IRS Seizes Over $4M in Piracy Case Involving Oregon “Professional Poker Player”
One of the strangest stories in recent memory to touch on the fringes of the poker world continues playing out in a federal courtroom in the US state of Oregon, where US District Judge Anna Brown has ruled in favor of an IRS (Internal Revenue Service) motion to seize over $4 million in US funds and cryptocurrency from a 28-year-old Newport, Oregon man whose lawyer described as a “professional poker player” in a statement to an Oregon news outlet. However, the seizures of the money and cryptocurrency — and a related seizure of the man’s ocean-viewing Newport home — are connected not to poker, but to a large-scale takedown of an illicit online streaming service of pirated movies, TV shows and other copyrighted content that managed to sell premium subscriptions to the pirated content for at least half a decade, generating well over $6 million in known revenue.
[Update: Several major mainstream news outlets have identified the claimant in the case as Talon V. (Van) White of Newport, Oregon. — hh]
The bizarre twist to the tale is that the 28-year-old, lawyer-described “poker pro” hasn’t been publicly identified to date, because, according to two reports on the seizures by Portland’s KOIN 6 News and koin.com, the man has yet to be arrested. That in itself is unusual, because the seizure complaint directed at the man’s $336,000 Newport home asserts two significant violations, of money laundering (18 U.S.C. § 1957) and copyright infringement (18 U.S.C. § 2319), both of which can involve significant jail time. Instead, the Oregon court filings list the monetary assets and property as the defendants targeted for seizure. This in turn forces the Oregon man to file as a “claimant” in an attempt to counter the IRS seizures, while presumably leaving the “arrest” card on the table pending further developments in the ongoing investigation.
The man’s defense attorney, Texas-based Rain Minns, who specializes in white-collar cases, told KOIN, “We don’t generally comment on a current case, but as a matter of principle the government should not grab a person’s assets and strip them of their resources unless and until proven guilty.” It was Minns who described the man as a professional poker player.
The IRS launched its seizure efforts against the man’s Newport home last November, and some documents from that case docket are available. The first defense filing on behalf of the man, as claimant of the home, serve up a variety of potential defenses. Those defenses range from the fourth (illegal search and seizure), fifth and eighth amendments to claims of lack of jurisdiction, expired statutes of limitations, defective notice, innocence regarding use of the seized property, and more.
Documents connected to the more recent court filing targeting the man’s known monetary assets have yet to be filed into national databases. What is known from the first set of docket entries is that the cases are ongoing, and the Oregon man faces upcoming deadlines to submit claimant evidence to counter the IRS seizures.
The cases involve a well-known online subscription streaming service called NoobRoom, which from archived records appears to have sprung to life early in 2013, and, over the course of several different name iterations, generated subscription fees of $9.99/month or more from hundreds of thousands of users.
Summary of the Investigation
The following is the summary of the investigation as composed by Keith Druffel, Special Agent, Internal Revenue Service-Criminal
Investigations (IRS-CI), and submitted as “Exhibit A” in the house-seizure case. The same or a similar filing has likely been introduced into the monetary-assets seizure case as well. We’re including it here because not only does it show the scope of and revenue derived from the lengthy “Noobroom” operation, it’s also damned entertaining reading:
SUMMARY OF THE INVESTIGATION
6. In October 2013, Homeland Security Investigation (hereinafter “HSI”) agents received information from PayPal regarding websites identified as www.noobroom.com and www.noobroom7.com that allowed subscribers to stream and download copyrighted movies and television shows. HSI agents contacted the MPAA regarding these websites, requesting they open an investigation to determine if the websites were authorized by member studios to offer the copyrighted content to subscribers. The MPAA assists the motion picture and television industry to protect their intellectual property rights, including copyrights. Specifically, the MPAA monitors the illegal reproduction and distribution of American motion pictures and television programs.
7. In November 2013, the MPAA provided a report of their investigation to HSI. According to the MPAA report, www.noobroom7.com and its associated websites www.noobroom5.com and www.noobroom9.com (hereinafter referred to collectively as “Noobroom”) were distributing, without authorization from the copyright holder, motion pictures and television shows that are protected by United States copyrights. The MPAA determined that many of the movies available on Noobroom were from member studios and that Noobroom was not authorized to allow the content to be downloaded or streamed. The MPAA reported that Noobroom generated revenue through the sale of subscriptions which allowed users to either stream or download copyrighted content.
8. The MPAA reported that Noobroom not only received revenue from subscription payments from users of the websites, but also received revenue from advertisements placed on its webpages by a company identified as Lanista Concepts (hereinafter “LC”). The subscription payments were being processed through Stripe. Stripe is a United States based technology company which allows both private individuals and businesses to accept payments over the internet, similar to PayPal.
9. On July 17, 2014, the MPAA sent an e-mail to [redacted]@gmail.com and [redacted]@gmail.com, two contact e-mails for Noobroom, directing them to cease and desist operating the illegal website. The content of the e-mail notified the operator of Noobroom that they were violating copyright laws and requested they take immediate steps to address the copyright infringement of MPAA Member Studios’ motion pictures and television programs. Attached to the letter was a list of motion pictures and television programs being used illicitly by Noobroom that were owned or controlled by MPAA Member Studios. Approximately five days after the MPAA sent the cease and desist letter to Noobroom, the MPAA received an e-mail to its undercover subscription at Noobroom. The e-mail was from [email protected] with the subject, “Noobroom Important Update.” The e-mail advised that user accounts had been moved to a new website, www.superchillin.com (hereinafter “Superchillin”).
10. HSI Agents were able to download movies from Superchillin and obtained IP address information while downloading those movies. With this information, they identified the company hosting the servers used by Superchillin as Hosting Services Inc. The account associated with the IP addresses was held in [Claimant]’s name and included a phone number frequently associated with [Claimant].
11. Through additional investigative efforts, two more sites linked to [Claimant] were identified — Movietv.to and Sit2play.com (hereinafter “Movietv” and “Sit2play”). In June 2016, HSI Agents attempted to login to Movietv and were redirected to Sit2play, which accepted the login information for Movietv. Sit2play appeared to be a near mirror image of Movietv in both content and appearance. In 2017, HSI Agents attempted to renew the subscription to Movietv and found the Movietv address had a notification posted that the site was moved to Sit2play. The registrant, technical, administrative, and billing contacts for Sit2play were listed as [Claimant], with company “NB” and e-mail address [redacted]@hotmail.com, an email the investigation determined belonged to [Claimant].
12. HSI Agents downloaded content from Superchillin, Movietv, and Sit2play throughout 2016 up to the present. The MPAA reported that the subject websites listed above were distributing, without authorization from the copyright holder, motion pictures and television shows that are protected by U.S. Copyrights. The MPAA determined that many of the movies available on the subject websites were from member studios and that the subject websites were not authorized to allow the content to be downloaded or streamed. The MPAA reported that the subject websites generated revenue through the sale of subscriptions which allowed users to either stream or download copyrighted content. Also, the MPAA advised that the content downloaded by HSI contained copyrighted material and the MPAA provided certification as such.
13. Based on financial records obtained during the investigation, I determined that [Claimant] received substantial revenue from the above-listed websites. In 2018, he was averaging over $500,000 per month. In 2017, [Claimant] received over $2.2 million. In 2016, [Claimant] received over $1 million in revenue, and in 2014 and 2015, [Claimant] received on average about $400,000 a year in revenue.
Stripes, Wells Fargo, and Crypto
Illicitly-profitable market opportunity or not, the above (if accurate) hardly depicts a criminal mastermind at work. Also worth a chuckle are some of the entries related to how the Oregon man moved funds from the operation’s accounts into other holdings. The monetary-assets IRS case in which the most recent court hearings occurred, the filings detail four separate Wells Fargo accounts owned by the Oregon man into which funds have been traced, along with holdings in Bitcoin, Ethereum, and other cryptos.
Another entry from IRS Agent Druffel’s submitted statement details how the Newport man paid for his house:
The subscription fees, which represent the proceeds of the copyright infringement, were processed through PayPal and Stripe accounts associated with [Claimant] and then deposited into various bank accounts controlled by [Claimant]. One particular bank account, a Wells Fargo account ending in 5111, received over $1,400,000.00 in proceeds. [Claimant] then wired $333,455.27 from the Wells Fargo account to Western Title & Escrow to complete the purchase….
Again, excerpts such as the above (if confirmed) paint dim prospects for the man as the two forfeiture cases move forward, even as the question of why no arrest remains. It’s also unclear as to why the MPAA has not filed its own civil case against the Oregon man and any others the investigation showed to be involved.
The Poker Connections
Like KOIN, Flushdraw is aware of the Oregon man’s identity and is choosing not to publish it at this time, pending arrest (the first KOIN feature quipped in its sub-head, “… man not yet charged with crime”), conclusion of the court-ordered-seizure battles, or other developments.
Regarding the claims that the Oregon man is a poker professional, well… maybe. The man does have a couple of five-digit tourney scores, including a final-two-tables cash in a smaller WSOP event, but his tourney results do not fit a “pro” tourney player’s profile. He may also be a regular grinder in cash games in Oregon’s tribal casinos, or on grey-market, Oregon-accepting offshore sites, but again, that’s also an open question. This could well be the latest in poker’s long, sad series of supposed pro players funding that career through illegal means.
Flushdraw will offer updates on this interesting tale as events warrant.