Ultimate Bet was the home of the largest online poker cheating scandal in history. Travis Makar, a former employee of Russ Hamilton, released two sound files and a number of screenshots that clearly implicate Russ Hamilton, Greg Pierson and others in the cheating scandal.
A meeting took place in the Winter of 2008 to discuss how Ultimate Bet would handle their newly discovered cheating scandal. Russ Hamilton recorded the meetings to apparently cover himself and to have personal records of the discussions. The device was placed in an item carried by Hamilton. One recording starts out with Hamilton admitting that he stole $16-$18 million from players by using the “God Mode” feature created by Iovation. It has been suggested by other sources that the fraud was more than double that amount. He also disclosed that he declared $5.2 million of the stolen money on his taxes.
The God Mode account names were Auditmonster1 and Auditmonster2. This feature allowed the user to play for real money at Ultimate Bet on one computer while being logged in as an observer at the same table on a different computer. The observing God Mode account, allegedly created as an auditing tool, could see all hole cards at the table in real time.
Ultimate Bet Management Debates How to Get Out of Paying Players
After clear admissions by Hamilton about his involvement in the cheating there are several discussions on how the company should go about handling the scandal. It was clear from this discussion that the cheating was well known throughout the upper management of Ultimate Bet and Absolute Poker. The names mentioned that had knowledge or involvement in the cheating include:
- Greg Pierson, founder and CEO of Ultimate Bet and Iovation
- Dan Friedberg, former Ultimate Bet counsel
- Jim Ryan, former CEO of Ultimate Bet and Party Gaming
- Joe Norton, head of Tokwiro Enterprises which owned Absolute Poker and had recently acquired Ultimate Bet
- Paul Leggett, who managed Cereus until Black Friday and is now head of the online division at Amaya Gaming
It seems clear from the recording that all of these parties were aware of the Ultimate Bet cheating scandal, though some were alerted after the fact.
Well Known Players Lose Hundreds of Thousands of Dollars
A number of players that were victims were named and their losses to Hamilton are identified. Prahlad Friedman, an Ultimate Bet pro at the time, was included in this list. He lost $360,000 to the fraud. A number of other players lost well over $100,000. The list of names is described as “a who’s who of poker” and that “frankly it’s just a tragedy” that these well known players were victims. Friedberg then describes the incident as “one of the biggest thefts ever”.
The most well known player mentioned might be Ben Affleck The actor was coached by Ultimate Bet pro Annie Duke. Iovation provided software that allowed Hamilton and others to receive an alert when Affleck and other weak players were seated at a high limit table. Affleck lost substantial amounts of money to Hamilton and others on the site. Affleck reportedly had a -$500,000 balance from losses that were never paid. Hamilton admits to stealing this money.
More Discussion About Reneging on Payments
The discussion moves back to how Ultimate Bet is going to try and cover up the thefts. One suggestion is that the company “might have to come up with a lie and say it was a consultant” but that would require naming Hamilton as a victim as well, something that clearly will not fly. The group wants to keep their liability around $5 million. Hamilton insists that everyone share the burden of repaying players, not just the current operator. He receives no support on this opinion.
The discussion continues:
Is the business willing to look for any reasonable way to limit this? Absolutely!
It’s not saying we will take the ultra high road, it’s not saying we will not do anything, it’s something in between. They are interested in coming up with items to minimize it.
The meeting continues to go over how Ultimate Bet can get out of paying players back in full. One idea is to trash Ultimate Bet to preserve the Absolute Poker brand name. The problem with this logic is that Absolute Poker already had its own cheating scandal blown wide open just months earlier. That brand was already tarnished.
Pierson and Friedberg discuss several times how Scott Tom, one of the Absolute Poker leaders named in the previous cheating scandal, is no longer with the company. This turned out to be false as he was named in the Black Friday indictment which alleged his involvement in Absolute Poker years after this meeting.
Hamilton Determines Which Players Are Repaid
Hamilton is instructed to go down the list of players and give his opinion on which players will get a refund and he agrees. Players that had stopped playing at Ultimate Bet, those that Hamilton felt owed him money, and even people he does not appear to like are all players that will potentially receive nothing. He makes it clear during this process that he is not paying these players back out of his pocket.
One player that Hamilton goes into a lengthy discussion about is Freddie Deeb. Hamilton does not feel Deeb deserves any refund because Hamilton chip dumped to him repeatedly and claimed he had already given Deeb enough chips in that manner. He goes on to say that he sponsored Deeb and other players to play in live poker tournaments. He claims to have helped seed prop player accounts as well. Hamilton declares that his theft can be justified because it was done in the name of marketing.
Hamilton implies that management knew of his thefts as they occurred. Other evidence suggests that upper management signed off on large cashouts and player to player transfers with no investigation. Support members were instructed to whitelist a number of accounts for fast transfers and cashouts. Some of the stolen funds appear to have stayed within the company and posted as a profit on the books. Greg Pierson never disputes any of this information disclosed by Hamilton.
Phil Hellmuth Mentioned
Phil Hellmuth was also mentioned, but not as being involved as a cheater. A voice that could be Friedberg’s describes that Hellmuth is the worst person to be involved in this. He was the player that fraud victims contacted first. The group agrees that Hellmuth will be mostly left out in the dark on the cheating scandal. This is done to protect Hellmuth and out of concerns about how he may handle it if he knew the full story.
Annie Duke Mentioned
Annie Duke was also mentioned. She was apparently aware of the God Mode accounts, though it seems as though she may have not used them in the same cheating manner as it was on a 15 minute delay when she had access. This could still have given her an advantage by seeing the range of hands her opponents played that would not otherwise be available in hand histories.
Iovation Not Licensed in Nevada
All of this information further proves the point that Iovation has no business in the legal Nevada online poker market. Greg Pierson, a person clearly implicated in the recordings, is the founder and CEO of Iovation. Russ Hamilton was a shareholder that was stripped of his equity in the company when the cheating scandal surfaced. It is hard for anyone to justify the company’s involvement in the regulated US online poker market.
Iovation is not licensed to offer gaming services in Nevada but they do provide player verification for Ultimate Poker. They are contracted by Verifi’s subsidiary CAMS.
It was difficult to make out some of the discussion and which member of the meeting was speaking at times. The device was held by Hamilton and others were not always clear. This created situations where it was difficult to place the quote with the correct person.
An index of all of today’s released files may be found here.