Facing charges from United States government prosecutors of abetting money laundering operations, the owner of a pair of payment processing companies will settle the legal dispute with a $13.3 million payoff.
U.S. prosecutors charged Ahmad Khawaja with illegal doings in working with Isle of Man-based poker website PokerStars by providing wire transfers “by individuals and entities who knew that the funds involved represented the proceeds of the illegal transmission of gambling information and the operation of an illegal gambling business.”
Khawaja ran Allied Wallet Inc. and Allied Systems Inc., electronic payment processors which remain open for business despite the hefty settlement.
Though current American gambling laws require that financial institutions stop payment between individuals and suspected operators of online gambling sites in the U.S., but the case against Khawaja would appear to be the first against a simple payment processor – the prevailing law, the Unlawful Internet Gambling Enforcement Act (UIGEA) does not provide for any law regarding such processors, so this legal action may set some legal precedent in America.
At present, the U.S. House of Representatives in on break until early September, but an early item on the docket concerns a bill by Rep. Barney Frank (D., Mass.) to completely rework UIGEA.