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#1229317 - 08/07/09 04:07 PM Internet Gambling Debit Card Transactions
ShannonC Offline
100 Club
Joined: Sep 2002
Posts: 123
I know that there is still some confusion about Reg. GG and the legality of the law. But I have an Internet Gambling question that does NOT include a business, but an individual.

Are we required to do something with individuals that was know are participating in internet gambling (and using their debit card)? Is it up to us to determine what is "illegal internet gambling"? The definition seems somewhat vague to me. Evidently the internet casino has found a way around the credit card code for internet gambling, because we are getting them with the usual debit card code.

Any thoughts?

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Operations Compliance
#1229339 - 08/07/09 04:18 PM Re: Internet Gambling Debit Card Transactions ShannonC
Kelsey D Offline
Platinum Poster
Joined: Aug 2006
Posts: 516
I had the same situation recently and struggled with determining whether or not my customer (an individual) was doing anything illegal that warranted a SAR. I asked my FRB examiner and actually got a reponse in writing. He said, "Your interpretation of Regulation GG is correct in that it focus on commercial accounts and not the consumer. Unless there is other activity that is suspicious in nature (i.e., structuring), then a SAR would not generally need to be filed."
Don't make me say, "I told you so!" Sincerely, your friendly Compliance Officer.

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#1229340 - 08/07/09 04:18 PM Re: Internet Gambling Debit Card Transactions ShannonC
ktac MITCH Offline
Diamond Poster
ktac MITCH
Joined: May 2005
Posts: 1,813
Giant side of TX
If you become aware of a customer participating in illegal activity, you should file a SAR
& the DOJ says this is illegal, so it is no different than if you become aware a customer is laundering money, or avoiding taxes, etc.
See Ken - Pegasus' post 1228001 Here
My opinions are just that, and might be worth what you paid for them.

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#1235184 - 08/19/09 04:24 PM Re: Internet Gambling Debit Card Transactions ktac MITCH
E. Lavenza Offline
100 Club
Joined: Apr 2004
Posts: 111
How is the customer to know if the gambling web site they are using is illegal or not?

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#1236661 - 08/21/09 11:11 AM Re: Internet Gambling Debit Card Transactions E. Lavenza
Elwood P. Dowd Offline
10K Club
Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
Your issue is whether the activity is suspicious, not whether the customer knows or does not know it is illegal. (He knows.)

The water surrounding whether the customer is actually breaking the law is pretty murky for everyone other than the DOJ. (In recently grabbing $34 million in gambling proceeds in consumer accounts DOJ indicates its vision is crystal clear.) However, it should be readily apparent to anyone that it is illegal for the casino or the remitter.

In a recent DOJ indictment of an individual who handled Internet gambling remittances they noted that he had provided false information about the nature of the businesses whose accounts he used to provide other types of payments. Accordingly, they also charged him with bank fraud. I assume manipulation of the card codes would be treated the same way.

If a SAR trigger is pulled, the conservative position is that your "suspect" is the casino or remitter, not the customer. (You customer will get honorable mention in the SAR narrative.) Your communication with the customer might be to the effect that you will not accept his relationship with this company or others in the same business.

Reg GG is not a factor in this answer.
In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.

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