KABOOM! Is It Real — Or Is It The Feds? Agents Created ‘Payment Processor’ As Part Of Undercover Sting Designed To Infiltrate Corrupt Companies; 11 Bank Accounts And 10 Domain Names Seized; 3 Individuals, 2 Firms Indicted

One of the domain name seizure notices in a federal sting operation in which agents created a "payment processor" to infiltrate operations alleged to be corrupt.

Kaboom! In a move that may send shockwaves across the fraudulent HYIP, autosurf, sports-betting and “arbitrage” universes domestically and offshore, Maryland’s top federal prosecutor has released details of a two-year long undercover sting in which federal agents created a “payment processor” to infiltrate illegal gambling operations.

Using methods straight out of the scammer’s playbook and turning the playbook back on the alleged scammers themselves, the federal operation resulted in the seizure of 11 bank accounts in the United States, Guam, Panama, Malta, Portugal and the Netherlands, prosecutors said.

Ten domain names associated with illegal gambling sites also were seized.

“It is illegal for internet gambling enterprises to do business in Maryland, regardless of where the website operator is located,” said U.S. Attorney Rod J. Rosenstein. “We cannot allow foreign website operators to flout the law simply because their headquarters are based outside the country.”

The name of the Feds’ “payment processor” was Linwood Payment Solutions — and its website now serves this message:

“Linwood Payment Solutions is a Department of Homeland Security Undercover Business set up to identify and prosecute companies accepting and paying out funds for U.S. customers who gamble online illegally.

“If you have questions regarding funds withdrawn from your bank account for gambling purposes contact the online gambling company you provided your banking information to.”

As part of the sting, the U.S. Department of Homeland Security (Homeland Security Investigations or HSI) “obtained a business address near Atlantic City, New Jersey,” according to court records.

HSI then created a website for the “payment processor,” opened bank accounts, set up a “payment processing plant” and staffed it until it could process “thousands” of transactions daily.

Undercover operatives then began to mix with “top managers of gambling organizations,” discussing fees and contracts. Having established ties to the alleged scammers, Linwood began to process payments — in excess of $33 million in all, involving more than 300,000 transactions, according to court records.

Seized domain names include:

  • Bookmaker.com
  • 2Betsdi.com
  • Funtimebingo.com
  • Goldenarchcasino.com
  • Truepoker.com
  • Betmaker.com
  • Betgrandesports.com
  • Doylesroom.com
  • Betehorse.com
  • Beted.com

Seizure notices now adorn the websites.

Indicted were ThrillX Systems Ltd., d/b/a BetEd; Darren Wright and David Parchomchuk of British Columbia, Canada;  K23 Group Financial Services, d/b/a BMX Entertainment; and Ann Marie Puig, 35, of San Jose, Costa Rica.

“The proceeds from illegal Internet gambling are often used to fuel organized crime and support criminal activity,” said William Winter, special agent in charge of ICE’s HSI unit.

About the Author

2 Responses to “KABOOM! Is It Real — Or Is It The Feds? Agents Created ‘Payment Processor’ As Part Of Undercover Sting Designed To Infiltrate Corrupt Companies; 11 Bank Accounts And 10 Domain Names Seized; 3 Individuals, 2 Firms Indicted”

  1. Man are the conspiracy theorists going to love this information. Just think of them claiming entrapment, “evil guberment” out of control, stopping/restricting free enterprise, violating the commerce clause, keeping the little guy down, you all know the rest of their mantra.

    Just glad to see the government agencies are catching on at stopping these criminals by turning the tables on them. What is really going to be telling is how far down the food chain they go with charges being filed against people in these programs. This could be a bigger chill to the “Players,” than using fake payment processors.

      (Quote)

Leave a Reply