In breaking news out of the Southern District of New York, Judge Laura Swain has sided with Costigan Media, the parent company of Gambling911, and ordered the warrants and affidavits associated with the seizure of over $30 million in funds destined for online poker players to be unsealed.
Swain submitted 14 pages in support of Costigan Media and the online poker community. In Tuesday’s ruling, she decreed, “The Court is required to order disclosure absent compelling reasons to deny access and even then must employ the least restrictive means of doing so.” Several sections of the warrants and affidavits are redacted, while the complete versions will remain under seal. In addition, Judge Swain mandated, “The Government is directed to make a report to the Court… as to the status of the relevant investigative and seizure activities, within 120 days… and in any event within seven calendar days of any occurrence that obviates the need for continued redaction.”
Interactive Media Entertainment and Gaming Association (iMEGA) Chairman Joe Brennan told Poker News Daily why Judge Swain’s ruling on Tuesday was groundbreaking: “Costigan Media was afforded the same right of access that the New York Times and Washington Post sometimes receive. The Department of Justice has to report back to the Court on an ongoing basis in order to determine whether the remaining information can be released.” On what information was axed from the warrants and affidavits before they were made public, Brennan speculated, “It’s more than likely names of people who are cooperating witnesses or the targets of investigation.”
Poker News Daily has obtained a copy of the affidavit sworn to by FBI Special Agent Dana Conte for the seizure of funds located in a Wells Fargo branch in California. It reads, “There is probable cause to believe that the Defendant Account Services contains property involved in actual or attempted money laundering transactions… In addition, there is probable cause to believe that the Defendant Account contains property that constitutes or is derived from proceeds traceable to the operation of an illegal gambling business.”
The affidavit reveals that the FBI has been tracking “illegal internet gambling businesses” since 2006. The target sites offer online poker, sports betting, and casino games. A six-page section outlining the issuing of payment checks and funds transfers was marked out. Conte’s document concludes with, “I also respectfully request that this Affidavit be sealed until further order of the Court, so as to not jeopardize the investigation of this case.” Conte swore to the affidavit on June 2nd. The document was signed by Judge Theodore Katz, who then ordered it sealed until further notice.
The affidavit filed by Conte relating to funds held in a Union Bank branch discusses the Wells Fargo seizure that took place three weeks prior. On the offshore internet gambling outfits, Conte comments, “Although these gambling businesses are based offshore, the vast majority of their customers are in the United States. Consequently, the internet gambling businesses necessarily rely on the United States financial system to move funds.” Once again, a six-page section was redacted from the record. The Union Bank affidavit was filed on June 24th, 12 days after the actual seizure occurred, and signed by Judge Henry Pitman.
Brennan explained that attorneys for Costigan Media will review the redacted documents and can appeal: “They could appeal to have the documents fully released. Their legal team will take a look at it and decide.” Each affidavit is 13 pages long; half is redacted.
Judge Swain had originally indicated that she would release a decision on the motion to unseal the records last week after lawyers for both sides debated the issue on July 27th. On Thursday, Costigan Media issued a letter to Judge Swain outlining the indictment of Account Services’ Douglas Rennick on bank fraud, money laundering, and illegal gambling charges.
This is going to be very interesting to watch this unfold. We at Make Poker Legal are eagerly awaiting further information on this.