Following up on a few other blogs I did in reference to all of the failing banks this past year. Major financial institutions that have been heavy in the high risk processing market have also come under fire. There has been many fines and investigations by government agencies around the globe. I wrote two detailed blogs about the Bank of Israel investigating Cal Bank for knowingly processing gambling sites and fringe adult sites. Another major financial institution was fined this month after an investigation by the US government through the UIGEA (Unlawful Internet Gambling Enforcement Act) regulations. Optimal Group Inc. is not the first to get caught in this regulatory web the US congress has wived and they probably won?t be the last.
Each week, it seems like there?s a new piece of news finding the United States penalizing financial companies for offering their services to the online gambling industry, or seizing account money associated with Internet poker or casinos.
This time, it?s a major Canadian online services processor that?s the victim of the United States government?s rabid anti-gambling bias. Canada-based Optimal Group Inc has agreed to pay $19.2 million ?in criminal proceeds from processing payments for illegal Internet gambling websites between 2004 and 2006?, according to Reuters news service.
In the story, Optimal was quoted as acknowledging that it had done business with companies that had violated U.S. criminal law.
"Optimal, operating an electronic wallet called Firepay, processed more than $2 billion worth of illegal gambling transactions for United States customers," stated the office of the U.S. Attorney in New York, per the Reuters article.
The issue this creates for the adult sector is that a lot of the same processors and banks that are getting caught up in the mess are also in the adult high risk sector. What fall out will this cause to adult merchants with accounts that are with these sponsor banks or processors? In many cases adult merchants do not even know who their sponsor bank is. If you are in the adult space doing business using a merchant account you owe it to yourself and your organization to do your due diligence.
If you have any questions please contact me. This is a time when we all need to be aware of who handles our money. It is too hard to earn it and we need to make sure we protect it.
Regards,
Keith Reilly
[email protected]
O.800.439.1974 ext.122