BUSINESS

Hellinger pleads guilty to processing gambling money; 2+2 wins trademark suit

TAGs: Department of Justice, Donald Hellinger, Mason Malmuth, Russell Aaron "Dutch" Boyd

hellinger-guilty-online-gambling-processingMagazine publisher Donald Hellinger pled guilty last week in US District Court for the Eastern District of Pennsylvania to processing $44m worth of payments on behalf of US-facing international online gambling operators. Hellinger – along with twin brother Ronald, Michael Weisberg, Randy Trost, Jami Pearlman and Michele Quigley – was indicted last year on charges of conspiracy, money laundering, operating an illegal gambling business and transmission of wagers and wagering information. All told, the charges carried a possible sentence of 91 years in jail and a fine of $4.25m. Despite declaring a year ago that he would fight the charges, Hellinger struck a deal with prosecutors to plead guilty to operating an illegal money transmission business, for which he faces a maximum sentence of five years in jail and a $250k fine. Hellinger will be sentenced May 29.

The gambling funds were moved through Hellinger’s Payment Processing Centers LLC (PPC) between January 2005 and February 2006 on behalf of US-facing sites including Sportsbook.com and the now defunct Betonsports.com. The transactions were uncovered during an investigation into PPC’s involvement in a fraudulent telemarketing scheme that targeted senior citizens. In 2008, Wachovia Bank paid $178m to settle a class action suit over its role in facilitating PPC’s transactions.

Donald Hellinger runs magazine publisher Quadra Media, which counts Nylon and Inked among its titles. (Pearlman is CFO of Nylon.) In an email to Philly.com, Hellinger stated he “pleaded guilty to failing to register as a money service business because I was unable to get an answer from the only one capable of determining if the company needed to register.”

In other gambling/publishing news, Two Plus Two Publishing has triumphed in its trademark infringement suit against Russell ‘Dutch’ Boyd. The suit stemmed from Boyd’s 2004 purchase of the domain twoplustwopoker.com, which publisher Mason Malmuth claimed was too similar to his own twoplustwo.com, home of the popular online poker forums. Malmuth’s company filed suit against Boyd in 2009, prompting Boyd to file a counterclaim in 2010 for defamation, etc. Boyd’s suit was dismissed later that same year. On March 1, 2012, Two Plus Two Publishing was awarded $25k in statutory damages plus almost $34k in court costs. Now, good luck collecting…

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