DOJ Proposes Absolute Poker Asset Forfeiture

Absolute Poker and Ultimate Bet, the two sites that comprised the Cereus Network, appear to have agreed to forfeit their assets to the U.S. Government.  In a court document dated July 31, 2012, the U.S. Attorneys Office in the Southern District of New York filed a “declaration in support of the Government’s motion for (1) for the entry of proposed stipulated order of settlement” and “(2) for an order, pursuant to Rule G(7) of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions”.  In other words, the U.S. Government and the companies that make up Absolute Poker have agreed on a civil forfeiture and are seeking the court’s approval.

The companies involved are Absolute Poker, Ultimate Bet, Absolute Entertainment, Blanca Games, Inc, Hoop & Javelin Holdings Limited, Lacrosse Holdings Limited, Hoop Payment Solution Services, and Morning Bliss Overseas Ltd.  The companies are known collectively as the “Absolute Poker Settlement Group”.

Blanca Games assets were received through “bank fraud, wire fraud, money laundering, and operation of illegal gambling businesses”.  The group agreed to forfeit all assets associated with the business but did not admit any guilt in doing so.  They also are obligated to hold all liabilities associated with the company.  This is presumably the debt owed to players, affiliates, and vendors, although the U.S. Government could use some of the forfeited assets to cover some of the group’s liabilities.

Absolute Poker agrees to cooperate fully with the US Attorney’s Office for the Southern District of New York and give full property description, location of property, information on liens/loans, contacts for current custodians, acquisition value/book value, fair market value, current purchase offers, as well as ID and contact info of interested parties.

Duff and Philips LLC has been retained by DOJ in helping to recover and value the Absolute Poker assets.  Duff and Philips representative Jaime C. D’Almeida states that the Absolute Poker and Ultimate Bet assets “ have begun to deteriorate in value” since the company closed its gaming operations in 2011.  These assets include brands, trademarks, domain names, customer lists, and software technology.  In his opinion, it is important to act now while there is some value in the company.

This leaves questions about player funds.  The proposed settlement does not give any guidance as to what would happen with these liabilities.  Tax authorities in Norway are seeking $30 million in back taxes from a group that owns preferred stock in the company that works much like a bond.  It would seem that liability would be with the Madeira Fjord shareholders and could not be attached to Absolute Poker assets.  One major issue is that the Absolute Poker assets are likely near worthless.  The customer lists have been leaked, the brand name is tarnished from multiple cheating scandals, and the software is nowhere near the quality of competing online poker companies.

There is more hope now for players who may now actually recover some portion of their balance on Cereus.  Some estimates have been in the 10-20% range.  Any guess now would be pure speculation but all agree that this is great news for Absolute Poker and Ultimate Bet players hoping to receive some fraction of their balance.

The legal filings can be found here.