Canada's Optimal Group Inc, the company behind former payment processor FirePay, has entered into a non-prosecution agreement with the United States Department of Justice over payments which it processed on behalf of online gambling operators in the U.S., agreeing to forfeit approximately $19.2 million in criminal proceeds under the terms of the settlement.
Brought by Preet Bharara, the United States Attorney for the Southern District of New York, and Joseph M Demarest Jr, Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation, Optimal Group accepted a Statement of Facts regarding its business activities prior to the enactment of the Unlawful Internet Gambling Enforcement Act on October 13th 2006.
In the statement, Optimal Group confirmed that from 2004 until October 2006, the company operated an electronic wallet called Firepay, processing more than $2 billion worth of illegal gambling transactions for U.S customers.
According to the Statement of Facts, the Internet gambling websites were located outside of the U.S but the substantial majority of their customers were however based in the country, including in the Southern District of New York.
As acknowledged by Optimal, these Internet gambling merchants violated federal criminal law by offering gambling in the U.S, including 18 U.S.C. § 1084 (the Wire Act) and 18 U.S.C. § 1955 (the Illegal Gambling Business Act).
Optimal had previously announced in May 2007 that it had initiated discussions with the U.S. Attorney’s Office and was in the process of responding to a voluntary request for information issued by that office.
The company subsequently received a copy of warrants of seizure against funds that were on deposit with two U.S. banks, which included $19.2 million on deposit to the credit of the company's affiliates.
Optimal and the U.S. Attorney’s Office have agreed that the $19.2 million previously seized, which is presented as restricted cash on the company’s consolidated balance sheets, shall be applied to satisfy the forfeiture obligation.
The agreement also provides that the DoJ will not criminally prosecute Optimal Group or any of its subsidiaries for any crimes related to the former processing of Internet gambling transactions originating from customers in the United States through and including 2006.
Optimal has since disposed of substantially all of its payment processing business and is today principally a toy and consumer electronics company.