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Behind the Covers of Nevada v. Bryan Micon

Information continues to emerge as related to the state of Nevada’s recently filed criminal complaint against Bryan Micon, the former self-described “Chairman” of the now-defunct, Bitcoin-based SealsWithClub online poker site.

On Monday, as noted previously here at Flushdraw, the office of Nevada Attorney General Adam Laxalt filed a single felony charge of operating an unlicensed interactive gaming system — referring to SealsWithClubs — from the state of Nevada.  Micon, a long-time Las Vegas resident, was subject to a Feb 9th raid conducted by various Nevada law enforcement agents and gaming authorities.  Micon was detained at the scene for several hours but was not arrested; however, state agents confiscated virtually all of Micon’s electronic devices.

seals_logoLast week’s single felony charge against Micon appears to the be the result of evidence seized during that raid.  The illegal gaming system charge carries a maximum penalty of ten years in prison and a $50,000 fine, though Micon, his wife and daughter relocated to Antigua shortly after the raid, with Micon protesting the violent nature of the search and seizure at his Vegas apartment in February.

Whether or not Micon returns to the US to face the Nevada charge remains to be seen.  Micon has retained the prominent Las Vegas law firm of Chesnoff & Schonfeld to defend him, and has also started a GoFundMe online-donation account to, as Micon states, defray expected legal expenses in the case.  Micon is believed to have a “virtual” fortune in Bitcoins after acquiring what has been alleged to be several thousand BTC in the psuedo-currency’s earliest days, when they literally sold for pennies, which would be worth millions today.  However, he may not have ready access to large amounts of US currency necessary to fund a serious defense.

The case itself has seen several intriguing developments.  Specifics of the case have dribbled out via a handful of sources, including an unusual press conference held by Nevada AG Adam Laxalt himself, along with information gleaned from court documents obtained by local (Nevada-based) news outlets; state-level case documents are not always available on the Internet.

The investigation into the original SealsWithClubs, as described by Laxalt’s office, began in March 2014, following a complaint received about the site from a Belgium-based online player.  (Technically, it could also have been a rival BTC-friendly operator posing as a player, attempting to create legal difficulties for SealsWith Clubs and Micon within the uncertain US legal constructs for online poker.)  In any event, that led in turn to Nevada gaming officials investigating Micon’s prominent involvement as SealsWithClubs front man, though whether they also have evidence regarding Micon’s alleged operation of the SealsWithClubs site remains to be seen.

More openly, of course, Micon has declared himself to be the primary operator of the new SWCPoker, the Bitcoin-based site which emerged under Micon’s direction within weeks of SealsWithClubs being taken offline.  The new SWCPoker site is believed to be housed in Antigua, along with Micon and his family.

Also this week, reports emerged that Micon had made an attempt at some point, likely a year or two ago, to buy the floundering, now-defunct Lock Poker operation from its CEO and primary owner, Jennifer Larson.  Several outlets have now excerpted a Skype transcript between Micon and Larson.  According to the excerpt, Micon approached Larson as follows: “Hi Jennifer, I’m interested in buying the Lock Poker brand and all its software assets. You can give me a quick google and see that I started SealsWithClubs.eu in 2011 and amassed a considerable wealth with the increase in Bitcoin price. I plan to relaunch the brand and make all players whole. I consider Lock Poker like Chrysler of the early 90’s. It’s a strong brand that needs a turn-around.”

The statement “… I started SealsWithClubs.eu in 2011…” is likely to work against Micon to at least some extent in his possible court battle, assuming its authenticity can be proven, and if Nevada prosecutors can also prove the site was operated from Nevada and served Nevada residents.  Lock Poker, of course, has defrauded its former players of many millions of dollars, before it closed for good in recent weeks, and to date Larson has never been formally threatened with prosecution in any jurisdition.  Micon faces no such claims of player fraud.

Rumors have also surfaced this week regarding how politically motivated the prosecution against Micon and SealsWithClubs may be.  Prosecutors’ offices issue press releases about new indictments, pending plea deals and ongoing cases all the time, but it’s relatively unusual for a prosecutor’s office to call a special press conference to announce a single charge, particular one with a 10-year, $50,000-fine maximum, which is only mid-level in felonious terms.

Laxalt himself appeared at the Tuesday press conference, “Attorney General Laxalt and Gaming Regulatory Authorities Announce Press Conference on Unlawful Internet Gaming Prosecution,” along with Nevada State Gaming Commission officials.

According to the accompanying written presser, As noted, the Micon investigation and prosecution sets an important precedent. Gaming regulatory authorities believe it to be the first state-level Internet gaming prosecution in Nevada’s history. It also marks the first instance of state-level criminal prosecution in Nevada of an illegal Internet poker site using Bitcoin as currency.

Such releases also typically include prosecutorial bombast.  This one was no exception.  Said Laxalt, “Defending Nevada’s worldwide reputation as the ‘Gold Standard of Gaming Integrity’ is a paramount concern to the tens of thousands of Nevadans employed by the industry and the 41 million tourists who visit the state each year.  Operating or otherwise conducting gaming in the state without a license is illegal, and this office will aggressively pursue individuals and companies who seek to circumvent gaming regulations.”

Similar aggressive wording came from Nevada State Gaming Control Board Chairman A.G. Burnett.  “The Nevada Gaming Control Board is pleased to work with the Office of the Attorney General to stop unlicensed gaming activities,” stated Burnett.  “Operating an interactive gaming website without a gaming license runs afoul of Nevada gaming law. The Board will continue to investigate those who do so, and will continue to turn over such cases to the attorney general for criminal prosecution.”

There’s no doubt that all of Nevada’s well-established gaming industry would like to see Bitcoin-based online startups such as SealsWithClubs quashed, for many reasons.  One of the rumors forwarded to Flushdraw this week takes a different tack, however: The prosecution’s unusually high profile, so the rumor goes, was created as a favor to LV Sands CEO Sheldon Adelson as possible grist for his anti-online gambling crusade.

That Adelson enjoys a warm relationship with Laxalt and his office is at least possible.  Political-donation records show that Las Vegas Sands was the second largest of all political donors to the Republican Attorney Generals Association.

LV Sands, which Adelson controls, gave $1.5 million to the group in 2014, much of that earmarked for Laxalt’s own tight campaign battle in Nevada against Ross Miller.  Laxalt came from well behind last fall to stage a major upset, buoyed by millions in campaign donations from Adelson and other nationally-known GOP sources, in what became one of the nation’s most bitter, fierce campaign battles.

For the 34-year-old Laxalt, who’s never before held public office, the win was heady stuff indeed, a triumph of name recognition and a touch of family scandal over youth and his obvious inexperience in public office.  Laxalt is the grandson of former Nevada Gov. and Sen. Paul Laxalt, and is also the illegitimate son of former Sen. Pete Dominici, the result of an affair with a former Reagan staffer that was kept secret for three decades.

Despite Laxalt’s obvious gratitude for Adelson’s megabucks, the thought that the prosecution of Mimcon is being done to please Adelson still remains a stretch.  As stated, all of the state’s major gaming-industry powers would be opposed to SealsWithClubs-style operations, even if Adelson himself was nearby to the press conference.  Nearby, but perhaps precoccupied: Adelson himself has been busy himself in recent days, appearing in a Las Vegas court in a major case brought by former Sands exec Steven Jacobs over Jacobs’ allegedly wrongful termination.

Adelson’s bizarre and combative testimony in the case last week includes several virtual admissions by Adelson himself that he believes he’s above the law and can simply buy whatever politicians and judges he desires, as he’s amply demonstrated with his nearly quarter billion dollars of political spending over the past decade.  The weird, illogical nature of this week’s testimony, however (more samples here and here), veer clearly, in this writer’s opinion, into megalomaniac territory.

The more that cold light is shone onto Adelson’s own unseemly business practices, the less likely that the many politicians in subservience to Adelson’s money will continue to do his bidding.  So, at least, there’s that — but the alleged link to the Micon / SealsWithClubs prosecution seems showy and tenuous at best.

Gaming politics and the prosecutions occasionally associated with it can be strange stuff.  No further proof of that needs to be seen than this week’s unusual launching of the case against Bryan Micon, and even more newsy entertainment is likely to emerge in the coming weeks.

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