The Missing Intabill Millions, Part 3: The Real Black Friday Culprits

impact-payment-systems-logoJames Leighton, the author of Alligator Blood, the recent book about the rise and fall of Daniel Tzvetkoff and online payment processing firm Intabill, has a unique take about 2011’s Black Friday series of indictments aimed at the US-facing online poker scene.’s Lee Davy wrote this about Black Friday while interviewing Leighton: “Alligator Blood covers the key relationship between Daniel Tzvetkoff and Curtis Pope as they formed Hugo Services. It is this relationship that Leighton believes brought down the online poker industry in the USA.

“’Curtis Pope is a much bigger figure than people believe. He is a fascinating character and people will see that when they read the book. I think people will enjoy reading about him,’ said Leighton.”

Curtis Pope, one of the two heads of a conglomeration of US-based financial business companies which included Trendsact, Hugo Services, Selling Source and PDL Ventures, is indeed a much bigger figure in Black Friday affairs than generally known.  Along with his co-entrepreneur, John Scott Clark, the two were really the key figures in the chain of events that led to Black Friday and the forced exit from the US poker market of major sites such as PokerStars and Full Tilt.

Tzvetkoff?  Yes, he was involved, too.  And Tzvetkoff absolutely turned confidential informant for the Department of Justice after being arrested by FBI agents in Las Vegas in April of 2010.  But this was almost a full year after Intabill collapsed, a year in which several US agencies can be shown to have been actively investigating Clark and Pope.

Tzvetkoff was not the key Black Friday informant, despite his pride in claiming to have done so out of vengeance for Intabill’s poker business being stolen from him by Clark and Pope.  The documents available in other court cases show a different truth: Due to ongoing investigations involving the Utah pair, Black Friday was likely to have happened any way — and at about the same time, in mid-2011 — whether or not Tzvetkoff was involved.  The key figures in the ongoing US investigations were Pope and Clark, not Tzvetkoff.

In fact, the prevailing media theories that it was Tzvetkoff who fingered Clark and Pope in addition to the online poker sites is probably wrong; it was probably the other way around, with Clark in particular detailing Tzvetkoff’s activities after his own arrest on gambling charges.

That brings up another general Black Friday misconception: Since Tzvetkoff’s arrest occurred in Las Vegas, many people believe the arrest was orchestrated by Full Tilt execs — possibly Howard Lederer or Chris Ferguson — who had sued Tzvetkoff and Intabill for $52 million nearly a year earlier.  But that theory is akin to Swiss cheese for all the holes it has; not only would tipping off the feds potentially alert them to Full Tilt’s own illegal banking activities, a jailed Tzvetkoff would have even less means or incentive to pay what he and his company owed Full Tilt.

Instead, it was likely Pope, Clark, or one of their Utah or Nevada business associates who blew the whistle on Tzvetkoff’s return to Las Vegas, unlike reports such as this one from Australia, which has the theme right but gets the facts backwards.  James Leighton never quite answers the question of who blew the whistle on Tzvetkoff amid the pages of Alligator Blood; it’s actually one of the minor problems with the book.  However, payment processor Andrew Thornhill, another close associate of Curtis Pope’s, has frequently been rumored as one person who was in position to report Tzvetkoff’s presence in Vegas to US authorities.

It might have been Thornhill.  It might have been someone else.  But it probably wasn’t Howard Lederer.

Daniel Tzvetkoff, for all his fame, is someone whose real story is remarkable but doesn’t quite add up to his reputation and Black Friday-causing claims.  Let’s construct a simple pre-Black Friday timeline of events, which yours truly has constructed from several different sources, including federal court dockets:

April, 2008: Intabill and Tzvetkoff reach an agreement with Curtis Pope, John Scott Clark and their Impact Payment Systems business to use Impact’s ACH processing channels to assist Intabill’s growing poker processing needs.

August 2008: Intabill and Pope/Clark’s Impact firm lose $3 million after a holding account is seized at E-Z-Bill a processing firm being used, as told in the pages of Alligator Blood.  However, E-Z Bill had previously been busted by federal investigators for online-gambling processing.  From this point onward, the activities of Impact Payment Services and Intabill were likely starting to attract the attention of federal investigators.

August 8, 2009: The earliest reference to John Scott Clark in a gambling case being investigated by Assistant District Attorney of the DOJ’s SDNY office of Preet Bharara, Arlo Devlin-Brown.  Devlin-Brown’s name should be very familiar to anyone who’s read about Black Friday legal matters.  A sealed indictment was filed, and a series of continuances granted as the DOJ and other US agencies continued a combined investigation.

December 14, 2009: Trendsact principle John Scott Clark is indicted on four gambling offenses connected to major online poker sites.  It is one of two arrests (along with Pope’s) that force the hand of PokerStars and Full Tilt into doing processing with the St. George, UT SunFirst Bank consortium led by Jeremy Johnson and Chad Elie.

March 25, 2010: The Securities and Exchange Commission files a major civil action against John Scott Clark and Impact Payment Systems, another payday-loan business in the large umbrella of corporate entities controlled by Clark and Pope.  The SEC alleges large-sale securities fraud and a complex Ponzi-style scheme also involving the commingling of funds from several different shell businesses.  The DOJ does not learn of this case until March, 2011 (see below).

April 16, 2010: Intabill founder Daniel Tzvetkoff is arrested in Las Vegas while attending an online payment processing conference.  After being denied bail and threatened with 75 years in prison, he turns cooperating witness and is relocated to New York City.

July 2010: John Scott Clark’s partner, payment processor and payday-loan operator Curtis Pope, is indicted and arrested on a series of online gambling-related charges that mirror those filed against Clark seven months earlier, minus the witness tampering (below).  It is another solid indication that Clark has been acting as a government informant.

Pope’s indictment includes the revelation that US authorities have tracked over $543 million in online-poker transactions dating back to February 2008, when Tzvetkoff and Intabill first came calling.  It appears authorities allowed the Pope/Clark processing to run for an additional six months in early 2010 as they gathered information about the poker processing, and it is likely during this period that the activities of Chad Elie (another prominent Pope business associate) and his new SunFirst operation draw investigators’ attention.

Neither the Pope or Clark arrests make the poker-world headlines, though the shuttering of the Trendsact / PDL / Hugo / Impact / (more firms) processing channels is keenly felt by Stars and Tilt, among other US-facing sites.  And, if the February 2008 date is correct, it means that Clark and Pope were processing online gambling money for two months before they entered the deal with Intabill and Tzvetkoff.

November, 2010: Chad Elie and Jeremy Johnson’s SunFirst Bank processing operation is shut down by FDIC decree.  Full Tilt has run out of US processing channels and begins a massive fake-deposit floating scheme that sinks the company soon after Black Friday.

March 30, 2011: The DOJ files a brief in John Scott Clark’s case informing the presiding judge that they are yanking a confidential-informant deal previously in place with Clark, and are requesting the unsealing of all related court documents, as the investor-fraud case involving Clark’s various businesses continues to expand.  Amazingly, one of the four gambling charges Clark faces (and which had been sealed) is a count of witness tampering, which US investigators recorded as it occurred.

April 15, 2011: Online poker’s “Black Friday,” in which the DOJ aims it targets at major US-facing online poker sites, based largely on illegal manipulations of the US banking system.

May, 2011: The SEC deposition of Clark accountant Brandon Cowley sheds further light on the Trendsact / Hugo / PDL gambling processing, which involved many other entities and corporate names as well. Cowley testifies that Clark, Pope and Tzvetkoff maintained as many as 50 distinct dummy entities to use for poker processing after some banks began to discover the real nature of their poker processing.  Among those shutting the door before the SunFirst processing started up was another Utah-based bank, Zions.

From this timeline, it can be clearly be seen that the processors who flipped first were almost certainly Clark and Pope, and not Tzvetkoff, as reports of the day claimed.  Clark was supposed to be a confidential informant until his other business activities spoiled that deal, as was Jeff Nelson, another important cog in Clark’s and Pope’s processing business who none other than Chad Elie has alleged was a “big time” confidential informant (CI) in the various cases.  According to Cowley, Nelson was hired by Clark and Pope to assist the with the US side of the Intabill processing.  Whether Nelson was charged and turned CI as a result is unconfirmed; he does not appear in PACER court records, which would not disprove Elie’s claims in any case.

The timeline above should help to clear some of the frequent misconceptions about Black Friday and the events that led up to.  Daniel Tzvetkoff was an important figure, but not quite as important as he himself always wanted to be.  Curtis Pope was more important, and eventually Pope’s relationships with other payment processors would have caused all the other dominoes to fall.

Even more than Curtis Pope, however, John Scott Clark stands at the top of the list.  Though he eventually blew his own deal, his months of serving as a confidential informant while poker processing continued in 2009 and 2010 likely gave investigators in several agencies all they really needed.  Black Friday was going to happen, and it was going to happen, more than anyone else, because of John Scott Clark.

No photos of Clark?  The only two I’ve found of him are personal photos from Daniel Tzvetkoff’s collection, as published by James Leighton in Alligator Blood.  If Leighton and his publisher allow it, I’ll publish a photo of the man who may be more responsible for Black Friday than any other.

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