Daniel Tzvetkoff

Who Informed on Online Poker Informer Daniel Tzvetkoff?

The Australian wunderkind of post-UIGEA online-poker payment processing, Daniel Tzvetkoff, faces sentencing this month in a New York federal court for his role in helping offshore sites process deposits and withdrawals for US-based players.

Tzvetkoff and his Intabill processing firm quickly rose to the top of the processing pyramid in 2008, only to collapse in spectacular fashion a year later, leaving an $80 million hole in the global poker economy. Things went downhill quickly for Tzvetkoff.

According to the DOJ, Chad Elie's processing relationship with Intabil's Danie; Tzvetkoff (pictured) dates back to early 2008.

After losing his business to former associate Curtis Pope, Tzvetkoff sought a point of reentry into the e-commerce world.  It was in that pursuit that Tzvetkoff headed to a Las Vegas business symposium in April of 2010, where he was recognized and arrested by US federal authorities.

After being bused to New York, Tzvetkoff subsequently spent over four months in prison before deciding that becoming a cooperating witness was a better alternative than facing up to 75 years in prison.  By that point, federal investigators were already in possession of more than 90,000 documents that thoroughly incriminated Tzvetkoff and many others in a widespread manipulation of US banking protocols that allowed immediate financial transaction processing between US players and offshore sites.

Tzvetkoff was arrested only a few months after a highly publicized lawsuit was filed against him and Intabill by Full Tilt, which lost at least $40 million when the company went under.  And when Tzvetkoff’s arrest became public news, the widespread belief in poker circles was that it had to have been someone at Full Tilt that dropped the dime on him — perhaps Howard Lederer or another of the FTP owner-players that lived in Vegas, where Tzvetkoff was arrested.

The problem is, that theory never made sense.

First, dealing with shady processors had, unfortunately, become an accepted part of the US-facing online poker industry in the years following the passage of the UIGEA.  Second, despite Intabill’s failure being a deep hit, turning in Tzvetkoff would have meant a high risk of Tzvetkoff doing exactly what he did — becoming a cooperating witness.

The only way to understand Tzvetkoff’s arrest is if he had been turned in by someone else, someone who was already in trouble with the US feds.  By the time Tzvetkoff was arrested in 2010, several other payment processors had already run into similar legal trouble.

It’s time for a trip into UK writer James Leighton’s book about Tzvetkoff’s rise and fall, Alligator Blood, wherein Tzvetkoff, now in US custody, is visited by his fiancee, Nicole.  Here’s how the book recreates the conversation, starting with Nicole speaking:

“I don’t have much time, but we think we have an idea of how the FBI knew about you,” Nicole started.

“Full Tilt Poker?” Daniel answered, suddenly snapping back into reality, knowing full well that Ray Bitar has effectively issued a fatwa against him.

Nicole shook her head.  “No.  We don’t think it was Full Tilt.”

“Then who?” Daniel prodded, clearly confused.

“We’ve done some research,” she continued.  “Did you know John Scott Clark, Andrew Thornhill and Curtis Pope were all arrested by the FBI last year and charged by the Department of Justice?”

“Last year,” in relation to Tzvetkoff’s own arrest, meant 2009.  Thornhill, who this CalvinAyre piece about the Black Friday indictments describes as Intabill’s US representative, was arrested in December of 2009, as were Pope and Clark.

All three of these US-based processors appear to have cooperated with US authorities before Tzvetkoff chose the same route.  The latest pre-sentencing filing by Tzvetkoff’s attorney, Robert Goldstein, even details what happened to each of the three:  Thornhill received a three-month sentence, Clark received only time served, and Pope eventually got 21 months… but that last was only after he encountered additional legal problems regarding the same fraudulent payday-loan operation that was wedded to Intabill’s US-targeted poker processing.

All three of them appear to have turned state’s evidence, along with another processing figure close to Pope and Clark, Jeff Nelson.  Nor was this wave the first: other processors had been nabbed before them, and Canadian processing giant Douglas Rennick was indicted in the same time frame.

It is likely that one of the three is the person who heard about Tzvetkoff being at the Las Vegas i-business symposium in 2010, though whether an active warrant existed for Tzvetkoff at the time of his arrest remains unknown. Each of the three was either based in Vegas or worked there frequently, but the odds-on fave has always been Thornhill, as first indicated by this piece from way back in 2011 at TalkLeft.com, “Poker Busts: A Trail of Cooperators.”  That piece looks at the earlier indictments of Thornhill, Pope Clark and others, and correctly notes that while Tzvetkoff’s arrest got the big headlines, he was just another domino in the chain of processors that the DOJ kncoked off while trying to oust offshore sites from the grey-area US online poker market.

It took some time for much of the paperwork in Thornhill’s case to finally be made public, and the indictment itself remains sealed to this day.  The timeline, however, fits the possible scenario: A number of documents in the case were filed collectively in June, 2010, following presumed negotiations between Thornhill and his counsel and DOJ prosecutors.

As Intabill’s one-time US representative, and being out on bail in his own case at the time of the April 2010 symposium, Thornhill might have attended (or at least heard about) the premiere of a new processing firm called Payovation at that conference.  It was Payovation that employed a number of former prominent Intabill workers behind the scenes, and also had Daniel Tzvetkoff himself as a $10,000/month, non-employee consultant.

Further, there’s no doubt that the feds were long aware of Intabill’s prominent role in US-facing poker processing.  When Thornhill informally accepted the plea deal in June of 2010, he also agreed to a set of civil forfeitures:

a. At least $96,000.00 in United States currency, in that such sum in the aggregate represents proceeds traceable to the offense;

b. A 2008 Audi S 6;

c. All right to payment by Intabill or its employees, agents, parents, subsidiaries or affiliates relating to goods or services rendered by Thornhill or his employees, representatives and affiliates.

There’s really no doubt — the details of the Intabill operation were known long before Daniel Tzvetkoff was hauled out of a casino bar by FBI agents.  It could have been Pope, or Clark, or even the shadowy Jeff Nelson, but the timeline fits best to Thornhill.

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