Haley's Poker Blog

No bad beats, but still a poker blog... hence the anguish.

Monday, June 18, 2012

Just Conjecturin', Volume 44: The Dirty Birds

"You seem to be in some distress," said the kindly judge to the witness. "Is anything the matter?"

"Well, your Honor," said the witness, "I swore to tell the truth, the whole truth and nothing but the truth, but every time I try, some lawyer objects." -- classic lawyer joke

I love me some lawyer jokes, as do most sane people, even as I know that most funny jokes have roots in reality. This time out the topic is lawyers, and the only way to deal with such a stinky topic is to tackle it head on.

If you wondered if there'll be lawyerly tales in the upcoming book, the answer is yes, but in some ways the shocking part is not that there are lawyers involved in the UltimateBet and Absolute Poker cheating tales, but rather, how many. Several ongoing storylines connected to these matters circle back toward perhaps the most famous of all gaming lawyers, Montreal-based Morden "Cookie" Lazarus, of the firm Lazarus Charbonneau, and Cookie's fingerprints spread from these sites' earliest days all the way into the the Norwegian tax matter that we touched on last time out. It's safe -- even "legally safe", har har -- to say that Cookie is one of the secret legal puppetmasters of the online gaming world.

And yet this isn't about Cookie... yet. This time out it's more a matter of introducing some new legal players into the growing roll of folks affiliated with Excapsa or UB. They've all been familiar to me for some time, and all seem to have things to answer for.

There have been plenty of lawyers affiliated with the UB operations, some as staff counsel, and others as consultants. Boil it down and leave out some of the high-priced freelancers for the moment, and the real Excapsa lawyers of interest number just three.

First, there's Sanford "Sandy" Millar, a California-based attorney who served as Excapsa's day-to-day tax and payroll attorney, knowingly doing all this for a US company (that being Excapsa) that was clearly violating US gaming laws as it operated out of Portland, via a pretense of a sham Toronto office that was little more than a secretary and a dropbox. Millar was there virtually from the start, and was a significant Excapsa shareholder.

Second, there's Stuart Hoegner, a hired gun who arrived on the Excapsa scene around the start of 2006 to assist in the company's London Stock Exchange IPO, and to help with possible sales of the company that were also being discussed. Except the UIGEA was thrown into the mix late in 2006, and it was Hoegner who played a key role in designing the complex shell sale to Absolute Poker that involved bringing former Kahnawake Grand Chief Joseph Norton on as a nominal frontman. Hoegner remains on legal distribution lists on Excapsa matters to this day, despite his relatively late arrival on the Excapsa scene.

Hoegner pops up on Twitter often under his @GamingCounsel tag, and I get an exceptional kick out of him trying to redefine himself as a legal media expert while avoiding utterly all discussions of Excapsa, in light of his previous role. It's fun antagonizing the guy on Twitter, knowing that the things I allude to are true and supported by documentation and that he could never withstand a discovery process if he was to get serious about suing me.

In leaving Stuey (for the moment), it's worth noting a recent paper he delivered at a Las Vegas gaming conference that examined several prominent online poker networks' relative legal protections, strengths and weaknesses as pertained to various jurisdictions, including the US. To which I say, "Of course he's the expert -- he just spent the better part of a decade learning exactly which fine lines to dance and which grey areas to skirt!" You can visit Stuey at the website for his "boutique" law practice here.

But even Hoegner pales to one Daniel S. Friedberg, one of the true secret bad people behind the Excapsa facade. Friedberg was there from the very start, and his role in online poker matters follows a strange route indeed. Friedberg graduated along with Phil Hellmuth from the University of Wisconsin in Madison, and seems to have served as Phil Hellmuth's personal attorney -- kind of an agent for Phil's interests, back when UB was born. Friedberg soon became Excapsa's general counsel, with all that involved, even relocating at one point to Toronto to help put a little real meat behind that otherwise-sham office.

Friedberg, though, is a Wisconsin/Seattle person, and these days he keeps about as low a profile as one could possibly imagine for a corporate attorney. No public Twitter or Facebook feeds for an attorney or his practice... really?

Friedberg can be found, however, at a small Seattle legal firm, Crest Law Group. Here's his corporate page, and what's so damned odd about is that all the personal highlights just stop in 2006. The final highlight, listed first on his official bio, is this:

• Corporate counsel for $100 million IPO on the London Stock Exchange AIM (2006)

That's a reference to Excapsa's failed London Stock Exchange IPO, and after that, Friedberg's history -- or so he'd like the world to believe -- just goes dark.

And now, just a bit more of the story....

It appears that Friedberg joining Excapsa at its inception was part of the complex package that also ensconced Hellmuth as the site's frontman, and for the first part of the '00s, UB's corporate history is pretty well known. Friedberg did quite well for himself, garnering several million shares of Excapsa stock in addition to his pay, with said shares distributed across several different ownership entities.

Then the UIGEA happened, the IPO collapsed, and the hasty "sale" to Absolute Poker was arranged, with terms of sale very unfavorable to Excapsa's rank-and-file shareholders. Amid all this, Friedberg switched sides, going to work for Absolute Poker and becoming Scott Tom's attorney as well. You read it right: Friedberg kept himself tied to the money stream, wherever it went, and the Excapsa shareholders whose rights he was suppose to protect were instead just a disposable commodity. The general shareholders screamed about the blatant conflict of interest, but to no avail. A few of the key UB insiders remained tied to Cereus, either through software deals or the endorser packages offered to UB site pros Hellmuth and Annie Duke. But the proletariat shareholders were given a highly dubious promissory note, and pretty much dumped by the attorney who was supposed to be protecting them.

Even for an attorney, that's disgusting behavior.

Having already jumped ship, it's no surprise Friedberg's bad behavior continued on the AP side, when the rank-and-file shareholders at Madeira Fjord were later jettisoned in a similar manner. There's even a tale that circulates among AP ranks of Friedberg unilaterally withdrawing a stock option previously promised to AP spokesman Mark Seif, leaving Seif much worse off and with a smaller ownership stake than his original performance contract intended.

The whole Scott Tom thing, too. Circles within circles, but some of them are pretty damned tight.

But wait, there's more! Last year, listeners over at Bryan Micon's Donkdown Radio site were treated to an impromptu interview with Travis Makar, who is generally described as Russ Hamilton's computer guy. Among other things, Makar, his wife and his mother also had their names on cheating accounts controlled by Russ. Makar went on Donkdown to discuss a few things and hinted at a secret recording that was made of UB execs once the UB cheating scandal erupted.

Makar won't talk about this recording, which I had previously learned of anyway, and which was made by Russ Hamilton himself. The added tidbit coming from his Donkdown interview is where he accidentally let slip one of the participants in the meeting -- Daniel Friedberg. Among the topics relayed as being discussed in that meeting were that several people cheated using God Mode, that they had to discuss what percentage of cheated funds they'd had to give back, and decide who could be left off the refund list.

This means that at the very least, Friedberg actively participated in the cheating coverup at at least one site, UB, if not also over at AP. This is one dirty attorney. Maybe that fact should be added to that Strathmore's "Who's Who" listing Friedberg seems to be fond of.

Was Friedberg one of the actual hole-card cheaters? It seems odd that corporate counsel would have access to the cheating tool, but stranger things have happened. Nonetheless, sources have indicated Friedberg may have indeed been involved, and while the actual hand histories that would prove or disprove Friedberg's involvement remain sealed, he is confirmed to have played on the site from 2000 onward. Friedberg had at least three UB accounts -- "SEATTLE", "DANRAYN" and "BIGLOULEO" -- that date from UB's earliest days, and all readers are free to research those accounts to check win rates and look for suspicious hands. There may have been other Friedberg accounts as well.

Should the real hand histories ever be made public, they could prove Friedberg's innocence (or guilt). This writer makes no definitive accusation, beyond the scummy lawyerly stuff, but merely notes that the wall of smoke surrounding Friedberg remains firmly in place.

There's also the strange departure of Hellmuth from Cereus at the end of 2010, which to my knowledge has never been adequately explained. Annie Duke was already off contract and was being paid a monthly retainer, and she and Scott Tom hated each other's guts anyway; no surprise she was jettisoned. Yet Hellmuth's contract, according to AP insiders, lasted at least another year, and Hellmuth seems to have invited AP to void his deal by showing up at a December '10 poker tourney wearing "Aria"-branded gear. Doing so was probably a million-dollar decision and seems decidedly unlike the dollar-focused Hellmuth, unless he was tipped off to something bad in the works, which generally describes the Norwegian tax mess then just beginning to swirl around Absolute Poker. With back-looking perspective, one possible explanation now emerges: Did Friedberg tip off Hellmuth that it was time to get out?

2 Comments:

Anonymous Anonymous said...

I really appreciate what you do. Great research!

I would really like to find out the truth about guys like Hellmuth. Hard for me to believe he had no involvement...

9:08 PM  
Anonymous Anonymous said...

Will your book or blog cover the RICO complaint related to Excapsa and UB

http://www.courthousenews.com/2012/01/17/43100.htm

2:47 PM  

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