Justice Department Goes After Online Gambling

Several individuals and companies have been prosecuted for processing credit cards for gambling sites.

A grand jury in Salt Lake City, Utah, has charged seven people and four companies with multiple felonies related to processing credit cards for gambling Web sites.

The defendants are accused of helping gambling sites process US $150 million in payments from U.S. bettors, according to the U.S. Department of Justice.

The 34-count indictment, issued Wednesday and released Thursday, accuses the defendants of operating a business that helped Internet gambling sites disguise credit-card charges and deceiving credit-card issuers who would have not authorized the charges. Most online gambling is illegal in the U.S.

The indictment alleges that the defendants' businesses assisted Internet gambling sites by arranging fund transfers between U.S. bettors and the sites by using Western Union wire transfers.

Charged in the indictment are Baron Lombardo, 46; Richard Carson-Selman, 51; Henry G. Bankey, 49; Francisco Lombardo, 52; Count C. Lombardo, 43; and Kimberlie Lombardo, 43, all of Las Vegas, Nevada; and Tina I. Hill, 32, of Sandy, Utah, and Las Vegas.

Companies facing charges are CurrenC Ltd., also known as CurrenC WorldWide Ltd., based in the British Virgin Islands; Gateway Technologies LLC, based in Draper, Utah; Hill Financial Services Inc., based in Draper, Utah, and Las Vegas; and BetUS, based in Kanawahke, Canada.

People who facilitate online gambling in the U.S. violate "numerous" federal and state laws, Brett Tolman, U.S. attorney for the District of Utah, said in a press release. “Payment processors who attempt to hide the true nature of the transactions they are conducting and the Internet gambling websites that use these payment processors will be prosecuted and brought to justice," he said in a statement.

The defendants are charged with Racketeer Influenced and Corrupt Organizations Act conspiracy, bank fraud, violations of the wire-wager act, and money laundering. The indictment seeks the forfeiture of $150 million, as well as real estate and vehicles.

The defendants created a Web site they called the Gateway, an automated collector and processor of illegal Internet gambling funding transactions, the DOJ said. The defendants caused the Gateway to misclassify the transactions to Visa and MasterCard, representing that the transactions were for something other than gambling.

The defendants caused the illegal Internet gambling website’s customers to wire funds through Western Union to people in the Philippines, who worked with the defendants, the DOJ said.

None of the defendants were in custody at this as of Friday afternoon. One was arrested in Las Vegas and made an initial court appearance Thursday, and another was expected to surrender to authorities in Las Vegas Friday.

The maximum penalties for the counts in the indictment include 20 years for racketeering conspiracy; 30 years for bank fraud; two years for transmission of wagers/wagering information; and 20 years for money laundering.

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