American investigation into illegal gambling causing global problems

An investigation by the U.S. Department of Justice into payments from online casinos to U.S. players, has created a great stir for a number of legal firms abroad. This week the German payment processing company WireCard saw its stock market collapse after details were leaked about a U.S. investigation into money laundering of the company.

Prosecutors in Munich reported that they have received complaint from the FBI, which states that Wirecard is involved in money laundering. The FBI reported that the subsidiary of Wirecard, Wirecard Bank has transferred more than 5.7 million dollar in the past year from real estate firm Blue Tool to Michael Olaf Schuett in Florida. The FBI says that the money was intended for the illegal payment of online casinos winnings to US gamblers. Despite the UIGEA forbids payments related to online casino gambling, there is no federal law that forbids online gambling except the Wire Act and the PASPA, both of which relate only to sports betting.

The payment processor said in a written statement: “In connection with criminal proceedings brought against a private person in the U.S., false statements have been spread in the market regarding the business activities of Wirecard without any evidence. Schuett has no relationship with our bank, and we deny any involvement in money laundering.” Unfortunately for the payment processor only the rumour of legal trouble in the U.S. is enough to shake the company on its foundations, because the value of Wire Card shares fell 16% in one days. At one point the shares fell even third.

In an attempt to maintain its monopoly on gambling, the U.S. is not embarrassed to violate process protections designed to prevent a rush to judgment against those who remain unaccused. Now international companies have to account to the U.S. Department of Justice to prevent destructive rumours.

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