Chad Elie Does Lengthy Diamond Flush Interview, Debunks ‘Lederer Files’ Claims
As promised, convicted online-poker payment processor Chad Elie did the first of several rumored interviews this week, doing an extending chat with DiamondFlush Poker, the audio version of which is also available at Quadjacks.
Elie, as most of our Flushdraw readers are aware, was one of eleven men indicted as part of the April, 2011 “Black Friday” crackdown against US-facing online poker sites PokerStars, Full Tilt and Absolute Poker. Elie was quickly arrested following the indictment’s filing and subsequently pled guilty in a deal with federal prosecutors that will see him begin serving a five-month vacation in Club Fed shortly after New Year’s.
Elie emerged recently, on Twitter, as part of what he’s described as a response to the many lies told by former Full Tilt exec Howard Lederer in his “Lederer Files” sitdown with PokerNews and a followup podcast interview with 2+2. And since Elie was the primary conduit between Full Tilt and PokerStars and the SunFirst Bank (Utah) processing operations orchestrated by telemarketing fraudster Jeremy Johnson, he’s in a good position to contradict specifics within Lederer’s likely lie-stuffed claims.
Which isn’t to say that Elie’s a saint, and if you take the time to read the Diamond Flush interview carefully, that’s one of of its biggest flaws — to accept what Elie is saying, hook line and sinker. Evidence and court documents your loyal blogger is still sifting through suggests that Elie has glossed over a great deal of his pre-poker processing history, and it’s a slimy business, with no saints in ready sight.
To me, Elie comes off as someone who thought he had his legal ducks in order, was enjoying a lucrative income by staying just inside the constraints of the laws, and is now out for a bit of vengeance against those who set him up for a fall and robbed him of his money. That includes Jeremy Johnson, who as we pointed out last week had many of his asset-hiding excesses exposed by Elie at a bail hearing last year, and that also includes Lederer, who Elie views as hiding his real role in Full Tilt’s operations.
Elie’s tales about Lederer’s knowledge of Full Tilt’s processing operations and looming money put ring true, even if he does tend to get a bit excessive in his claims. For instance, Elie’s very first Tweet was this:
“I never met with a payment processor”-Howard Lederer. Interesting Howard,do you not remember the MEETINGS we had?What about NYE?5hr meeting”
It turns out the meeting was more of a New Year’s Eve party involving Lederer, Elie and several others (including Ray Bitar), though the processing business and Lederer’s knowledge of Full Tilt’s problems — this nearly four months before Black Friday — was discussed at length. Lederer has clearly lied about many things, but Elie has skewed a few things too, and even more of that will emerge in the coming weeks.
Lederer and Elie apparently talked shop for several hours on this New Year’s Eve of 2010 which included at least six people at the table — Howard and Susie Lederer, Annie Duke and Joe Reitman, and Elie and his fiance, former Playboy model Destiny Davis. Here’s how Elie recalled it for DiamondFlush:
We sat there, and it was nothing but the Howard Lederer show. I mean, all he did was talk about himself and how he built a 3 billion dollar, 2 billion dollar company, and you know, I don’t even think my poor wife at the time said one word. She was just like, are we really doing this on New Year’s, are we really talking business for 2 or 3 hours or 4 hours, Chad? It was and I talked about payment processing, everything we had done about transparency and the industry and why we wouldn’t process the backlog transactions for Full Tilt, because of the risk of players not knowing the transactions were coming in. And then the problems that causes for banks – if you process a transaction that hadn’t gone in for a couple weeks, then the consumer probably doesn’t know, ie the player, and then the player is going to charge back that check and then it’s going to go to the bank. It’s not something we were willing to do. The reserves would have had to been raised and we just wanted to be a transparent clean operation.
Howard told me that he needed processors just like us, that were transparent. He said they couldn’t work with non-transparent processors anymore. I was in shock when he was being that open with me, about his other processors. It’s something that no one talked about.
That’s very specific, and it’s very damning regarding Lederer’s own “Lederer Files” claims regarding lack of knowledge of Full Tilt’s processing specifics. Of course, Lederer doesn’t want the Feds to know exactly how involved he was with Full Tilt’s business matters, or as CalvinAyre.com mentioned in an article about the Lederer and the DF/Elie interview: “Somehow, we expect plenty of people – DoJ attorneys, for instance – will be talking about this in the future. Third amended complaint, anyone?”
Quite likely, given the depth of information that continues to emerge. In the lengthy DF interview, Elie expounded him how in the early months of 2011, before Black Friday, Full Tilt (usually via Nelson Burtnick) contacted him repeatedly to try to get him to help process the growing backlog, offering ELie up to an obscene 25% to help cut down the backlog.
Elie declined because of legacy issues (meaning the high percentage of refused checks after several months without processing), or so he claimed, though it’s also possible he was starting to get cold feet about poker processing altogether. Regardless, it’s another sure sign Full Tilt was in panic mode long before Black Friday. Again, all this puts the specific lie to Lederer’s own claims.
It’s a very interesting scene. One thing we probably won’t see is Lederer responding specifically to Elie’s allegations. From a legal standpoint, it perhaps wasn’t even that wise of Lederer to do the two interviews that he did, and it’s a safe bet his lawyers will lock him deep inside the Aria’s “Ivey Room” broom closet before we see Lederer speak publicly again.