“Straight Flush” Chronicles the Rise and Fall of Absolute Poker

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Ben Mezrich, the author of the NY Times bestseller The Accidental Billionaire about the rocky genesis of Facebook that was later adapted into the Oscar winning movie “The Social Network” has just release a new book, his 12th book, entitled Straight Flush: The True Story of Six College Friends Who Dealt Their Way to a Billion-Dollar Online Poker Empire–and How It All Came Crashing Down.

It’s a provocative title, no doubt, and the “true story” to which it refers is the rise and fall of Absolute Poker. What’s more, it was made with the full cooperation of one of AP’s founders. In fact, the book was his idea, pitched to Mezrich in an email.

In the book, Mezrich lays out how these young guys discovered that The Wire Act of the 1960s that made sports betting and other types of gambling illegal didn’t say anything about poker. It wasn’t until December of 2006, by which point these young smart alecs became the whiz kids of cyberspace with an online poker monolith serving thousands of players and dealing millions of poker hands daily, that the U.S. government enacted the Unlawful Internet Gambling Enforcement Act making sites like Absolute Poker illegal.

Sites were given time to shut down of their own accord, and on April 15, 2010, the feds finally took action against the majority of these sites, including AP, that ignored the order and remained open, seizing their accounts, freezing player funds, and shutting down their URLs.

Ben Mezrich’s latest expose’, this time on the flashbang phenomenon that was online poker in early 21st century, is in stores now.

Could Ex-Online Poker Sites Absolute and UB Pay Back Players?

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UB.comBlack Friday left many online poker players’ money stuck online. Two of the sites that stranded the some of the highest number of players out there were Absolute Poker and UB Poker.  Since April 15th it has pretty much looked like any players on these sites were pretty much out of luck when it came to getting their money back, until just this week.  It was reported that both sites will be liquidated, which not only spells the end of the sites in the online poker world, but also means that players could potentially be getting repaid soon from these sites.

Excellent news for players out there, but it unfortunately comes with a catch.  While they will be paying players back, it is only look like it will be about 20% at most of the total amount of money in each players’ account.  The statement that was released said that it would be around “15 to 20 cents on the dollar” to be exact.  These two sites were two of the more popular in the game before Black Friday, but found themselves behind the two other big named sites who were hit by the drama in Full Tilt Poker and PokerStars.

The liquidation situation with the same means that they are completely done in the online poker world, and the reason for them doing this is apparently to appease the United States Department of Justice.  Since Black Friday these sites have struggled to get any realistic type of real money poker traffic, which led to this final decision.  They have made major layouts among their staff, and while the two sites closing down doesn’t come as a complete shock, it is still an interesting bit of news.

As far as the founders behind the sites, there was also some mention of the two men involved in creating Absolute Poker.  One of the two, Brent Beckley, decided to plead guilty to a few different charges relating to their online poker site, and his plea deal will get him between one and 15 years in jail.  If Beckley had decided not to agree to this plea deal, he would be looking at a maximum of 30 years of time.  Scott Tom is the other co-founder, but no one is quite sure exactly where he is currently.

Absolute Poker Co-Founder Pleads Guilty

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Last Tuesday, December 20, 2011, the co-founder of Absolute Poker, Brent Buckley, pleaded guilty to charges of bank fraud.

Absolute Poker was one of the three poker sites, along with Poker Stars and Full Tilt Poker, that was shut down on April 15 of this year for operating illegally within the United States, where it is still against the law to play poker online.
Buckley, 31, entered his guilty plea as part of a deal that limited his prison sentence for the crime to 1 – 1 /12 years. He said he knew when he did it that it was not legal to accept credit card payments from U.S. residents for Internet gambling when he entered his plea before Magistrate Judge Ronald Ellis at the U.S. District Court in Manhattan.

The bank fraud was perpetrated by disguising the funds and tricking the banks in the U.S. into believing that the money taken in for gambling was actually going to merchants who didn’t really exist selling random merchandise like golf balls and jewelry that didn’t exist either.

Co-founder of Absolute Poker, Buckley was listed in the court paperwork as the Director of Payments for the company. His criminal activity began, Buckley stated, in Autumn 2006, which is apt since October of 2006 is when the U.S. enacted the Unlawful Internet Gambling Enforcement Act making such activities an enforceable crime.

Fortunately for the U.S. players affected by the sudden closure of Absolute Poker, prosecutors said back in May of 2006 that would allow for players to reclaim their unused funds tied up in Absolute Poker’s seized bank assets.

US Online Poker Players – File Your Claim

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The Poker Players Alliance just posted a guide to what poker players might try, to get their money back from Full-Tilt, Absolute and the other operators who won’t, or can’t, return deposits.  Although I don’t agree with everything the PPA’s say – for example, I think many U.S. courts would throw out claims by players as debts associated with gambling – they raise the important and immediate point:  If you are going to file a claim for part of the millions of dollars seized by the U.S. federal government in bank accounts around the world on April 15th, you only have until July 15, 2011.

The paper is:  “The Legal Rights of Players with Unpaid Account Balances – A PPA Information Guide” at http://www.scribd.com/doc/59876348/PPA-Players-Funds-Legal-Guide.  The PPA even included the claim form.  It’s the last two pages of the paper.

You don’t need a lawyer to file, but you should get one.  The PPA’s lawyers were worried that a player might be hit with fines if the court decides the claims are frivolous.  I’m more concerned that you have to file the claim form under oath, swearing that you have an ownership interest in an account you may not have even known existed.  Perjury is a real crime, with real penalties.  And both I and the PPA attorneys agree that the additional papers you will have to file within 21 day after filing the claim form, should be written by a lawyer.

The reason you might have the right to file a claim is that the Department of Justice decided that at least some of the bank accounts would be seized under what is known as a civil forfeiture.  Criminal cases are limited to the government and the defendants.  Civil cases involving the seizure of the poker operators’ and payment processors’ bank accounts are open to anyone who has a good faith claim on the money.

But there is a tight time limit.  The DoJ published its notice of intent to seize the online poker funds on May 16, 2011.  Claimants have only 60 days to file their verified (meaning under oath) claim with the U.S. District Court Clerk in Manhattan; that means before the end of the day on Friday, July 15, 2011.  You can file electronically.

Extensions are possible, but they would require either getting a court order or an agreement with the prosecutors.  In fact, the PokerStars companies, Absolute and Full-Tilt all were given until September 30, 2011, to file their claims.  But I doubt either the DoJ or federal Judge Leonard B. Sand would agree to give more time to a mere player.

Some claims have already been filed.  The first was by Chad Elie, who claims an ownership or possessory interest in a third of the accounts seized.  Chad is the Las Vegas defendant who married former Playmate Destiny Davis the day after he was arrested in connection with Black Friday.  He is out on $250,000 bail.

Other claims have been filed.  The second was by LST Financial, Inc., which calls itself “a full-service, third-party financial processor and service bureau.”  It is claiming an interest in five bank accounts in Texas and North Carolina seized from Four Oaks Bank and Trust.  MAS, Inc., claims money seized from Hawaii National Bank.  And, Ultra Safe Pay says it is the owner of the funds seized from Umpqua Bank in Roseburg, Oregon.

Should you file a claim?  You probably don’t have much chance of success, unless you have a communication that mentions one of the bank accounts listed in the Complaint.  They are on the pages immediately preceding the claim form in the PPA paper.  You want to find a name or number that matches an email from a payment processor or online poker operator.

Even then, there are some risks.  I don’t think the judge would punish a player if the claim failed.  But the DoJ will now have your name and identifying information.  There is no federal crime against playing poker online.  But you can be sure that if you are claiming hundreds of thousands of dollars that you will have your taxes audited.

Republished with permission © Copyright 2011, I. Nelson Rose, Prof. Rose is recognized as one of the world’s leading experts on gambling law, and is a consultant and expert witness for governments and industry.  His latest books, Internet Gaming Law (1st and 2nd editions), Blackjack and the Law and Gaming Law: Cases and Materials, are available through his website, www.GamblingAndTheLaw.com.

Absolute Poker has reached an agreement with the US DOJ

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St. John’s, Antigua and Barbuda (May 10, 2011) — Absolute Poker, including the UB (formerly Ultimate Bet) brand, hereafter “Absolute Poker”, issued the following statement today in relation to civil and criminal matters filed in federal court in Manhattan and made public on April 15, 2011:

Absolute Poker has reached an agreement with the United States Attorney’s office for the Southern District of New York (“SDNY”).  Under the agreement, the US Attorney’s Office has agreed to provide all necessary assurances that third parties may work with Absolute Poker to facilitate the return of funds, currently held by third party processors, to players located in the US. This provision is an important step to returning US player funds.

The Company has also notified the SDNY that it has closed its US-facing operations, and it has agreed to the cessation of real money poker play in the US.  As such, Absolute Poker has not requested the return of its worldwide domain names, www.AbsolutePoker.com, www.UltimateBet.com and www.UB.com, and today’s agreement does not provide for their return. The agreement also provides for the appointment of Monitor, approved by the US Attorney’s Office, to assess the Company’s compliance with the terms of the agreement.

Absolute Poker’s top priority has always been, and remains, the refund of account balances to its U.S. players.  Unfortunately, the Company still faces several legal issues which must be navigated before funds can be paid out to US players. The Company’s US attorneys, Blank Rome LLP, continue to work diligently to resolve these issues, which is a necessary further step to facilitate the return of funds to players.  Player funds, therefore, will not become immediately available for withdrawal as a result of today’s agreement with the DOJ.

A Company spokesperson said: “Today’s signing of the agreement with the DOJ is an important step towards the safe and efficient return of funds to our US players.  We can now move as expeditiously as possible to collect player monies from third party processors as a prelude to establishing proper mechanisms for the return of funds to our US players.  As previously announced, we have already taken specific actions to exit the US market by closing our US-facing operations.  Blank Rome LLP will continue to engage in discussions with the SDNY in order to complete the necessary agreements for the final transfer of frozen fund balances to our US players.  This remains our highest priority.  We will continue to update our players and the poker community, as we move forward to resolve outstanding issues.”

Absolute Poker and UB Drop Poker Pros

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Earlier today Absolute Poker and UB decided to let go of all their sponsored pros. Joe Sebok who was an outspoken front man for the company immediately posted to his blog claiming among other things “The pro’s monies are still tied up on the site as well, so on that level we are all in the same situation as the general poker public.” The poker community at large, especially those on the 2+2 poker forums, have little sympathy for Sebok who used his status with the company and the poker community to make players believe that Absolute Poker and UB were safe places to play. Below is the Press release in it’s entirety.


Absolute Poker and UB Part Ways with Poker Pros to Focus on Non-U.S. Market
St. John’s, Antigua and Barbuda (May 9, 2011) — Blanca Games Inc. (“Blanca”), operator of online poker rooms Absolute Poker and UB, issued the following statement today:

“Recently, Absolute Poker and UB ceased their U.S.-facing operations due to legal developments in the United States. To ensure the on-going viability of the business, it has been necessary to downsize certain aspects of Absolute Poker’s and UB’s operations.  These efficiency measures have been taken to enable the brands to continue to operate their non-U.S.-facing business.

“These actions are the result of the severe impact of ‘Black Friday’ on the business, and these efficiency measures have negatively affected not only the financial position of the brands, but also their staff and personnel.  Regrettably, the negative effect of ‘Black Friday’ has extended to the Company’s highest profile group of poker professionals, known as ‘Team UB’.  Consequently, Blanca’s executive management team today informed its roster of sponsored pros that, in accordance with the provisions of their agreements, their contracts have been terminated. Each of the ten Team UB pros, plus one player representing Absolute Poker, has received personal notification that their sponsorship arrangement with Blanca’s respective online poker room is now invalid.

“This was a difficult task for Blanca’s management, and we are very disappointed that we have been compelled to sever ties with our sponsored pros.  Over the years, the Company has been successful in gathering a group of young, extraordinarily talented and brand-appropriate poker professionals who have proudly sported its logos.  We are truly saddened that circumstances have dictated this course of action, and we regret that we are no longer in a position to partner with our sponsored pros, or to provide them with a source of income for playing the game that they love. We appreciate their significant time and dedication shared with us, and we thank them for the loyalty and patience they have continued to show us even during the unsettling events of the past few weeks. We respect and admire them for their many accomplishments, both at the poker tables and away from them, and we will always be grateful for their valuable contributions to building the UB and Absolute Poker brands and to creating a rock-solid community at the pair of online poker rooms.”

The full list of affected pros is as follows: Joe Sebok, Prahlad Friedman, Eric “Basebaldy” Baldwin, Maria Ho, Brandon Cantu, Tiffany Michelle, Scott Ian, “Hollywood” Dave Stann, Adam “Roothlus” Levy, Bryan Devonshire and Trishelle Cannatella.

Today’s layoff of all 11 American-based poker pros follows last week’s announcement by Blanca that its workforce had been significantly reduced. Both actions form part of a strategic restructuring of the company that will enable the business to focus its resources on consolidating its non-U.S., rest-of-the-world operation and software business. Absolute Poker and UB continue to operate their non-U.S. facing business around the world.
The company’s legal counsel continues to move forward in ongoing discussion with the U.S. Attorney’s office with the ultimate objective of reaching an agreement with the Department of Justice that would facilitate the return of funds to U.S. players.

Blanca Games Issues Statement on Raids

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UB.comST. JOHN’S, ANTIGUA and BARBUDA–(Marketwire – May 7, 2011) – Blanca Games Inc. (“Blanca”), operator of online poker rooms Absolute Poker and UB, issued the following statement today:

Blanca can confirm that Costa Rican officials visited the office of Innovative Data Solutions (“IDS”), the former customer service centre of Absolute Poker and UB in Costa Rica. The Organismo de Investigaciones Judiciales (“OIJ”) took action yesterday to further their investigation of Olman Rimola, the owner of IDS, Scott Tom, who was also recently named in the indictment list issued by the Department of Justice on April 15th, and a third lesser known party, Oldemar Vargas. The reported OIJ ‘raids’ of IDS and various associated private residential addresses were in relation to their search for Rimola, Tom and Vargas, and do not involve Blanca or the operations of Absolute Poker or UB.

Poker Sites Accepting US Players

A company spokesperson said: “We want to correct the rumors being reported in poker circles and the wider community that yesterday’s events are related to the recent Department of Justice indictments. Our understanding is that this is not the case, and that they were driven by local investigations of a separate matter in Costa Rica that involves a concerted effort to locate and apprehend Rimola, Tom and Vargas for questioning in relation to a money laundering investigation.”

Blanca has terminated its supplier contract with IDS after discovering that Rimola has misappropriated millions in IDS severance payments. The company is currently exploring all legal options available to recover the lost funds. Furthermore, Blanca is cooperating fully with the local Ministerio de Trabajo (Department of Labor Officials) in Costa Rica in order to coordinate an alternative method to remit all severance payments to IDS employees, thereby bypassing the facilities of IDS and Rimola to ensure that all obligations to former employees are fulfilled.

As stated previously, Absolute Poker and UB continue to operate their non-U.S. facing business around the world. The company is engaged in ongoing discussions with the Department of Justice and the U.S. Attorney’s office regarding an agreement that will facilitate the return of funds to U.S. players.

Raid on Pokerstars Costa Rican Offices a Mistake

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Following up on our earlier story about raids on the offices of Pokerstars, Absolute Poker and UB we have learned from our source in Costa Rica that today’s raid on the Pokerstars office was a mistake. They were apparently led to the wrong offices by a reporter who is know for sensationalistic news coverage.

Dr Pauly also confirms this from his sources on Tao of Poker. According to Pauly the police officers looked around, had some coffee and left with taking anything.

We’ve also learned that the Costa Rican authorities are chasing down 3 owners of Absolute Poker and UB. Olman Rimola, Scott Tom, and Brent Beckley have been hiding from authorities since they were named in a US DOJ indictment on April 15th.

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We’re sure there is much more going on here that we don’t know yet and will keep you posted on everything we learn including a post we came across on 2+2 that claims there was a group of investors that made an offer to take over  Absolute Poker and UB.

Absolute Poker, UB and Pokerstars Offices Raided by Police

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According to our sources in Costa Rica and several web reports from @KevMath and  @TaoPauly we’ve learned that the Costa Rican offices of Pokerstars, Absolute Poker and UB were raided earlier today by the OIJ, which is similar to the FBI in the U.S.. Police also raided several homes that are linked to the owners of Absolute Poker and UB.

Pokerstars VIP Manager Steve posted this on 2+2 a couple of hours ago,  “PokerStars continues to operate the world’s largest poker room, business as usual. It is true that the OIJ is currently at the PokerStars Costa Rican office and has sent employees home temporarily, but employees will be able to return in a few hours. PokerStars expects the office to return to business as usual in short order as this action was most likely taken as a response to problems experienced by other local companies in the same industry.” He’s of course referring to Absolute Poker and UB. Police left the Pokerstars offices shortly after arriving. Pokerstars is based on the Isle of Man and only have a small support staff in Costa Rica

Absolute Poker and UB seem to be the main focus of today’s raids of the OIJ. The Absolute Poker and UB employees went to the “Ministry of Work” fearing they wouldn’t be paid by Absolute Poker/UB COO Paul Leggett. Most of today’s action seems to have been spurned on by this and Costa Rica’s very strict labor laws.

We’ll stay on top of this story and continue to bring you the latest.

Blanca Games Inc Issues Statement on Restructuring

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Absolute Poker and UB to Focus on Non-U.S. Business
St. John’s, Antigua and Barbuda (May 5, 2011) — Blanca Games Inc. (“Blanca”), operator of online poker rooms Absolute Poker and UB, issued the following statement today:

As previously stated, Absolute Poker and UB ceased their U.S.-facing operations due to recent legal developments in the United States. The company is currently restructuring and is focusing its resources on consolidating its non-U.S., rest-of-the-world operation and software business. In order to have a more efficient and successful future business, an immediate need to downsize and streamline operations significantly at both online poker rooms has been required.  Absolute Poker and UB continue to operate their non-U.S.-facing business.

This decision comes after considerable review and analysis of the impact that ‘Black Friday’ has had on the business as a whole. The workforce has been liquidated, and the process of rehiring approximately 20% of staff in key positions has commenced. All affected employees have been informed of this necessary restructure.

A company spokesperson said: ”We regret that we have been compelled to take these actions.  We have worked tirelessly to create a truly amazing company that is filled with extraordinary people. We have always been and still remain fully committed to our employees and players. At the same time, we are confident that this restructuring will strengthen the company and its future.”

The Company spokesperson also addressed erroneous reports that Blanca has filed for bankruptcy. The apparent confusion over this issue stems from the fact that Blanca recently informed a debt holder, Madeira Fjord, that it was terminating debt payments to, and its relationship with them.  As a result, Madeira Fjord apparently filed a notice of bankruptcy in Norway. This notice has no negative impact upon Blanca, the operating company, or its brands.  As stated previously, Absolute Poker and UB continue to operate their non-U.S. facing business around the world.

For non-U.S. players, Absolute Poker and UB have increased their maximum withdrawal limits to $1000 for Visa withdrawals and $500 for all other methods.  The number of transactions being processed per day has been significantly increased as well.  Players are still restricted to one transaction per week, but we are working to return non-U.S. withdrawals to normal service levels as quickly as possible.

As confirmed earlier this week, the company’s legal counsel is in continuing discussions this week with the U.S. Attorney’s office to formalize an agreement that would facilitate the return of funds to U.S. players.