News

Tuesday, 31 May 2011 02:40

As part of the US Federal clampdown on online gambling operators flouting the law, a sophisticated sting operation has caught its first victim, BetED Sportsbook.

With its office in Costa Rica now closed and its several bank accounts seized by US authorities, BetED is unable to continue operating its online gambling and sportsbook business. Up until this week, this lucrative business has been siphoning off millions of illegal US gambling dollars for its owners by flouting US gambling laws.

The company, which was based in the Costa Rican capital of San Jose, operated bank accounts in several different countries to move funds around and accept payments from a US based payment processor. Unfortunately for BetED, that payment processor had been created by the US Dept of Homeland Security. It had been set up as a means of identifying and catching online gambling operators red handed with their cyber hands in the till.

That US based payment processor was Linwood Payment Systems, which BedED is alleged to have used to collect and wire transfer gambling proceeds totalling many millions of dollars to bank accounts located in Panama, according to Homeland Security Investigations testimony. The Baltimore Grand Jury unsealed an affidavit on Tuesday that included indictments for illegal gambling and money laundering made against three individuals and two companies. Assets seized from the two gambling companies included a total of eleven off shore bank accounts along with ten domain names.

The indictment was made against a company called ThrillX Systems, which was operating under the name of BetEd, as well as two Canadians, David Parchomchuk and Darren Wright. It accuses the men of using a US Pacific Territory of Guam bank account controlled by Linwood Systems to complete funds transfers out of the United States to a Credicorp bank account owned by ThrillX Systems in Panama. The seizure of this bank account among others has effectively left BetED closed for business.

The same affidavit also provides details of approximately 300,000 transactions worth over $33million wire transferred by Linwood for a number of gambling companies between Dec 2009 and Jan 2011. Those companies included Ultimate Bet and Absolute Poker.

With the Department of Justice intent on flushing out and closing down ever more offshore based online gambling companies still operating in the US, many are playing it safe by severing ties with their US customers and withdrawing from that market. One top operator, Bodog, has even gone so far as to re-brand their website onto the bodog.eu domain. This domain is registered outside the US jurisdiction, effectively protecting their website from the possibility of US officials seizing bodog.com and closing their Internet presence down.