ESI settles U.S. online gambling issue

American justice

ESI Entertainment Systems Inc., which operates Citadel Commerce, announced on Thursday that it has entered into an agreement with the United States Attorney's Office to settle charges related to online gambling.

The two entities entered into a deferred prosecution agreement that says the United States won't file criminal charges against ESI Entertainment as long as it fulfills certain obligations it made in the agreement.

One of those terms is that it will pay the United States more than $9.1 million, which is the profits earned by Citadel Commerce and represents the funds that the U.S. Attorney's Office seized in early 2007.

ESI has also agreed to fully cooperate with the U.S. authorities in all matters relating to the ongoing investigations by the U.S. Attorney's Office regarding online gambling transactions.

The company is also required to now implement procedures and controls to prevent its U.S. customers from making transactions through Citadel Commerce to online gambling merchants such as online poker sites, online casinos and sports betting sites.

ESI has hired FTI Consulting, Inc., a forensic accounting firm, to monitor its compliance with the procedures and controls set out in the agreement.

"This agreement resolves the USAO's investigation relating to the Company's former U.S. Internet gaming payment processing activities," said Tony Greening, CEO. "We believe that this settlement is in the best interests of ESI and its shareholders."

Greening also said that coming to a resolution required more than 14 months of negotiations and consumed significant amounts of ESI's capital and resources.

"Our customers, employees and shareholders have all patiently waited for this resolution and we are pleased we can now begin to refocus our efforts on building and strengthening the ESI business," Greening said.

Citadel Commerce is now focusing its efforts on enhancing and deploying its e-wallet platform, paper check payouts and Internet banking. It now supports instant payment for more than 600 million bank accounts and more than 36 countries outside the United States.

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