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Old 10-13-2012, 12:29 PM   #241
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Re: Diamond Flush Articles: The Distortion of Truth from the Lederer Files

Wow. I guess she really isn't going to say much of any substance till part 7. She really is killing any buzz she had about these articles by going about it this way.
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Old 10-13-2012, 12:40 PM   #242
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Is there any reason that these articles couldn't be written by anyone who followed the interviews in a fraction of the time?
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Old 10-13-2012, 12:44 PM   #243
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In before 'I don't know. You're asking me to speculate.'
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Old 10-13-2012, 12:51 PM   #244
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Re: Diamond Flush Articles: The Distortion of Truth from the Lederer Files

There is part of DF's Part V that I have some trouble with.

Quote:
A reasonable person could assume that the U.S.A.O., before granting such permission, would have taken steps to have some assurance that rest of world play would be operating properly, fully funded and in compliance with their licensing regulations.
I don't agree with this assertion. The text of the Domain Name Agreement, which was made public almost immediately on signing, contains elements which led me to assume that the USAO had no idea whether ROW play was operating fully funded. Even in the absence of the text of the Agreement, I don't think a reasonable person would assume that the DoJ would bother itself about the liquidity of operations outside the US. If, susbsequent to the agreement, the DoJ didn't know FTP's financial situation and FTP went on to defraud ROW players, it wouldn't make the DoJ complicit.

Quote:
Because SDNY clearly had been aware of possible monetary issues prior to Black Friday, (they had undercover players utilizing the site and also were aware of various poker forum postings in which deposit and withdrawal issues have been memorialized, not only for U.S. customers, but also international ones), they would have likely reached out to Full Tilt prior to executing the agreement for that assurance, as not doing so could have made the D.O.J. complicit in perpetrating the fraud against the players that they later charged against individuals at the company.
I would be interested to know if there is anything besides speculation behind this paragraph. My thought is that if the DoJ wanted such assurance in advance, they would have made obtaining it an explicit part of the Domain Name Agreement. Instead the Agreement provides for indirect acccess to financial information at some point after the signing of the agreement. I have always interpreted the DoJ's various documents to indicate that they had no idea that FTP was so short of funds until after the Agreement was signed. Sure, they had reason to be aware of some hiccups with deposits and withdrawls, but so did attentive 2+2 readers. The DoJ had no more idea than we did that FTP were so far in the hole.

DF seems to be trying to build a case that FTP actively misled the DoJ prior to the signing of the Domain Name Agreement wrt their financial status. We know they gave false reprts to the AGCC for months if not years. However, without direct evidence, I think all we can conclude about what information the FTP gave the DoJ before the Domain Name Agreement is that it failed to provide a true picture of the situation, not that it actively painted a false picture. Of course, there is always the possiblity that DF has some evidence to back what seems now to be speculation.
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Old 10-13-2012, 12:59 PM   #245
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Re: Diamond Flush Articles: The Distortion of Truth from the Lederer Files

Taken from part V

Quote:
Lederer, very quickly and with no hesitation, answers:

“Yeah, it was definitely the 21st of April. We– I mean I wasn’t thrilled on the on the 20th, I’m starting to get some information, just haven’t put it all together yet, I’m worried on the 20th. It doesn’t look good on the 20th, but the 21st is the day that the final report, we were able to put it all together and kind of just put a number, and again, it’s not an exact number, but it’s a horrific number, it doesn’t matter if it’s exact, and probably that number in terms of the difference between what was owed to the players and cash on hand was about $ 250 million, I believe, at that time”.

Parvis, “when you first see that number, are your thinking, okay clearly this is a mistake, or are you fairly confident now that through this process…”

Lederer interrupts by saying “We were really thorough, we had to– no, I never thought it was a mistake”.

He goes on to explain that he and Chris were surprised only by the fact that only $ 10 million of the backlog money was still sitting in the players accounts that could be deducted to further reduce the backlog effect. “I must admit I was floored by that number“.

Therefore, by Lederer’s own admission, the shortfall report, including the backlog, was not surprising, only the fact that they could not reduce their liability based on those numbers, by more than $ 10 million.
Lederer saying he never thought the shortfall report was a mistake due to how thorough they had to be when compiling it does not equal "by his own admission it wasn't surprising" and for DF to make that leap is pretty shoddy journalism and seriously impacts negatively on her credibility imo.
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Old 10-13-2012, 01:00 PM   #246
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Re: Diamond Flush Articles: The Distortion of Truth from the Lederer Files

The first really clear proof that Lederer lied in the interviews (at least, the first I've seen) appears in pt5.

Spoiler:
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Old 10-13-2012, 03:12 PM   #247
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Re: Diamond Flush Articles: The Distortion of Truth from the Lederer Files

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Originally Posted by deemikey View Post
I think this is the key point. Howard seems to feel that he and the other owners have paid for their errors by losing the company and their cash cow, and now that PS got the company and will be paying people back, everything should be forgiven and forgotten.

In some twisted way he's right, but as someone posted earlier, at the very least he should wait till everyone has their money again. And of course, there's no way to compensate everyone for the damage that has been done to the game and the players.
That's exactly the "feeling" I got from the 2p2 interview. HL feels like the assets of the company they built paid the tab and so they should be off the hook for the "distributions in error" paid out after they were insolvent.

Is that the case?...no...not really. I mean the company did still have alot of value, but that doesn't excuse skimming 150 million off the top (the approximate amount of "distributions in error" after they were operating in the red.) This also doesn't account for the fact that at the very least, interest on this money should be paid. US Players are without their money for 18 months and get no interest?

The DOJ doesn't see it that way, and any assets HL didn't manage to hide are going to go away most likely.

Here is what I think happened:

Bitar is running the show on his own for the most part in Dublin.
Seizures of funds from illegal cc processing start to happen.
Can't find any processors to run echecks...phantom deposits happen.
A huge hole develops starting at about $100m and ending up at $250m when black friday and more seizures happen.

This is where the story gets murky for me.

Did HL know about the financial situation the whole time? Was he in on the cover up?...or did Bitar decide at some point just to try to keep things looking like "business as usual" by continuing to pay out distributions while trying to find ways to process echecks and get things back on track.

My sense is that Bitar was "the guy on the ground in Dublin" and he was just scrambling to keep up appearances so that nobody flew in or called and asked too many questions until he could fix it...then black friday hit and everything blew up in their face.

Hellifiknow....I wish there were concrete evidence one could point to that HL and CF knew about the financial status before HL says they did.

The next huge blunder was continuing to take ROW deposits and encouraging them to continue playing on the site....obviously they were buried financially at that point and had the bright idea to use rake from ROW players to start to fill the void. Bad plan.

Just compounding stupid mistakes on on top of the other to try and dig out of the mess until it was obvious it wasn't gonna happen.

The disturbing thing to me is that at no point did they take action legal or otherwise to get back the "distributions in error" covering the 15 months that they were operating in the red (I believe there was direct language in their operating agreement that dealt with this). CF was the only one AFAIK to put money back in to the tune of 12m. HL kinda sloughed the question off multiple times in the 2p2 interview...more or less saying "Nobody else was giving back the money so I didn't either"
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Old 10-13-2012, 04:09 PM   #248
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Re: Diamond Flush Articles: The Distortion of Truth from the Lederer Files

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Originally Posted by LostOstrich View Post
The first really clear proof that Lederer lied in the interviews
With full credit to DF for correctly and clearly citing the source of this image, this proof comes from an article I wrote published ~2 weeks ago.
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Old 10-13-2012, 04:26 PM   #249
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Re: Diamond Flush Articles: The Distortion of Truth from the Lederer Files

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Originally Posted by LostOstrich View Post
The first really clear proof that Lederer lied in the interviews (at least, the first I've seen) appears in pt5.
I tend to doubt he was really lying at that point. It was such an easy thing to disprove, it seems like he may have simply been mistaken.
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Old 10-13-2012, 04:37 PM   #250
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Re: Diamond Flush Articles: The Distortion of Truth from the Lederer Files

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Originally Posted by Hood View Post
With full credit to DF for correctly and clearly citing the source of this image, this proof comes from an article I wrote published ~2 weeks ago.
yeah sorry, I ought to have been clearer/cited your article myself. What I meant was it's the first time in this series that I've seen such clear evidence.
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Old 10-13-2012, 05:15 PM   #251
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Re: Diamond Flush Articles: The Distortion of Truth from the Lederer Files

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Originally Posted by mrwalken View Post
I tend to doubt he was really lying at that point. It was such an easy thing to disprove, it seems like he may have simply been mistaken.
Problem is it's clearly contradictory. He says that all wording post April 21 was fully cleared by them and the lawyers.

It's not just catching him out on some technical wording; it's the idea that never after BF did they mislead players. If you read the linked article, there are cases time and time again that players were lead to believe it was "business as usual" and "operating as normal" and there was no risk to player funds, when this was known to be not true.

One of the first things HL did when he got back to Dublin was to give bonuses to players--some of the most generous to players in a long time--to try and stop a bankrun and encourage people to deposit and play.

This along with the wording shows a clear and calculated plan to mislead ROW players.

And all this was done in the name of purportedly maintaining the value of their asset; something that in hindsight was clearly unwarranted (multiple suitors ~6 months after alderney pulled the plug). It's entirely unjustifiable to maintain value of an asset by lying to people to get them to play, deposit and not withdraw. HL knows this, hence the smokescreen of pretending they never said words like "safe and secure".

To maintain this charade, in full knowledge HL and pals launched fresh player bonuses, and cleared language that misled players. People kept 5- and 6-figure balances post BF because they believed what they read on the website (safe and secure), what FTPdoug was posting on 2+2 (business as usual, no risk to player funds).
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Old 10-13-2012, 05:34 PM   #252
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Re: Diamond Flush Articles: The Distortion of Truth from the Lederer Files

I agree with others that Part V did not deliver anything that jumped out at me. I agree with DTM that I doubt the DOJ would ensure liquidity for ROW. I did think part 4 contained a lot of new and compelling information.

I keep reading the sentiment itt that HL has not been caught lying (or at lest not much.) Seriously?

Howard: Until April 7th/21st I thought things were financially fine....

No, Just NO.

The facts:

The company doubled revenues with no increase in profits from 2007-2009 because of processor costs exploding. (Howard says this in the 2+2 interview.)

An amount equal to about a third of all player funds was stolen or seized in 2010, yet they paid the exact same dividends.

There was no way for most US players to deposit to the site at all by the end of 2010.

I am curious, are there any posters that have followed this closely that think he did not know the company had less cash on hand than player balances owed by Jan' 11?

They hired Ray as a Patsy to run the company because they knew it was legally dicey from the very beginning. Then Howard exits the company very strategically to avoid liability. Of course he has some of the answers ready. It is not so much that Howard is lying, it is that the entire company was carefully constructed to lie. First to the govt, then its owners, then YOU.

Last edited by Just_a_guy; 10-13-2012 at 05:37 PM. Reason: 1st version said most players could not deposit. It was only most US.
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Old 10-13-2012, 06:14 PM   #253
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Re: Diamond Flush Articles: The Distortion of Truth from the Lederer Files

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Originally Posted by Just_a_guy View Post
They hired Ray as a Patsy to run the company because they knew it was legally dicey from the very beginning. Then Howard exits the company very strategically to avoid liability. Of course he has some of the answers ready. It is not so much that Howard is lying, it is that the entire company was carefully constructed to lie. First to the govt, then its owners, then YOU.
Yes. Well put. Haralabob's account of meeting Ray would fit well with your assertion.
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Old 10-13-2012, 06:37 PM   #254
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Re: Diamond Flush Articles: The Distortion of Truth from the Lederer Files

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Originally Posted by almostsmartenough View Post
Yes. Well put. Haralabob's account of meeting Ray would fit well with your assertion.
Exactly. Howard's own words and actions also match. To wit...

1.) He describes Ray as enthusiastic and serving a purpose, but really nothing else positive.
2.) He says they can't get any outside help for the company because of legal risks as a US facing company.
3.) Ray's name is on every single legal doc the company has (which Howard compiles to convince Andy B's group not to take over.)
4.) The company clearly had no succession plan despite a member revolt.
5.) His and Chris's control was such that no one would even be on the board with them.

Oh yea, and then there is the fact that Howard has a felony record for bookmaking related charges already. I am boggled that he can seemingly stroll without concern in to a Vegas casino when most of his counterparts in the game will never touch US soil again.

Last edited by Just_a_guy; 10-13-2012 at 06:39 PM. Reason: Described Howard's confirmed criminal past inacurately.
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Old 10-13-2012, 07:00 PM   #255
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Re: Diamond Flush Articles: The Distortion of Truth from the Lederer Files

Bleh, lowest-content installment yet; more or less devoid of any new info. Just reads like a "DF's Thoughts on The Lederer Files" book report.

I've been willing to give her the benefit of the doubt, taking her at her word that every installment is building to...well, some cohesive and novel take-away. But when does it start to come together? Feels a bit like the last season of Lost, with the remaining episodes ticking away, and thinking "wtf, nothing's really coming together here...how the F are they going to wrap this up in just 3 more ep's?"...and sure enough: weird, unsatisfying finale.
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