In the summer of 2007, a Canadian citizen named Douglas Rennick opened a business account at a California branch of the Washington Mutual Bank.
This, prosecutors in New York allege, was the first step in a money trail that led them to charge Mr. Rennick yesterday with bank fraud, money laundering and illegal gambling as part of a crackdown against foreign online gambling.
According to an indictment unsealed in New York yesterday, Mr. Rennick opened a series of accounts in the United States to transfer $350-million from a bank in Cyprus to U.S. online gamblers who had played poker, slot machine "and other casino games."
Mr. Rennick, 34, is currently in Canada, U.S. officials say.
Yusill Scribner, a spokeswoman for the office of the U.S. Attorney for the Southern District of New York, declined to comment when asked about the prospect of extraditing him. Canada will extradite its citizens only if the laws under which they are charged are similar to Canadian laws.
"It raises the issue whether one country can apply its law to citizens of another country," said Javad Heydary, a Toronto lawyer with experience in gaming law.
"We do not have anything close to the U.S. legislation," he said, alluding to the U.S. Unlawful Internet Gambling Enforcement Act.
Mr. Heydary said that while, technically, Mr. Rennick is charged with offences that exist in Canada, the United States has been much more aggressive in attacking online gambling.
Because it is harder to shut down offshore servers, U.S. prosecutions have focused on third-party transaction processors such as Mr. Rennick, or people who could be arrested in the United States.
An industry lawyer questioned yesterday's charges, saying that Mr. Rennick intentionally handled only winnings from poker games.
As a game of skill rather than chance, poker is legal in New York State, said Jeff Ifrah, a lawyer for the Interactive Gaming Council, the Vancouver-based group that represents online gambling companies.
Mr. Ifrah said the indictment against Mr. Rennick followed the New York prosecutors' attempts earlier this summer to freeze accounts belonging to two companies, Allied Systems and Account Services, which held millions of dollars owed to people who won at online poker.
According to the indictment, Account Services was one of several firms Mr. Rennick controlled to disburse funds from offshore Internet firms.
The indictment alleges that Mr. Rennick tried to camouflage his financial transactions, telling the banks that the accounts he had opened were for issuing rebates, refunds, sponsorship checks and minor payroll processing.
U.S. prosecutors have focused on foreign operators while allowing private U.S. companies to run online horse betting games, said Toronto lawyer Michael Lipton, a specialist in gaming law.
In 2007, two Canadians, Stephen Lawrence and John Lefebvre, the founders of Neteller PLC, a Britain-based company that processed Internet gambling transactions, were arrested in the United States and charged with criminal conspiracy. The two later pleaded guilty and Neteller was forced to close its U.S. services.
This focus on foreign operators even led Antigua to protest before the World Trade Organization, Mr. Lipton said.