Earlier this week we summed up the first part of the Lederer Files. Now we give you on the sequel to PokerNews’ exclusive series. Here he is grilled on all things UIGEA including payment processors and segregation of funds.
✖ After the Unlawful Internet Gambling and Enforcement Act (UIGEA) was passed by the US government, Lederer said that his first reaction was “shock”. When asked why they decided to stay in the USA he said that it was a “pretty simple process”. Full Tilt Poker “sought legal opinions from very reputable attorneys” and they were convinced the law “didn’t say anything about poker”. Lederer said “all legal opinions were unanimous that UIGEA didn’t cover poker”.
✖ When pushed on the decision he said that there wasn’t any need for it to be put to a vote among members, before he added: “I’m not saying decision was unanimous but there was zero struggle. Anyone that thought it was a terrible mistake staying in the US could have said here are my shares, I’m leaving”
✖ The interviewer asked whether Full Tilt invested in any banks so they would turn a blind eye to certain transactions, which Lederer said he didn’t believe that happened and he wasn’t “aware of” Full Tilt investing money in any banks. It “could have happened” though.
✖Payment processors were people that Howard “never met with” in his entire time at Full Tilt Poker. Apart from one chance meeting at a party, he never spoke to any of them.
✖On the subject of Daniel Tzvetkoff of Instabill, Lederer has “never spoken” to him and has “no recollection of him”. He did know about the court case and on the subject of Full Tilt tipping off authorities as to Tzvetkoff’s whereabouts in the US it “might” have been the case.
✖Lederer wouldn’t “confirm or deny” whether he was CC1, as named in emails between Ray Bitar and customer service representatives. He did receive the email and it was “important” as far as he was concerned, even though “it wasn’t his area”.
✖In relation to the subject matter of the email, Lederer knew “it wasn’t the case that it [customer deposits] was held in a trust account”. He though they needed to “provide this customer a good answer to this question”. Involved in the process of answering the customer question were “mainly company counsel” and Howard “never saw a document” that answered the burning issue… “Do we have more cash in company accounts than we have in player liability?”
✖It was around now Lederer instructed the finance department to produce such a document and that it “wasn’t the easiest” to produce.
✖Lederer doubts that Kahnawake ever asked for a “cash coverage report” and instead just wanted balance sheets.
✖Lederer called an email sent by Bitar to a customer, in which he describes the player funds being separate, as “odd” due to it being “very extensive”. Like many other things to do with FTP, Lederer has shady memories of actually seeing it.
✖It seems certain members of the board were definitely worried about the DOJ coming and busting the doors down. The interviewer mentioned that Bitar once said “customer funds will always be at risk” as the company is “not a bank”. Lederer doesn’t believe that’s what Bitar was saying and that “maybe one day the DOJ…it’s possible…that somehow the company get shut down and all the bank accounts get seized”.
✖Lederer explained that he decided he was going to retire in September 2008 in the fall of 2007 as he “felt it was time to go”. When talking about retirement he mentioned that he was “not sure” what his contract looked like or if he “even had one”.
✖Lederer, and even more so Rafe Furst, felt as though they were “handcuffed” to the board towards the end. Lederer said he “didn’t want out but would have welcomed change”
✖ “The biggest regret is that we were operating as a California LLC, we’re a Dublin company and using an operating agreement crafted for a startup. That was our inexperience and lazyness,” Lederer said
If you missed part one, you can read our summary here