More Account Seizures in the United States

The online gambling industry has not yet got over the news of the account seizures through the Southern District of New York and the subsequent indictment of Douglas Rennik. And it has been riddled with a fresh assault of more account seizures.

This time the scene has shifted to Maryland. The Baltimore City Paper reported that the US investigators in Maryland had filed for forfeiture of three bank accounts of HMD Incorporated, which is a payment processing company. Seizure warrants have been issued for the accounts. The reasons given for the seizure were that the accounts handled the proceeds of an illegal gambling business and were involved in money laundering transactions. Robert J Mignogna, Maryland State Police Trooper and United States Immigration and Customs Enforcement Task Force officer signed the application and affidavit for the seizure warrants. All three accounts are located in California. One is a Citibank account in Long Beach California, another is a Bank of America in La Habra California and the third is also a Bank of America in California. The office bearers of HMD Incorporated were not available for comment. These warrants presently remain under seal and therefore further details are not available.

This is not the first time that a magistrate from Maryland has issued warrants for seizure of bank accounts. On July 20 Judge James K. Bredar had issued three warrants for seizure of Bank of America accounts in Anaheim, California. All the accounts were owned by Electracash Incorporated and the charges were the same. These warrants will be unsealed automatically on January 20, 2010 or earlier through a judicial order. However, the warrants issued through the Southern District of New York were unsealed. This followed a court case filed by Costigan Media, which owns the Gambling911.com, in which the judge ruled that there was no compelling reason for the sealing. Electracash is owned by Edward Courdy, who has earlier been charged with money laundering. Courdy’s attorney, Stanley Greenberg, declined to comment when contacted by the Baltimore City Paper. Likewise Electracash’s director of marketing, Richard Cornejo, did not return calls made by the paper.

The case of the account seizures is getting more curious. In the case of iMEGA versus the Department of Justice, the US 3rd Circuit Court of Appeals in Philadelphia opined that the UIGEA was not a federal law and could be applied only in those states where Internet gambling is explicitly illegal. Computer wagering is legal in New York and Internet gambling is legal in Maryland. This does raise the question as to why the warrants were issued in these two states.