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Non-Tech : Starnet (SNMM)Online gaming, sexsites, lottery, Sportsbook -- Ignore unavailable to you. Want to Upgrade?

To: interesting man who wrote (6633)	8/27/1999 4:32:00 PM
From: eims2000	Respond to of 8858

Starnet Communications Auditor Ernst & Young Quits (Update2) (Updates stock price.) Vancouver, Aug. 27 (Bloomberg) -- Starnet Communications International Inc., a company under investigation for alleged gambling and pornography offenses, said its independent auditor Ernst & Young quit. Neither of Ernst & Young's financial statements on Starnet in the past two years have contained adverse opinions or disclaimers, Starnet said in a U.S. Securities and Exchange Commission filing. The company operates gambling and pornography sites on the Internet. British Columbia's Coordinated Law Enforcement Unit raided Starnet's Vancouver headquarters and six of its officers' and directors' homes a week ago, seeking evidence of gambling and bookmaking offenses and evidence that it distributed child pornography and other illegal pornography over the Internet. Its shares have fallen 59 percent since then. Starnet officials couldn't be reached for comment, though Chief Executive Mark Dohlen said yesterday that he expects any criminal charges that result from the police investigation to have no material impact on Starnet's business. An Ernst & Young spokesman declined to comment. Royal Canadian Mounted Police and city police from Vancouver, West Vancouver and Delta searched Starnet's offices Friday and throughout last weekend, after an 18-month investigation. Police have said they expect charges to be filed within weeks or months. Internet Gambling Starnet shares have risen more than ninefold over the past year on optimism that millions of people around the world will gamble on its Internet sites and on the sites of other companies that license software that Starnet developed. The company has said it will sell its pornographic Internet sites. Canadian laws are unclear about gambling on the Internet, though attorneys generally believe that taking bets on the Internet could be prosecuted in Canada. Starnet has said it complies with the law by basing its gambling unit in Antigua and by refusing bets on its own gambling site from residents of Canada or the U.S., where gambling on the Internet also is restricted. Police claim evidence that important parts of Starnet's gambling operations, such as technical support, credit-card transaction processing and Web-page design, were done at Starnet's offices in Vancouver, according to a court filing that police made to obtain search warrants. Police also alleged that licensees of Starnet's gambling software took bets from Canada and the U.S. Licensees' Sites Starnet operates important functions of licensees' Internet businesses, including transaction processing and customer support, again from its offices in Vancouver, police said. Police also claimed to have downloaded sadomasochistic images, illegal in Canada, from Starnet's pornographic Web sites. They also claimed to have evidence that child pornography was distributed by Starnet. The company said Wednesday that it fired a low-level employee who had said he possessed child pornography. The company also said it has a policy ''that forbids such illegal commerce by this organization.'' Dohlen said he would welcome gambling-related charges because they could set precedents that would clarify Canadian law about online gambling. Starnet shares today rose 17/32 to 5 5/8 in late trading.