Wednesday, July 02, 2008

Is 2008 World Series of Poker Gonna Be Cheat-Free?/Another Guilty Plea in International Baccarat Scam

I have not heard of any cheating allegations so far at this year`s WSOP, but don`t hold your breath too long thinking that the 2008 super poker tournament will finish up without any cheating scandals. If you do hold your breath, don`t forget that you will have to wait until mid-November to bear witness to a cheating-free WSOP--if it does indeed happen. For those of you who don`t realize it, there will be nearly a four-month interim between the determination of the final table of the 2008 WSOP championship event and the play of that final table, during which lots of time for conspiring, scheming and pre-cheating will be available for those directly and indirectly involved in the giant pot of prize money.

The WSOP in recent years has had its share of scandals. In 2005, counterfeit tournament chips were found in two different events. In 2006, the eventual champion Jamie Gold was accused of renegging on a prize-money percentage deal he`d made with a backer before the championship event began, and last year well-known and respected tournament player Bill Chen was accused of suspicious deal-making that supposedly led to chip-dumping and softplay incidents.

I will be very surprised if the 2008 WSOP championship event escapes scandals and scandalous activity, but we will have to wait and see. But with four months of "WSOP idleness," I can only imagine what schemes and scams are going to be concocted with all those millions at stake!

IN OTHER NEWS, another participant in the biggest casino scam in history pleaded guilty in court. You all remember the humongous international baccarat scam that hit dozens of casinos in the US and Canada last year and corrupted at least that many casino employees, most notably dealers and pit personnel. Well, now the major players in that scam are falling like dominoes with their guilty pleas in front of federal judges. The latest, Son Hong Johnson, 45, pleaded guilty today in San Diego to conspiring to participate in a racketeering enterprise, the "Tran Organization," in a scheme to cheat casinos across the country out of millions of dollars, Acting Assistant Attorney General for the Criminal Division Matthew Friedrich, U.S. Attorney for the Southern District of California Karen P. Hewitt and U.S. Attorney for the Western District of Washington Jeffrey C. Sullivan announced today. Johnson also pleaded guilty to conspiring to commit theft from the Emerald Queen Casino, an Indian tribal gaming establishment near Tacoma, Wash.

A three-count indictment was returned in San Diego on May 22, 2007, and unsealed on May 24, 2007, charging Johnson and 13 others each with one count of conspiracy to participate in the affairs of a racketeering enterprise; one count of conspiracy to commit several offenses against the U.S., including conspiracy to steal money and other property from Indian tribal casinos; and one count of conspiracy to commit money laundering. As part of his plea agreement, Johnson agreed to have a separate indictment against him transferred to San Diego for plea purposes. The separate indictment, returned on May 24, 2007, in the Western District of Washington, charged Johnson and seven others for alleged violations related to card-cheating activity at the Emerald Queen Casino.

The San Diego indictment also charged five separate individuals each with one count of conspiracy to commit several offenses against the U.S., including conspiracy to steal money and other property from Indian tribal casinos; and one count of conspiracy to commit money laundering.

In his plea agreement, Johnson admitted that on numerous occasions between approximately March 2003 and July 2006, he participated in gambling cheats together with other alleged members of the Tran Organization at casinos, such as: Emerald Queen Casino in Tacoma; Foxwoods Resort Casino in Ledyard, Conn.; Mohegan Sun Resort Casino in Uncasville, Conn.; Resorts East Chicago Hotel and Casino, East Chicago, Ind.; and Horseshoe Casino and Hotel, in Tunica, Miss.

Also in the plea agreement, Johnson admitted that he and his co-conspirators unlawfully obtained up to $7 million during card cheats. For forfeiture purposes, he agreed to a personal money judgment in the amount of $155,000, which will be entered by way of a preliminary order of forfeiture. He also acknowledged that the restitution that he may be ordered to pay by the court at sentencing is not limited by the forfeiture amount.

According to the indictment, the defendants and others executed a "false shuffle" cheating scheme at some of the listed casinos during blackjack and mini-baccarat games. The indictment alleges that members of the criminal organization bribed casino card dealers and supervisors to perform false shuffles during card games, thereby creating "slugs" of un-shuffled cards. According to the indictment, after tracking the order of cards dealt in a card game, a member of the organization would signal to the card dealer to perform a "false shuffle," and then members of the group would bet on the known order of cards when the slug appeared on the table. By doing so, members of the conspiracy repeatedly won thousands of dollars during card games – up to $868,000 on one occasion.

The indictment also alleges that the members of the organization used sophisticated mechanisms for tracking the order of cards during games, including hidden transmitter devices and specially created software that would predict the order in which cards would reappear during mini-baccarat and blackjack games.

An indictment is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

Johnson’s sentencing is scheduled for Dec. 8, 2008, in San Diego, before District Judge John A. Houston, in U.S. District Court for the Southern District of California. At sentencing, Johnson faces a maximum sentence of 20 years in prison on the racketeering conspiracy charge and a maximum of five years in prison on the conspiracy charge relating to theft from an Indian tribal gaming establishment.

Johnson is the eleventh defendant to plead guilty in the San Diego indictment. Phuong Quoc Truong, Anh Phuong Tran, Martin Lee Aronson, Liem Thanh Lam, George Michael Lee, Barry Wellford, Willy Tran, Tuan Mong Le, Duc Cong Nguyen and Han Truong Nguyen have all pleaded guilty to charges against them related to this scheme. Han Truong Nguyen was sentenced on May 12, 2008, to 27 months in prison and ordered to pay $1,896,659 in restitution, payable to designated victims in the case. Nguyen was also ordered to serve three years of supervised release. The remaining defendants who pleaded guilty are awaiting sentencing.

The case is being investigated by the FBI’s San Diego Field Office; the Internal Revenue Service-Criminal Investigation; the San Diego Sheriff’s Department; and the California Department of Justice’s Bureau of Gambling Control. The investigation has received assistance from federal, state, tribal and foreign authorities, including: the Ontario Provincial Police; the National Indian Gaming Commission; the U.S. Attorney’s Office for the Western District of Washington; FBI Resident Agencies in Gulfport, Miss., Tacoma, and Toledo, Ohio; the Indiana State Police; the Rumsey Rancheria Tribal Gaming Agency; the Sycuan Gaming Commission; the Barona Gaming Commission; the Mississippi Gaming Commission; the Washington State Gambling Commission; and others. The prosecution of the case is led by the Criminal Division’s Organized Crime and Racketeering Section (OCRS). Department of Justice Trial Attorneys Joseph K. Wheatley, Robert S. Tully and Gavin A. Corn are prosecuting the indictment in San Diego. Assistant U.S. Attorney J. Tate London of the U.S. Attorney’s Office for the Western District of Washington, is prosecuting the case in Seattle related to alleged cheating at the Emerald Queen Casino.

Sunday, June 29, 2008

Annie Duke Speaks Out Again on Absolute Poker and Ultimate Bet Cheating Scandals

The cheating scandals surrounding online poker sites and its sister Absolute continue to make waves in both the mainstream and industry media and in the player community, and the latest element in what seems to be a concerted damage control initiative by the owners is a Poker News video-streamed interview with the much respected poker pro Annie Duke.

This can be accessed at the Poker News Website,

Duke has a long association with UltimateBet and has been involved in both operational and branding endorsement for the website. Apparently last fall she was disenchanted with the way things were going and was thinking about distancing herself from the enterprise. In January this year, the 'hole card' scandal broke and apparently the change of management that occurred convinced Duke to revise her position in a move that was "a big 180 for me."

The cause of this epiphany was apparently the transparency of the new management, headed by CEO Paul Leggett; the way in which it handled the crisis (paying out an unspecified but claimed "seven figures" to affected players); getting rid of the "bad apples" responsible for the scandal and a bigger say for Duke in the conduct of the business.

Judging by her comments in the interview Duke is now firmly on board and confident that the historical problems have been fully addressed, although management is still considering the pursuit of those responsible. This is apparently problematical due to legal considerations around identifying the culprits and under which jurisdiction to pursue them.

Duke follows the company line in claiming that company revenues were not affected by the crisis, which is surprising when one considers the magnitude of the cheating and the editorial coverage it received. The company strategy of recruiting big poker names to endorse the website is also apparent in her comments.

Listening to the interview, there are confusing references to both 'change of management' and 'change of ownership'. This gives little clarity on who owned Absolute/Ultimate Bet prior to its acquisition by Tokwiro Enterprises, a Kahnawake registered company owned by former Mohawk grand chief Joe Norton, or what Tokwiro paid for the companies and when.

The UltimateBet story is not about to fade away. In her interview Duke confirmed information circulating for some months in the industry that the mainstream television investigative program "60 Minutes" is about to air the scandals. Producers for the program contacted Duke whilst she was at the ongoing World Series of Poker, although she does not amplify what was discussed.

Subjectively speaking, we had the impression that this was a continuation of the damage control initiative which the "new management" has been so vigorously pursuing, suggesting that the impact of the cheating scandal may have been bigger than UB would like to acknowledge. The role of the major poker forums in driving the resolution of these scandals also appeared to be underplayed, whilst the proposition that bashing UB was not good for the industry is arguable.

That said, the potential for harm to the industry's credibility that an adverse "60 Minutes" take on the affair is likely to have is a legitimate concern. What a pity that the systems at UB/AP failed in the first place, bringing about this crisis.

July Scam of the Month Posted!

My July scam of the month is "The Cooler." I am not talking about the 2003 casino movie of the same name starring Alec Baldwin and William H. Macy, but rather of a very effective casino cheating scam used by dealers to rip off the casinos they work in. Click here to read about it.