upon the premise… that ASC is Mr. Rennick’s ‘alter ego.’ Such an allegation is not only contrary to law… but surreptitiously would allow the government to criminally forfeit ASC’s accounts without having to obtain a grand jury indictment.” The company asserts that Rennick’s criminal investigation could take months, or even years, to complete.

Online poker players affected by the Southern District of New York’s actions were reimbursed and, in some cases, issued cash bonuses by the sites for their troubles. Brennan explained, “The poker playing community has been affected. They have every right to be upset, but it’s my understanding that most, if not all, of the affected players have been compensated. They’ve had their accounts credited and have had bonuses tacked on. Players have been inconvenienced, but they were not injured in the long-term.” Conte’s warrant application identifies Full Tilt Poker and PokerStars by name as doing business with Account Services in 2008 and 2009.

Stay tuned to PocketFives.com for the latest in the Account Services online poker funds seizure.