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New Action Against Ultimate Bet By Poker Players

1/17/2012 : NEW ACTION AGAINST ULTIMATEBET BY POKER PLAYERS
 
High stakes players claim that hole card scandal cost players $20 million
 
Courthouse News reports that eight US, Canadian and Peru poker players have filed a federal RICO complaint flowing from the UltimateBet  hole card scandal  citing the online poker site and ten 'John Does' and claiming that some $20 million was stolen from players, with prejudice to themselves of $2 million.
 
The players, led by Daniel Ashman, seek an injunction and damages for RICO conspiracy, conversion, and interference with prospective economic advantage, intentional infliction of emotional distress, unfair business practices, fraud and negligence.
   
They are represented by Alan Engle with Meador & Engle, of Anaheim Hills.
 
The plaintiffs also name defendants as 6356095 Canada Inc. aka Excapsa Software, claiming:
 
"UltimateBet (aka Ultimatebet.com) is an online poker and gambling website that has and continues to serve players in the United States. 6356095 Canada, Inc. (formerly Excapsa Software, Inc. or 'Excapsa') and Does 1-10 are holding companies, licensing entities, marketing companies, software firms, and individuals organized in or residing in jurisdictions throughout the world that developed software for and/or operated UltimateBet by and through which owners of Excapsa sought to direct and shield its illegal and fraudulent activities from courts, police, and tax authorities.
 
"Individual Doe defendants are owners, operators, officers, employees, and/or agents of Excapsa. While UltimateBet is not itself a legal entity, it is the vehicle through which defendants operated various conspiracies to defraud plaintiffs and the broader public.
   
"Since at least June 2003 and until at least January 2008 Excapsa/UltimateBet did conspire to and did direct, effect, and permit the theft of over $2 million held in plaintiffs' online poker accounts at UltimateBet.com.
 
“Specifically, by creating and making use of an intentional a security flaw in the UltimateBet.com software, and with the assistance of owners, agents, and employees of Excapsa and its various subsidiaries that operated UltimateBet, defendants either allowed others to or did directly view plaintiffs 'hole cards' during high-stakes poker matches run at UltimateBet.com.
   
"With the assistance of owners, operators, officers, employees, and/or agents of Excapsa and its subsidiaries, the cheaters were further able to change their online identities to avoid detection and to improperly funnel their illicit proceeds through various UltimateBet accounts in a manner that would have been impossible without insider assistance.
 
“Through these activities, defendants stole or caused to be stolen at least 20 million dollars from plaintiffs and other high-stakes poker players at games run by UltimateBet."
 
The court documents note that at present the plaintiffs are unable to identify and name certain individual 'John Does', but claim that certain people associated with the companies involved - specifically Greg Pierson, Jon Karl, Jack Bates, Russ Hamilton and others, were likely aware of the cheating or were involved in it. The documents go on to discuss evidence pointing to this.
 
The case will involve 'significant discovery' processes to find information concealed through 'numerous agents, subsidiaries, and foreign corporations' before a complete list of defendants can be identified.
   
The plaintiffs allege that UltimateBet has a "history, ownership, and business structure" that is "cloaked in layers of obscurity as a result of intentional efforts by the individuals profiting from the enterprise to avoid scrutiny.
 
"This is hardly surprising as the prospect of criminal prosecution under the Wire Act, 18 U.S.C. § 1084, the Illegal Gambling Business Act, 18 USC 1955, RICO, 18 U.S.C. § 1961, et seq., and similar statutes has haunted operators of Internet gambling sites from their inception. In 2011, a Grand Jury in the Southern District of New York returned an indictment against the current owners of UltimateBet (Scott Tom and Brent Backley) and owners of other online poker rooms for violation of these and other federal statutes.
   
"At the same time, Excapsa Services Inc. has suffered no harm, either due to the nature of its operations (often conducted through various and sundry foreign subsidiaries) or the cheating that took place while it owned and operated UltimateBet. Instead, since 2006, when it 'sold' UltimateBet (via the sale of various operating subsidiaries) to Tokwiro Enterprises in what appears to be a related-party transaction, Excapsa has been involved in liquidation proceedings in Toronto, Canada. As part of these proceedings, the assets (mainly cash from operations and from the sale) are being disbursed in an orderly manner to Excapsa's shareholders, which include individuals who knew of and participated in the high stakes poker cheating."
 
The 42-page document goes on to discuss the involvement of companies and individuals associated with the Mohawk First Nation of Kahnawake, and reviews extensively the events that unfolded during the Absolute Poker and UltimateBet cheating scandals, observing that the names of individuals involved in the cheating have never been released, other than Russ Hamilton, a former World Series of Poker Winner, early manager/employee of UltimateBet, and shareholder of Excapsa, on whom UltimateBet has sought to pin the exclusive blame.
   
"However, given the nature of the security breach (which is essentially built in to the underlying software) and UltimateBet's willingness to protect the identities of the cheaters, it is likely that the cheaters were high-level members of UltimateBet's management and/or software engineering team, and/or its founders and original programmers, as only such individuals could create and exploit the software loophole, frequently change the names of cheating accounts to avoid suspicion, and bypass security measures designed to prevent the cash out of illegitimate winnings. Statements from insiders at UltimateBet have corroborated these suspicions," the plaintiffs claim.
   
"Under federal and state law, the affected players have a right to learn the truth of who cheated them, how they were cheated, and to receive appropriate redress for their injuries, the claim concludes. "UltimateBet should not be allowed to control the investigation into its fraudulent activities and to set the terms of any penalty unilaterally."
 
The full detail on the case can be found at http://www.courthousenews.com/2012/01/17/43100.htm



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