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David Baines: The ThrillX is gone - Online gambling operators missing in action

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Costigan Media interviewed by David Baines:

 

Where in the world are David Parchomchuk and Darren William Wright?

 

They are the two B.C. men who were indicted by a federal grand jury in Maryland last month for allegedly engaging in illegal online gambling and money laundering. 

 

The indictment against the two men and their B.C.-registered company, ThrillX Systems Ltd. (which did business as BetEd.com) was filed on April 26, but not released until earlier this week.

 

According to a release issued by the U.S. Department of Justice in Baltimore, the B.C. defendants were ensnared in an undercover payment processing sting operation, which had been set up to catch illegal online gambling operators.

 

The release did not indicate whether Parchomchuk and Wright had been arrested, and I was unable to reach anybody at the DOJ’s office in Baltimore who could apprise me of their status.

 

The best account I have found so far is from Chris Costigan, publisher of Gambling911, a Miami-based news service that specializes in reporting on the online gambling industry.   

 

Costigan wrote that the two men were planning a trip to Guam, where BetEd had bank accounts. Little did they know, but Guam is a U.S. territory. He suggested that, had they known, they never would have planned to go there. Since 2006, the U.S. federal government has arrested a whole string of offshore operators who have dared to step on U.S. soil.

 

But the two B.C. men never mad it to Guam: “Last-minute shoulder surgery stopped the process,” Costigan reported. (He did not say who required the surgery, but I assume it was one of the two men). 

 

The DOJ then applied to unseal the indictment. Why, is not clear. Wouldn't it be better to lie in the weeds until some future opportunity to arrest them presented itself? 

 

The motion to unseal the indictment was filed by Assistant U.S. Attorney Richard Kay on May 20. It states that the grounds for originally sealing the indictment would soon lapse as “essential information about the investigation is being released voluntarily by the government in a related matter.”  

 

The only other related matter I am aware of is a separate indictment against K23 Group Financial Services (which did business as BMX Entertainment) and its owner, Ann Marie Puig of San Jose, Costa Rica. They were also caught in the sting operation and are facing the same charges.

 

According to Costigan, Puig regularly flies between Costa Rica and Miami to visit her parents. However, she changed her flight plans after the DOJ conducted a massive crackdown on offshore gambling operators. On April 15, the DOJ announced charges against 11 people - including the founders of PokerStars, Full Tilt Poker and Absolute Poker - with bank fraud, money laundering and illegal gambling. The day has since been dubbed “Black Friday” by online gambling operators.

 

It’s quite possible that the DOJ realized that, after this heavily publicized sweep, it was unlikely any other offshore operators were going to step on U.S. soil.

 

In any event, it now appears that Parchomchuk and Wright are fugitives from U.S. justice. Perhaps they are in Vancouver, perhaps they are in Costa Rica. According to the DOJ,  their company maintained offices in both locations. Neither jurisdiction is necessarily a safe haven. Both cooperate with U.S. authorities in extradition matters. 

 

Meanwhile, the BetEd.Com website has been seized by U.S. federal authorities. Check it out. It is a classic American-style show of force.

 

But what of BetEd customers?  As Costigan points out, they appear to be the biggest losers, at least for now. One reader - a Canadian - told me he has $1,300 in his BetEd account and no way to access it, as all of the company's bank accounts have been seized by the U.S. government.

 

Costigan said BetEd customers should eventually be able to file claims with the U.S. Attorney, just as customers of the popular payment processor, NETeller, were able to do after the U.S. government shut down that operation. "That process took approximately nine months, however," Costigan noted.

 http://communities.canada.com/vancouversun/blogs/howestreetfiles/archive/2011/05/27/david-baines-the-thrillx-is-gone-online-gambling-operators-missing-in-action.aspx

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