Gambling911 World Exclusive: The Russ Hamilton Recordings, Who Knew What

Written by:
Jagajeet Chiba
Published on:
May/16/2013
Gambling911 World Exclusive: The Russ Hamilton Recordings, Who Knew What

The poker community listened with fascination and disgust this week, after Russ Hamilton's personal assistant, Travis Makar, released audio of secretly recorded meetings between Ultimate Bet founders and lawyers.

In the recordings, Russ Hamilton, Greg Pierson, Daniel Friedberg and Sanford “Sandy” Millar openly discuss their involvement in fraud, manipulation of shareholders, bribery and theft on a massive scale.

The audio provides us with an unprecedented glimpse inside Russ Hamilton's inner circle in the days that led up to the uncovering of, what would become, the biggest cheating scandal in the history of poker.

It's not every day, after all, that we get the opportunity to be a fly on the wall, while company executives freely admit to their roles in a criminal conspiracy and brainstorm ways to cover it up.

In the end, it all proved futile, and when the story inevitably broke, conspiracy theories were rife. Anyone and everyone became suspect; from top pros like Phil Hellmuth, to low-level customer service reps in Costa Rica. Poker players were furious and wanted answers -- answers that would prove hard to come by.

But now, with the newly released audio, we have the opportunity to do something that wasn’t possible before: find out exactly who knew what; directly from Russ Hamilton's mouth.

So, let's break down the major players from the recordings and see what we can infer from their conversations.

In the meetings

Russ Hamilton

Russ was one of the founders of Ultimate Bet. He was the main perpetrator of the cheating and stole around $23 million over many years using the "fraud prevention" tool known as AuditMonster. His guilt is beyond doubt as he plainly states in the recordings that, "I did take this money."

We also learn that he used some of the stolen millions to prop up the business by staking players and using the money for marketing. According to Hamilton, the site might have even gone under had he not used the stolen funds for that purpose. Ultimate Bet was built with stolen money, Gambling911.com has since learned. 

Greg Pierson

Pierson was another Ultimate Bet founder and focused on the tech side of the business. The audio clearly shows that he had knowledge of the cheating right from the start.

He can be heard continually, yet gently, asking Russ how much money he can kick in to pay back victims (Answer? None).

Hamilton even mentions that Pierson used the tool himself, but lacking poker knowledge, played in such a conspicuous way that he made him stop.

Pierson went on to found -- ironically -- an online fraud protection company called Iovation, where he still serves as CEO today. And since his new company was spun off from Ultimate Bet, it probably wouldn’t be much of a stretch to suggest that Iovation was seeded with stolen money as well.

Daniel Friedberg

Dan was an old college alum of Phil Hellmuth's and served as the poker pro's personal attorney. He later positioned himself as general counsel for Excapsa and followed the money trail wherever it led.

When Ultimate Bet was being sold to Absolute Poker, Friedberg -- in a major conflict of interest -- switched sides and became Scott Tom's personal attorney, effectively representing both parties in the deal.

From the audio, we can see that Friedberg was intimately aware of the cheating, as he strategized with the group on ways to limit restitution to players and disguise the theft.

Sanford "Sandy" Millar

Millar served as the tax attorney for Excapsa. The California-based lawyer was present during both recordings, plotting with the rest of the group on how to downplay the cheating and minimize payments to players.

His participation in both meetings shows that he was well-aware of the scope of the theft and was deeply involved in the resulting conspiracy.

Discussed in the meetings

Freddie Deeb

Deeb's involvement in the scandal is murky. From screenshots provided by Makar and conversations held during the damage control meetings, it's clear that Deeb received a huge amount of money through transfers initiated by Russ.

While nothing that was said on the leaked audio explicitly implicates the poker pro in any cheating, it's obvious that he had a very close relationship with Hamilton, and was receiving vast amounts of cash from him.

Perhaps Deeb, wary of killing his golden goose, simply suppressed his curiosity and resisted the urge to ask questions about the money's origin.

Annie Duke

The recordings could prove to be a major headache for Duke, who has a little explaining to do.

The poker pro was a prominent spokeswoman for the Ultimate Bet brand for many years. She had previously claimed to have no knowledge of a tool which would allow someone to cheat or see hole cards -- but the recordings say different.

Hamilton states on multiple occasions that Duke had used AuditMonster, on a "15 minute delay," many times.

He even suggested that she had her own copy of the tool.

Therefore, she obviously did know that the capability existed.

In response, she fired off three tweets from her Twitter account claiming that she had only used the tool while doing commentary for Ultimate Bet tournaments.

But here's where things get interesting; it just so happens, that one of these tournaments -- where she had access to AuditMonster -- was won by her then boyfriend (a poker novice), who took home a prize of over $200,000.

Unlucky coincidence for Duke? It's hard to say, but we think there's definitely more to the story than can be brushed away with a few simple tweets.

Jim Ryan

Ryan was picked for the job of Ultimate Bet CEO when Pierson split Iovation into a separate business.

Ryan's name comes up many times throughout the meetings, but no one explicitly states that he had knowledge of the fraud.

So, he was either totally unaware of what was happening at his own company, or he preferred to turn a blind eye to all the funny money that was being passed around by Hamilton to fund promotions and marketing (and houses).

Unlike others involved, his reputation in the poker world remained untarnished and, inexplicably, he later secured another CEO position at Party Gaming, one of the largest online poker companies in the world.

Paul Leggett

Leggett was brought in to clean up the mess created by the Absolute Poker cheating scandal, but soon faced a scandal of his own.

As the new face of Absolute Poker/Ultimate Bet (Cereus), Paul quickly became the poker world’s punching bag. Cheated players were looking for someone to blame, and Leggett was an easy target.

Leggett's name was mentioned multiple times during the recordings. But at no point did the group implicate him as being involved in any conspiracy to cover up the theft. On the contrary, they discussed how they might manipulate him.

At one point in the recording, Hamilton pushes to bring in his own shill investigator (Tom McEvoy), which Leggett rejects, preferring his own (a mathematician) to review hand histories.

The fact that they repeatedly say things like, "Paul keeps asking questions" or "Paul is looking for information," underscores the notion that he was being kept in the dark just as much as anyone else.

Leggett recently resurfaced at Amaya Gaming.

Phil Hellmuth

Hellmuth wasted no time in voicing his disgust with the situation, releasing a statement soon after hearing the recordings.

Although Phil was an integral part of Ultimate Bet, Hamilton's inner circle had carefully built a "bubble" around him, limiting his access to information.

This is corroborated by the recording of the first meeting, when the group agrees that Hellmuth would be the "absolute worst person" to bring into the loop.

He was reportedly so convinced that Pierson wasn't involved, he refused to believe it until he heard the audio himself. 

Travis Makar

Last year, Makar came out of anonymity and made the fantastic claim that he had downloaded a cache of incriminating evidence from Russ Hamilton's computer and was ready to show it to the world.

Lo and behold, it actually turned out to be true, and last week he made good on the threat.

Makar was Hamilton's personal assistant and had swiped the data while fixing his computer. He claims that he feared his former boss would try and pin the fraud on him and kept the recordings as a kind of “insurance policy.”

That's his version. The more likely explanation is that he did it for money. At this point, Hamilton had gotten very comfortable passing out bribes, and Makar probably wanted a cut too. 

He was right about one thing though: Hamilton did indeed plan on pinning the theft on Makar, but it doesn't sound like the assistant was an unwilling participant. Hamilton makes references throughout the meetings about his "guy" (Makar) being prepared to take the fall. I’d guess there was a large monetary incentive involved to take the blame for a crime like this.

So why did he release the audio now? Were bribes not paid? Was he settling a score? Whatever the reason, the recordings are already starting to have real-world repercussions, and more than a few people are very nervous about what could be revealed next.

-  Compiled by Jagajeet Chiba, Ace King, Jenny Woo for Gambling911.com

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