By Van Smith
Published by City Paper, Oct. 28, 2009
As the Maryland-based federal probe of on-line gambling continues, the latest move to show up in court records in Baltimore is the seizure of $365,366.69 from two bank accounts in the name of Atrium Financial Group (AFG). According to the affidavit in the case (below), Delaware-based AFG disburses money to on-line gamblers, including those who try their luck using GoldenCasino.com. City Paper has been unable to reach representatives of AFG and GoldenCasino.com for comment.
The AFG seizure—unlike several others reported recently by City Paper—is supported by an affidavit that was not sealed (see Atrium Financial Group affidavit). The 13-page sworn statement by Immigration and Customs Enforcement (ICE) special agent Augusta Ferenec, who is based in New Orleans, La., provides a peek into the complexities of the investigation. Signed on Sept. 4 by U.S. District Court magistrate judge Beth Gesner, the warrant was filed in the court records on Oct. 22.
According to Ferenec’s affidavit, the investigation leading to the AFG seizures dates to July 14, 2008, when Louisiana State Police (LSP) officers opened an “undercover gambling account” with GoldenCasino.Com, and then later requested a payout. The first check–from a Canadian outfit called Interco Finance Corporation (IFC)–bounced. Eventually, a second check came, this one from AFG. Thus, the investigation established that GoldenCasino.com was using both IFC and AFG as payment processors for its on-line gambling patrons. Ferenec explains in the affidavit that a fourth business–Con-Tex Converters, another Canadian firm–entered the picture as investigators followed the global movement of funds.
For instance, an AFG account with Mercantile Bank received wire transfers between Dec. 2008 and Jan. 2009 amounting to more than $1.5 million. The money came from a Con-Tex bank account in Cyprus and a combined Con-Tex/IFC bank account in Canada. During the same timeframe, Ferenec’s affidavit continues, AFG cut 1,473 checks from that account, at least two of which went to people in Maryland. In Aug. 2009, investigators talked to one of the Maryland recipients, who admitted the proceeds had come from gambling.
In all, Ferenec’s affidavit maps out a total of nearly $6.3 million wired internationally by either Con-Tex or IFC to AFG bank accounts in the U.S. The AFG accounts, which the affidavit says have all been closed by the banks due to suspicions that the money was tied to illegal gambling, were held with Mercantile, Sovereign Bank, Wachovia Bank, National City Bank, and TD Bank North. The international wire transfers from Con-Tex and IFC were the sole sources of funds in the AFG accounts, the affidavit explains.
The two AFG bank accounts targeted for seizure are with Fifth Third Bank and Wilmington Savings Fund Society. The Fifth Third account, from which $124,028.88 was seized, received about $3.3 million in wire transfers from Con-Tex and IFC between Dec. 2008 and June 2009, the affidavit explains. Nearly 4,000 checks were cut from the account, totaling about $3.1 million disbursed to people in the U.S. During July and Aug. 2009, 35 of those checks were issued to Marylanders. The amount of money entering AFG’s Wilmington Savings account is not specified in the affidavit, which explains that about 575 checks were cut from the account, one of which was mailed to a Texan who “confirmed to the bank that the check was proceeds of online gambling.”
Ferenec’s affidavit says it’s likely that money will continue to enter the targeted accounts “for a period of time” after the warrants are executed, because those involved “will be unable to promptly stop the flow of funds or inform all of their contacts of this investigation.” Thus, Ferenec requests that the warrant order the banks to allow the deposits to continue, but not any attempted debits, and that “ICE be allowed to periodically remove such funds” during a 21-day period after the warrants are executed.