Former online crusher Brian Hastings has confirmed that Full Tilt Poker and Ultimate Bet used dodgy payment processors.
These firms created a nest of shell companies to disguise financial transactions that were in violation of the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA).
Brian Hastings Shows the Lies Run Deep
My understanding (I read an entire book about it, but like 6 years ago) is that FTP and UB/AP frequently and knowingly used payment processors like Daniel Tzvetkoff, who created dozens of shell companies claiming to sell stuff like golf balls in order to circumvent UIGEA. (1/2)
— Brian Hastings (@brianchastings) April 5, 2020
When Brian Hastings revealed the name Daniel Tzvetkoff, he really showed that this story is more complex than a spider’s web.
Tzvetkoff’s payment processor Intabill was having legal issues with the US authorities years before Black Friday. With more than $20 million of frozen funds it was clear these problems were not going away any time soon.
After arriving in the US for a conference in April 2010, Tzvetkoff was arrested and eventually became a government informant. All in exchange for immunity from a possible 75-year prison sentence.
This was how the details of the complex web came to light so quickly and a plan was born to take down the rogue poker operators in a year’s time.
Ike Haxton and Hastings Tell it How it Is
Next Wednesday marks nine years since the online poker world fell apart. On April 15th 2011, we woke up to the news that Full Tilt Poker, Ultimate Bet and Absolute Poker were gone.
There was immediate panic, particular from the US player pool. What was happening with their funds?
This amazing Twitter thread started with a discussion about Preet Bharara’s motivation for his role in the scandal. Was he simply doing his job, or trying to make a name for himself.
Bharara, then the US Attorney for the Southern District of New York, was made out to be the real villain in this tale. He was the visible guy who went after online poker.
“@PreetBharara seems smart so I might be able to learn something from him but I can’t get past that he went out of his way to play a significant role in the fall of online poker and in punishing PokerStars so I can’t stop dismissing him on the spot. Convince me that I’m wrong?”
Another legend of the game, Ike Haxton, was quick to chime in with his thoughts. He stood firm with the opinion that the whole episode was nothing more than a shakedown by a man with career ambitions.
“When they undertook that case they didn’t know about the balance shortfalls and weren’t out to protect anyone. It was a shakedown.”
Shady Business Practices and Legal Technicalities
While many in the poker world understand the outline of what Black Friday was all about, some of the finer points are less well known.
Brian Hastings and Haxton reveal that things were not as straightforward as many think.
After Haxton was told Bharara was only doing his job the tension rose somewhat.
“His job was to prosecute bad laws in a rigged system in order to secure excessive penalties against defendants chosen for political reasons,”
Haxton continues his explanation by revealing that it is not a given that these poker sites committed any bank fraud as per the letter of the law. While it is accepted they deliberately miscoded banking transactions, this is not a crime in itself.
“The DOJ legal theory, IIRC, was that this lying exposed the banks to legal risk under the UIGEA. So the fraud relies on the fact that the poker is criminal.”
If this is true, then it means that the entire Black Friday episode was nothing more than the Department of Justice abusing their position that they cannot be opposed. Even if the poker providers were acting against the spirit of what the law intended.
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