Former SunFirst Bank compliance officer claims she caused Black Friday

TAGs: Black Friday, Department of Justice, Jeremy Johnson, SunFirst Bank

sunfirst-bank-officer-black-fridayDoes the online poker world owe Daniel Tzvetkoff an apology? In a surprise development, a former compliance officer at Utah’s SunFirst Bank has claimed responsibility for the havoc inflicted on the online poker industry on Black Friday. On Monday, Cathy Scharf told attendees at the Association of Certified Anti-Money Laundering Specialists conference in Las Vegas that it was she who’d informed federal authorities that SunFirst was processing transactions for US-facing online poker companies.

Scharf said she’d taken the job with SunFirst after leaving Las Vegas during last decade’s financial recession. Associated Press reporter Hannah Dreier quoted Scharf saying her new bosses told her about their online poker activities during her first week on the job. They also told her the bank wouldn’t survive without the $400k in fees their poker processing was earning them each month.

Scharf claimed to be aghast at this knowledge, but said the bank’s lawyers threatened to have her arrested if she snitched on them. (Scharf failed to specify precisely what charges the bank intended to bring against her for blowing the whistle on their illegal activity, so we’ll just guess and say ‘grand theft irony.’) Undeterred, Scharf hired her own attorneys, contacted the feds, yada yada yada, SunFirst vice-chairman John Campos goes to prison and US players are forced to play on Lock Poker.

But the story may not end there. Scharf told attendees that there were likely other US banks still actively engaged in similar activities and suggested anyone who found themselves in a situation similar to hers would be wise to blow that whistle. “You just have a huge burden lifted from you once you can tell your story.”

Speaking of things being lifted, the US Department of Justice and the Federal Trade Commission have finally reached agreement on how to split a total of $13.6m they’d seized from SunFirst’s still steaming corpse. The documents detailing the forfeiture were first uncovered by poker blogger Haley Hintze, and indicate that the FTC’s share is primarily due to its investigation into fraudulent telemarketing activities by former SunFirst investor Jeremy Johnson. But the DOJ’s share – amounting to $6.8m – is pure poker money, the latest in a long line of gambling-related asset forfeitures on which US law enforcement agencies have come to depend to fund their everyday activities.

Viewed through that filter, Scharf’s suggestion that other banks were still engaging in illegal poker payment processing takes on a whole new light. Suddenly, her dramatic testimony appears less like an indefatigable whistleblower detailing her steadfastness in the face of danger and more like a preview of her new get-rich-quick seminar, which details how to fink on online gambling enablers for fun and profit.

One can almost imagine legions of local sheriffs in the audience, furiously scribbling notes into the three-ring binders they pilfered from their station’s office supplies for the occasion. Then these Barney Fifes would eagerly line up to pay (with public funds) to attend Scharf’s more detailed three-day retreat, at which one will learn such advanced techniques as ‘How to Pronounce Scheinberg” and “Ask Yourself Why Anyone Would Need That Many Golf Balls?” Seating is limited, so be sure to act now.


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