Daward Lee Falls, the CEO of bankrupt payment-processor Electracash, was charged yesterday in Maryland U.S. District Court with money laundering in connection with illegal gambling. The development is the latest in a long-running Maryland-based investigation into illegal money transfers of Internet gambling proceeds, which has been conducted in coordination with a New York-based probe that has led to convictions of people involved with the gaming websites Full Tilt Poker and Poker Stars.
Falls, who goes by D. Lee Falls, was charged via criminal information, which usually anticipates a guilty plea. The information states that Falls "did transport, transmit, and transfer funds, that is $600,000, from a place outside the United States, that is Geneva, Switzerland, to a place in the United States, that is an Electracash Inc. account at Bank of America in California, and then to Maryland and elsewhere, with the intent to promote the carrying on of specified unlawful activity, that is conducting an illegal gambling business." Maryland U.S. Attorney Rod Rosenstein declined a request to comment.
Falls' name has come up before in City Paper's extensive coverage of the Maryland probe into gambling-proceeds payment processors: in 2009, in connection with e-mail seizures arising in the prosecution of Edward Courdy and Michael Garone, and in 2011, when related prosecutions of James Davitt, Martin Loftus, and Kenneth Wienski resulted in Davitt entering a cooperation plea agreement. In 2012, the investigation prompted a sports-betting indictment against Bodog, its billionaire founder Calvin Ayre, and others connected with the online gambling company.
Falls has a long history in the financial industry, dating back to at least the early 1980s, when the New York Times reported that he was a Bank of America vice president who testified before the U.S. Congress about proposed banking reforms. He is currently a defendant in a California bankruptcy proceeding in which he and other Electracash principals are accused of placing the company's assets into another payment-processing firm they control, Willow Systems, in order to escape liability for the Electracash's debts.