Chad Elie Slams Howard Lederer, Poker Lawyers in Twitter Appearance

Chad Elie Slams Howard Lederer, Poker Lawyers in Twitter Appearance

Once in a while a newsworthy tale emerges from thin air, as has happened in the past 48 hours when Black Friday defendant Chad Elie, set to report to federal prison in early January, appeared without advance fanfare on Twitter and began blasting away at Howard Lederer, Sen. Harry Reid, and a handful of prominent poker lawyers and the opinions they offered regarding the post-UIGEA legality of online poker in the US.

Elie’s published about five different opinion pieces crafted by prominent gaming attorneys, and has also released a handful of personal photos showing himself hob-nobbing with the bigwigs.  In the first handful of photos Elie has published on his @BlackFridayChad Twitter account, he can be seen rubbing shoulders and sharing idle conversation with everyone from Reid and Lederer to the PPA’s head, John Pappas, and telemarketing fraudster Jeremy Johnson.

Johnson’s role in the SunFirst banking debacle has gone largely unreported to date, with the Department of Justice indictment targeting Elie and ten other individuals with criminal charges, and several others and the three prominent US-facing companies involved — PokerStars, Full Tilt and Absolute Poker — with massive civil forfeitures.

Elie is one of the eight criminally charged Black Friday defendants to have been brought before US justice to date, with only Stars execs Isai Scheinberg and Paul Tate and on-the-run Absolute Poker founder Scott Tom, now on the lam in Antigua, still outside the United States’ jurisdictional reach.

Elie accepted a five-month prison term in exchange for a guilty plea, not on any UIGEA violations, but instead on bank-fraud and IGBA (Internet Gambling Business Act) concerns.  Elie’s sentence was one of the mildest of any issued to the Black Friday defendants, reflecting both Elie’s lessened importance compared to the presidents of the online sites, and an odd collision between competing investigations that makes the DOJ’s Black Friday court documents even more of a curious and incomplete beast.

A bit of Elie’s background is worth recounting.  He was an entrenched participant in the online-payments industry in the mid-2000’s running an online payment security firm called Viable Marketing Corporation from his Tampa-area home.  He was also peripherally tied to the Intabill payment-processing team, and had some connections with PokerStars (and perhaps other sites) that remained intact as the Daniel Tzvetkoff-led Intabill, an Australian company, collapsed in a cloud of fraud and missing millions, after Tzvetkoff himself was nabbed at a Las Vegas symposium.

Speaking of those online-marketing symposiums which are often held in Las Vegas, Elie attended one in 2009, where he was introduced by mutual friends to Jeremy Johnson, who at that moment in time was recognized as a telelmarketing giant.  Elie had a major client in PokerStars and was searching for banks to help with processing, and Johnson had a secret connection at a bank, the doomed SunFirst Bank in St. George, Utah, at the heart of most of the Black Friday allegations.

The two grew serious about business possibilities in 2009, and in October of that year, started a company together called Elite Debit, with two businessmen closely linked to Johnson, Jason and Toodd Vowell, serving as the company’s managers and other Johnson associates in supporting roles.  Elie supplied PokerStars as a client, with Full Tilt coming on board in 2010.  Johnson and his friends supplied the bank, and the two sides were to split the profit 50/50.

That didn’t quite happen.  Johnson and his cohorts ran off with most of the $46.5 million the payment-processing operation produced in profits before Black Friday.  Elie was left holding the bag in late 2010 when the depth of Johnson’s fraud became clear, but his civil lawsuit against Johnson, the Vowells and others ran right into a Federal Trade Commission (FTC) investigation against Johnson’s group, with the FTC seeking $275 million in fines for years of telemarketing fraud.

Elie was forced to abandon his lawsuit, and a few months later Elie found himself charged himself in the Black Friday roundup.

Stars and Tilt — and Elie — picked a loser for the ages when they hooked up with Johnson.  Not that they or Elie knew how sordid Jeremy Johnson’s vaunted IWorks operation was, since Johnson himself spent many hours himself partying with his good buddy Mark Shurtleff, who just happened to be Utah’s Attorney General.

Here’s Shurtleff and Jeremy Johnson about to enjoy a ride aboard one of Johnson’s four baby helicopters:

 

There is tons of breaking news regarding the Jeremy Johnson connections to SunFirst and Black Friday, much of which has been obtained in recent days by this author, but for this post let’s stay on topic, with Elie’s reemergence.

Elie forged ahead with his deal with Johnson and SunFirst, buttressed by the opinions he received that poker-only processing remained legal after the UIGEA.  What no one knew is how soon it would all fall apart, doomed to a crackdown for reasons that on the one hand are easy to see and on the other might hint at massive government and corporate corruption. A ton of smoke still billows from the Black Friday ashes, and we’ll be poking at the embers in some future posts.

The most curious point of all: Jeremy Johnson and his immediate cohorts remained uncharged in the Black Friday crackdown, largely because of a territorial conflict between the DOJ and the FTC.  But John Campos, the banker in the SunFirst scheme?  The exact crime he pled guilty to was accepting a bribe, of $20,000.  Jeremy Johnson gave Campos that money.

When Elie was subpoenaed to appear at a 2011 detention/bail hearing for Johnson, he was asked why he had been charged, while Johnson had not.  Said Elie, “I wish I knew.  I don’t know.  Sorry.”

Elie is set to report to prison on January 3rd, or as he put it in a DM to this blogger, going “on hiatus” for a few months.  In the meantime, he’s not being quiet.  The photos and accusations against Lederer, the money-grubbing Harry Reid and others are sure to ruffle a few feathers, and he’s already agreed to do several interviews before heading off on his enforced vacation.

It turns out the that the real story of the Black Friday crackdown wasn’t quite what we’ve been told.  In the near future, a lot of more of the real story will come out.

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