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Internet Gambling: Utah Payment Processor Gets Indicted |
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Written by Thomas Jensen
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Friday, 11 May 2007
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 A federal grand jury in Salt Lake City unsealed a 34 count indictment charging seven individuals and four companies based in Utah with conspiring to violate laws prohibiting financial institutions from processing internet gambling transactions.
The defendants operated businesses based in the state of Utah that disguise credit card charges. All credit card transactions have codes associated with the transaction to identify what type of business the merchant is conducting. The defendants were coding the transactions using the 6000 series which is designated as the series used by general ecommerce funding merchants. The transactions should have been coded using the 7995 code, which is designated for internet gambling merchants.
The indictment alleges that the defendants facilitated the payment of more than $150 million in internet gambling transactions.
Charged in the indictment are Baron Lombardo, 46, of Las Vegas; Richard Carson-Selman, 51, of Las Vegas; Henry G. Bankey, 49, of Las Vegas; Francisco Lombardo a.k.a. Frank Lombardo, 52, of Las Vegas; Count C. Lombardo, 43, of Las Vegas; Tina I. Hill, 32, of Sandy, Utah and Las Vegas; Kimberlie Lombardo a.k.a. Kittie Lombardo, 43, of Las Vegas; CurrenC, Ltd., also known as CurrenC WorldWide, LTD., of Road Town, Tortola, British Virgin Islands; Gateway Technologies, LLC., of Draper, Utah; Hill Financial Services, Inc., of Draper, Utah, and Las Vegas.
IRS Special Agent in Charge Wes Eddy said, "Regardless of how the money changes hands-via cash, check, wire transfers or credit cards-and regardless of where the money is stored-in a United States financial institution or an off shore bank-we will trace the funds and seize them. IRS Criminal Investigation will vigorously investigate and prosecute the owners and operators of these illegal enterprises to the fullest extent possible."
The defendants are charged with RICO conspiracy, bank fraud and money laundering. In addition to the criminal charges, the indictment also contains a forfeiture provision seeking forfeiture of $150 million as well as real estate, vehicles, and funds in numerous bank accounts.
The indictment alleges the individual defendants and three related businesses, CurrenC, LTD, also known as CurrenC Worldwide LTD; Gateway Technologies, LLC; Hill Financial Services, conspired to purposefully misclassified credit card transactions to fool banks into processing internet gambling charges; collected monies transferred from bettors in the United States via credit card transactions; and transferred the collected funds to various internet gambling web site operators. The indictment further alleges that the purpose of the defendants' business was to help gambling websites have their transactions approved by Visa and MasterCard issuing banks, which would not knowingly authorize Internet gambling transactions.
In order to operate their payment processing business, the indictment alleges the defendants created a website they called "the Gateway." The Gateway was an automated collector and processor of internet gambling funding transactions. The indictment alleges that the defendants caused the Gateway to misclassify the transactions to Visa and MasterCard, representing that the transactions were for something other than gambling.
The indictment further alleges that the defendants used offshore accounts to receive the proceeds of their payment processing business. The defendants then caused this money to be transferred to their client websites. For their services, the defendants collected per-transaction fees from their clients. The defendants allegedly transferred their proceeds to businesses in the United States that they owned and controlled, including Gateway Technologies and Hill Financial. According to the indictment, the defendants also used trusts, including Bablcom Domestic Non Grantor Insurance Trust, Landbaron Ultra Trust, Behnke Domestic Non Grantor Insurance Trust, Lime Light Domestic Non Grantor Insurance Trust and Red Dogg Ultra Trust, to conceal their profits from their payment processing business. The defendants then used the funds transferred to trust bank accounts to make investments and to buy real property, cars, and other personal property.
None of the defendants are in custody at this time. Richard Carson-Selman was arrested on May 10, 2007, in Las Vegas. He had an initial appearance in Las Vegas yesterday and was released on conditions under the supervision of pre-trial services. Baron Lombardo will self-surrender in Las Vegas today and will have an initial appearance. All of the defendants are scheduled to be arraigned in U.S. District Court in Salt Lake City on Wednesday, May 30, at 10 a.m. before U.S. Magistrate Judge Paul Warner.
The potential maximum penalties for the counts in the indictment include 20 years for racketeering conspiracy; 30 years for bank fraud; two years for transmission of wagers/wagering information; and 20 years for money laundering.
Defendants charged in indictments are presumed innocent unless or until proven guilty in court.
The case is being investigated by the IRS Criminal Investigation Division and is being prosecuted by Assistant U.S. Attorney D. Loren Washburn of the District of Utah and trial attorney Marty Woelfle of the Criminal Division's Organized Crime and Racketeering Section.
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Last Updated ( Friday, 11 May 2007 )
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