Unreported Corner: FTC Dips into Sunfirst Bank Online Poker Funds, Snags $6.8 Million

sunfirst-bank-logoCatching up with an as-yet-unreported story of significant interest to online poker players, particularly those former US customers of PokerStars and Full Tilt, two of the three (and the two largest) US-facing sites that were bounced from the American market after April, 2011’s “Black Friday” indictments.

Court documents recently obtained by 4Flush and this author show a deal reached by Federal Trade Commission and Department of Justice lawyers that calls for a 50:50 split of funds seized from accounts at the SunFirst Bank of St. George, Utah.  Four SunFirst accounts containing more than $13.62 million, largely consisting of online-poker funds, were divvied up between US Marshals working on behalf of the Department of Justice and the court-appointed receivership of Robb Evans and Associates, working on behalf of the Federal Trade Commission.

The interests of the FTC in what appears on its surface to be an unrelated online-poker matter has its roots in the massive and ongoing investigations into the activities of Utah marketer Jeremy Johnson.  Johnson and his tele-/internet marketing firm, iWorks, have been the subject of an ongoing, massive $275 million FTC trade lawsuit alleging telemarketing fraud and other felonies.

The crossover into online-poker matters began in late 2009, when online-payment processor Chad Elie, at one time associated with the failed Intabill processing arrangement, contracted with Johnson and other partners of Johnson’s to provide similar processing services for PokerStars and, later, Full Tilt.  Johnson in turn had internal banking connections to Utah’s SunFirst Bank, and convinced that bank’s officers that processing online-poker players was legal.

That arrangement lasted until December of 2010, when the Federal Deposit Insurance Corporation (FDIC) shuttered the poker processing, citing violations of third-party-payment-processing (TPPP) protocols.  By that time, Johnson had already been targeted by the FTC for his iWorks activities, which included forced upsells and unauthorized credit-card charges.

The FTC and their contractor, Robb Evans & Associates were then tasked with the seizure of Johnson’s assets, and in 2011 discovered a massive commingling of accounts between Johnson’s iWorks and online-poker operations, both of which connected to dozens of corporate shell accounts controlled by Johnson and his associates.  In all, more than 61 corporate entities were uncovered by the Robb Evans search, which involved a warrant being served on a Jeremy Johnson-run office location in January of 2011.

The problem , which eventually resulted in the recent FTC-DOJ deal, is that Johnson and his acountants freely shuffled money into and out of various corporate accounts connected with online poker, iWorks and other businesses, in addition to extracting many millions into a handful of personal accounts.  While all that is detailed in nearly 1,000 pages of documents seized and later published by the Evans group, the fate of the $13.62 million in the four SunFirst accounts, along with four other related accounts not at SunFirst but seized as part of the DOJ’s Black Friday crackdown, remained uncertain.

The recent deal between the FTC and DOJ resolves that.  The deal was signed in late July but was not immediately filed into the case’s online documents.  The four SunFirst accounts in which online-poker funds were found as of Friday were as follows:

  • Account numbered  12900584 held at Sunfirst Bank, St. George, Utah, formerly in the name of SunFirst Bank ITF Powder Monkeys/Full Tilt, now in the name of Sun first Bank, and all funds traceable thereto (“Account 1”), with an amount of $8,495,522.22;
  • em>Account numbered 129000576 on deposit at Sunfirst Bank, St. George, Utah, formerly in the name of Sunfirst Bank ITF Mastery Merchant/Pstars, now in the name of Sunfirst Bank, and all funds traceable thereto (“Account 2”), with an amount of $5,112,102.97; 
  • Account numbered  121015408 held at Sunfirst Bank, St. George, Utah, in the name of Triple Seven LP d/b/a Netwebfunds.com. and all funds traceable thereto (“Account 3”), with an amount of $9,025.26; 
  • Account numbered  1210] 5390 held at Sunfirst Bank, St. George, Utah, in the name of Triple Seven LP d/b/a A WEB DEBIT, and all funds traceable thereto (“Account 4”), with an amount of $7,805.19.

The two Triple Seven accounts have already been previously identified as PokerStars-related accounts in previously published court documents and depositions.  The grand total of $13,624,455.64 is to be split equally between the FTC (via Robb Evans) and the DOJ, $6,812;2.27.82 to each agency.

In addition, three other accounts connected either directly or indirectly to PokerStars’ US-facing operations may be divvied between the DOJ and FTC in a similar 50:50 manner, although the seizure efforts against those accounts appear to be ongoing.  Those three accounts, with uncertain balances therein:

  • Account numbered 5510045221 held at Wells Fargo, NA., in the name of Triple Seven L.P., and all funds traceable thereto (“Account 5”);
  • Account numbered CYI211501001065983USDCACC002 held at FBME Bank LTD, Cyprus, in the name of Triple  Seven Inc., and all funds traceable thereto (“Account 6”);
  • Account numbered 7478010312 held at Wells Fargo, N.A., in the name of Kombi Capital, and all funds traceable thereto (“Account 7”).

An eighth account, possibly also connected to PokerStars and located at the bank of Societe Generale Cyprus, called Golden Shores Properties Limited, was not included in the agreement.  Whether this is because the account in question was insulated against US-based seizure attempts or was not proven to be in anyway connected to the FTC’s claims is not made clear in the agreement.

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