Sun First Bank Logo

Salt Lake Tribune Features Explore Utah AG Links to Black Friday Processing

sunfirstbank-logoThe Salt Lake Tribune‘s lengthy series on the ties between former and present Utah Attorneys General Mark Shurtleff and John Swallow and indicted telemarketing fraudster and “Black Friday” poker-processing kingpin Jeremy Johnson resumed with a new feature yesterday, titled “When chips were down, poker firms bet on Shurtleff, Swallow.”  The feature continues digging at the back story of how online-poker processing in the period before Black Friday ended up being funneled through one of America’s most conservative and anti-gambling states, and how legal protection was sought for the operation.

The story’s deck is even more to the point: “With feds closing in, companies sought cover from Utah’s top cops.” From there it’s off to the chase, with a generally accurate story about the events leading up to Black Friday, including the collapse of a couple of earlier poker processing operations and the creation of the SunFirst Bank conduit, which ran out of St. George, Utah for about a year beginning in late 2009.

The Tribune piece also examines the cozy relationship between Utah AGs Shurtleff and Swallow, and Johnson and his various business operations, noting, as in many of its earlier features on the topic, that Johnson himself had donated roughly $200,000 to Shurtleff’s campaign coffers.

Introduced in this Tribune feature (and a shorter follow-up, published today) are four more people who were already involved with poker-processing biz before the SunFirst operation burst into life.  Three are relatively unfamiliar to casual followers of the Black Friday story — Curtis Pope, John Scott Clark and Jeff Nelson.  The fourth is rather more known, though not necessarily more important than the others in poker processing matters — Chad Elie.

Elie would later be named as one of Black Friday’s 11 individual defendants, eventually pleading guilty to reduced charges and serving five months in a California work camp earlier this year.  He’s since become by far the most visible of the Black Friday defendants within the poker community, frequently posting on Twitter as @BlackFridayChad and signing a sponsorship deal with a new online site, Attack Poker.

The Tribune story paints a familiar picture of how Elie and Nelson started up a National Bank of California account to assist in the processing, which was being done through Elie’s Viable Marketing business as part of the larger Intabill operation.  The NBC account is the one from which Elie later withdrew $4.2 million of what Intabill boss Daniel Tzvetkoff and others asserted was actually PokerStars money, while Elie instead claimed it was his.  That led to Stars filing a suit against Elie in Intabill’s name, with Stars and Elie eventually settling out of court and splitting the disputed money.  Elie then used his connections with Jeremy Johnson to help launch the Utah operation and help Stars with its US-facing processing needs.

There’s a lot more to that story that these latest Tribune reports don’t cover, including facts which can be gleaned from the recent publication of James Leighton’s UK book Alligator Blood, which is a look at many of these same operations — Intabill through Black Friday — as viewed through Tzvetkoff’s eyes.  Your loyal FlushDraw blogger has received a copy of Alligator Blood from Leighton directly, and later this week we’ll check in for an inside look at this interesting release.

What did happen, as Intabill and some other operations faded away, is that PokerStars and Full Tilt put a lot of their processing in Elie’s and Johnson’s hands.  That involved the solicitation of various legal opinions supporting the SunFirst processing operation, and an attempt to get the Utah AG office — meaning Shurtleff and Swallow, Johnson’s political friends — onboard as part of a legal bulwark against future problems.

As was first briefly mentioned in an earlier Tribune piece last winter, and as we expanded on here at FlushDraw in a five-part series back in February, that included enlisting the help of the Poker Players Alliance and its Executive Director, John Pappas.  Pappas subsequently acknowledged meeting with the Utah AG office; Shurtleff and Swallow both also attended his meeting.

Pappas also acknowledged corresponding at least five times with Johnson over generalities connected to his Utah visit, although he maintained that he was never lobbying on behalf of SunFirst specifically, but instead engaged Shurtleff and Swallow on the “federalist” appeal of allowing such processing to go on, arguing that it violated no laws.

As we noted back in February, the PPA, whether or not it was mentioning SunFirst directly, was receiving more than 90% of its funding from PokerStars and Full Tilt, the two US-facing sites who stood to reap hundreds of millions in revenue if only the SunFirst operation could be allowed to run unhindered.  And with the banking ins provided by Jeremy Johnson, it was probably a last, best hope for Isai Scheinberg at Stars, and later the Full Tilt crew as well.

But it was all doomed from the outset; the DOJ and FBI were already onto the edges of the operation, and needed only to find the proper mechanism to allow Black Friday to occur and take down the SunFirst operation.

So what happened as a result of the meetings between Pappas and the Utah AG office, and separate meetings and e-mails between Johnson and the same Utah legal brass?  Almost certainly, the hairs went up on the back of Shurtleff’s neck, and he reached out to the feds for information.

In a follow-up piece published just a couple of hours ago, the Salt Lake Tribune has published excerpts from an open chat conversation held with Shurtleff today.  According to Shurtleff: “Nobody asked me about poker processing.”

But that makes little sense.  Not only have the e-mails between Johnson and Shurtleff been published, both by the Tribune and here at FlushDraw, but this quote from later on in today’s Tribune piece can’t really be otherwise explained:

Shurtleff said he was aware federal law enforcement was investigating the issue generally, but didn’t know specifically if SunFirst was involved.

“It doesn’t matter if Swallow knew or anybody knew that processing was going on. I was aware the feds were involved,” Shurtleff said. “They were already under federal jurisdictional investigation, so there was nothing to hide, nothing to cover up. They all faced federal scrutiny.”

— “Shurtleff: Nobody asked me about poker processing”, Salt Lake Tribune

How would Shurtleff know what to ask federal investigators about if he didn’t mention poker or Jeremy Johnson to the feds?  The ongoing investigations appear to have been triggered by previous investigations and cases brought against three of those people mentioned earlier, Pope, Clark and Nelson, yet someone had to be able to tie them to Johnson and Elie and SunFirst.  Shurtleff could possibly hang his claims on the separate iWorks investigations that were ongoing against Jeremy Johnson itself, but that presumes that Shurtleff and Swallow would accept in absolute, utter innocence the introduction of Pappas to the general lobbying effort.

So, Shurtleff would have everyone believe that here came this poker guy, yet somehow he and Swallow had no clue that poker was involved.

That’s nonsensical, no matter how one looks at it.  It never added up in the first place, as we illustrated last winter, and the stink hasn’t dissipated since.  It was ludicrous of the PPA to go to bat in Utah on such a fool’s errand, attempting to lobby for anything connected to poker in one of the only two US states where all forms of gambling are illegal.

And yet, this isn’t really about PPA bashing, despite accusations that are sure to fly; that was the coin that that lobbying organization chose to accept.  What’s more clear this week is that entire chapters of the post-UIGEA poker processing story have yet to be told, and a good deal of it will emerge in the coming days.

COMMENTS

Leave a Comment

*

LATEST NEWS

filter by

Dan Katz

23rd June 2019 // Gossip, Misc, News, Poker Tournaments

Jeopardy! Destroyer James Holzhauer to Play in WSOP

The other poker players at the 2019 World Series of Poker had better hope that James Holzhauer has some catching up to...

Haley Hintze

22nd June 2019 // Industry, Legal News, Misc, News, Op-ed

Hand Histories and the Data Portability Issue

With hand histories and HUDs (heads-up displays) being a hot news topic in recent weeks, it’s time to revisit the...

Haley Hintze

22nd June 2019 // Industry, Legal News, Misc, News

California Tribes Lose in House-Banked Card Games Legal Battle

A lawsuit brought by three prominent casino-operating California tribal nations targeting certain house-banked games...

Dan Katz

22nd June 2019 // Industry, Misc, News

Electronic Arts VP Says Loot Boxes Are “Quite Ethical,” Not Gambling

The tug-of-war between video game developers and governments over loot boxes continued this week when Kerry Hopkins,...

Haley Hintze

22nd June 2019 // Industry, Legal News, Misc, News

Germany’s Lower Saxony State Bans Unnamed International Online Payment Processor

As part of Germany’s ongoing efforts to block online-gambling operators licensed elsewhere in the European Union...

Dan Katz

22nd June 2019 // Legal News, News

U.S. Reps Introduce Appropriations Amendment to Defund Wire Act Enforcement

The United States Department of Justice recently pushed back its enforcement date for its new interpretation of the...