Former BoS Executive: The Customers Will Receive Some Payment
Gambling911.com reporter Jenny Woo continues her interview with former BetonSports COO, Clive Archer.
See Part I of her interview here
----
JENNY: The Internet gambling industry has received a lot of negative press and attention. Do you think David Carruthers should take the sole blame for this?
CLIVE: No, I think David's actions made him a target, but he was genuinely standing up for a regulated market and for the industry. In hindsight, perhaps he went too far and provided more ammunition to the DOJ. But that¹s easy to say now. You have to remember the majority of the indictment was pre the IPO and the details of the indictment show it was several years in the making. It was a long-term plan. You have to ask yourself where all the information in the indictment came from because it was unbelievably detailed. So I don't think David was the cause, but he certainly was a catalyst. At the time, I believed his approach was ill-advised and he ignored the warning signs and information he was given that there was a case being prepared. Furthermore, I believe he failed in his obligations of risk management as he did not apprise the board of these things. But as I said, hindsight is 20/20 and I don't believe David had any idea of the scale of what was about to happen.
JENNY: There were reports that David knew months in advance that the US Government had a case against BoS and he chose to keep others in the dark. Are these reports true? Were the other shareholders made aware of this?
CLIVE: I heard these reports too and would be seriously disappointed if they prove to be correct, however, the biggest loser from not taking any action is clearly David. It should be remembered that a number of companies floated on the UK Stock Exchange that undertook business in the US over the internet. Millions in funds were invested in these companies and their advisers would have checked the legal position before approving these investments, so the understanding was that the business operations were legally permitted. I have not seen a report that questioned this understanding before the indictments were issued.
JENNY: What about Payment Processors withholding funds? Is this the reason why customers have not been paid? Also, what has been done - if anything - to get this money returned?
CLIVE: There¹s still a substantial amount owed to BoS by Payment Processors and others, I believe. I'm no longer privy to the details as this is in the hands of the liquidators. The money that is owed by this group is the main source of funds for any repayment of creditors - who are mainly the customers. The mainstream Processors returned the money promptly but the secondary Processors and others have held onto the funds thus far. When Richard and I were still there, we chased the funds daily, even traveling to Germany and Spain to hunt them down. Unfortunately, we had no funds or resources to press legal actions and so we had limited success. The responsibility for chasing this debt now rests with the liquidators and they have continued to chase the money with the assistance of the DOJ I believe.
I¹m not aware of the details of what they might have achieved as I am no longer directly involved. I only help out where I can, with the provision of information to the liquidators when they need assistance.
JENNY: There were reports that you and the other directors were helping the DOJ in their cases against David and Gary. Is this true?
CLIVE: As part of the BoS plea the plea agreement has a clause that says someone from the company has to, if asked, verify any documents as to whether they were or were not true BoS documents. It is I believe a standard clause in such agreements and anyway as a Public Company any legal body can request such information. This was misinterpreted by some commentators as us agreeing to testify against Gary and David. This is fundamentally not the case. Firstly the majority of the indictment is in the pre-IPO period when none of the directors were in the Company so they have no knowledge of activities in this period other than hearsay. Secondly no documents have ever been produced for verification. Thirdly I think anyone who reads the indictment can see the detail incorporated in it and from what I hear the amount of detailed documentation behind the case is significant so it would seem that they need nothing more. Fourthly we have never been asked. There has been no direct contact between the DOJ and any of the directors, other than one call I had with Richard where we were explaining the financial position of BoS at the time of the indictment in order to show them that there were no surplus assets. There was no discussion or information purporting to David or Gary in that call.
JENNY: Will customers ever be paid?
CLIVE: The customers will receive some payment. The liquidators have written to them saying it will be cents on the dollar. The amount depends on the recovery of funds. It's upsetting that the loyal customer base won¹t get their money back, but I can honestly say that the directors did all they could to get them paid and the liquidators have continued along this path. The same is true for the staff, but all staff was paid for the work they did. The outstanding amounts are for their termination payments which have not been fully paid.
JENNY: There was an excerpt in a 2007 article about a man in Alabama threatening BetonSports. His threats basically said that he would find you (meaning BoS) with his troops and have his 9mm pointed at your head. Did you get many threats similar to that? And, did threats of this nature have the BoS team constantly looking over their shoulders?
CLIVE: I personally received several such threats from both US and Costa Rica. But I never took them too seriously because I believed that people would see that the bad guys here were not us. Of course, it was unsettling but it wasn¹t a factor in any decisions. The ironic part was that they were threatening the very people who were trying hardest to get their money back to them.
JENNY: Have you had closure from the chaos with BetonSports? And, if not, what do you think it¹ll take for you to have complete closure?
CLIVE: No, I haven't experienced any closure. My direct involvement has ceased, but it still hangs around like a bad smell. I have finally been able to move on to a new, full-time job with Action Poker Network (which has no US customers). Before this, I was forced to undertake short-term jobs to pay the mortgage. You see, contrary to some press speculation, I didn¹t make any money out of the situation. In fact it was quite the opposite. It seriously damaged my financial health. Still, I don¹t regret it; I loved every moment at BoS and am proud of what the team achieved prior to the DOJ action. But closure for me is a small thing compared to the situation that David and Gary and others are in. It's outrageous that David has been held in the US without a trial for over 2 years and Gary for over a year. I¹m ashamed of my government¹s lack of action with regard to David's position and every US citizen should be ashamed at its government¹s treatment of him. I don¹t think closure for anyone involved will happen until the cases are settled.
JENNY: What¹s going on with you post BetonSports? And what do you have planned for the near future?
CLIVE: As I said, I've joined Action Poker and have been here for 4 months plus. We have lots of exciting things planned and have launched the Million Dollar Poker Club - which is a whole new approach to Poker. Itfeatures Weekly million-dollar tournaments and training from top poker pros. There are many other things on the drawing board, and I am also enjoying being involved in emerging markets that have great potential. I love the gaming industry and want to remain part of it, although I must admit there have been times in the last 2 years where I wanted to walk away. If the proper regulatory environment can be created, this is a true entertainment industry. I believe bringing proper professional management into this space is the way forward and that¹s what we did at BoS. The results were amazing and we¹re doing the same thing here at Action Poker. I¹m very excited about this opportunity and confident we¹ll soon be a major player in the Poker space and more.
JENNY: I thought I'd ask this since you're from the UK. Did you hear about the robbery in which a 27-year-old man robbed the bookmaker, Ladbrokes, with a vibrator?
CLIVE: Yeah, I guess he thought they were pussies! (I couldn¹t resist that!)
JENNY: The floor is yours if you¹d care to clarify anything that has been said or unsaid. Is there anything else that you¹d like the public to know?
CLIVE: There are a lot more details I would love to share and I¹m sure one day this will make a great movie. But I really can¹t right now due to confidentiality issues and also because of the ongoing legal process. I just hope that people will see that we did everything possible to reach the best solution for everyone. Obviously, we didn¹t attain our goal, but it was not for want of trying on our part. The team at BoS achieved great things prior to the indictment and the Company was quickly growing beyond its IPO size and had vastly improved its offerings to the customers. However, when the axe fell, the fact that we were a Public Company gave us no options - and the end was inevitable. It did give other public companies time to sell off their US businesses, which was not an option for us. I hope this interview helps others understand what happened a little better, and I hope that the cases against David and Gary are resolved quickly. The action taken by the US Government was the reason why the customers lost their money. The DOJ wouldn¹t allow us any leeway or provide any support in recovering money so that creditors could be paid. They were convinced there was money somewhere and it took over a year to convince them otherwise. It was an unfortunate end to a great Company and, personally, I¹m proud of my involvement. At the same time, I'm also disappointed we couldn¹t have achieved a more satisfactory ending.
----
Jenny Woo, Gambling911.com Senior Correspondent
