Everleaf Gaming Exec Arrested in Malta

Swedish “key official” of company released on bail but ordered to remain on the Mediterranean island, an international online-gambling business hub.

Malta’s Lotteries & Gaming Authority (LGA) has issued a press release announcing the arrest of Swedish online-gambling executive Michael Zwi Oros on charges related to the collapse of online-gambling company Everleaf Gaming. Zwi Oros, 33, was released on €10,000 bail (plus an additional €10,000 personal guarantee) and was ordered to remain in Malta pending the resolution of the case.

Zwi Oros, a Stockholm native, was listed as the Gaming Director of both Everleaf Gaming Ltd. and sister firm Gold Man Gaming Ltd., is alleged to have misappropriated nearly €800,000 in an ongoing process that ran for months or years and ended in about July of 2013, when Everleaf’s license was finally revoked by the LGA.

The LGA presser (below) also stated that a parallel investigation into another former Everleaf official, Jean Pavili, is ongoing.

According to reports in local Malta outlets, Zwi Oros pled not guilty to the misappropriation charge but pled guilty to a host of related charges.  Per the Times of Malta, Zwi Oros pled guilty to: failing to pay his gaming license and tax; failing to notify the Lotteries and Gaming Authority of the relocation of the company’s control system; and failing to deposit winnings and failing to disclose all ultimate beneficiaries to ensure propriety according to Maltese gaming law.

Statements made by the LGA to the Maltese news outlets reporting on the case credit cheated former players of the company with bringing attention to the matter to regulators.  However, in a noted example of home-team reporting, the island-based stories make no mention of the LGA’s long-lasting reticence towards those same affected players, before finally being forced to make a statement of some form after continuing international consumer pressure.  That pressure even included a player protest made in front of an LGA-sponsored informational booth at a European gaming conference.

UIGEA Seizure Started Tumbling of Everleaf’s House of Cards

A small United States-based seizure of Everleaf-connected funds being used for paying withdrawals of American players was seized in July of 2011, from a small Liechtenstein-based payment processor called Causash Establishment.  Causash and Everleaf appear to have ended up on the radar of United States enforcement officials as an offshoot of state and federal investigations that resulted in 2011’s “Black Friday” indictments against the four largest US-facing poker sites, even though other, smaller operations such as Everleaf continued to serve American players.

The Causash seizure amounted to 27,465.93 and additional smaller seizures may have occurred as well, and Everleaf’s response was to leave the US market in February of 2012.  However, and in a telling indication of the company’s ethics, Everleaf announced that it would send withdrawals only to a select few non-US-based payment processors for those Americans seeking to withdraw their funds.

At that point, most US players couldn’t even sign up for new accounts at the processors named for Everleaf, which was the company’s intent: Stung by the seizures — and apparently also left operationally cash-strapped by the internal misappropriation of funds — the company had no way to pay the US players’ balances.  This abdication of financial responsibility indicated the likely implosion of the company, even though it took another year or so for the company to formally collapse.  After all, most of Everleaf’s pre-202 players had been Americans, and after the company’s blatant February 2012 ending of service to the US, few other players were left to deposit.

Misappropriation of Funds Cited in Complaint

According to another local story, this time from Malta Today, “sources” familiar with Everleaf’s internal operations testified that thousands of Everleaf accounts were affected and included not only former American players, but Maltese and other European players as well.  According to that report, “… whenever clients of Everleaf Gaming Limited tried to withdraw funds or winnings from their account, they were not allowed, allegedly because the company [was] ‘refusing them to allow to cash their winnings.'”

The Malta Today report continues by stating, “The case was brought to light in October 2013, when a foreign online gamer filed a judicial protest against [Everleaf], alleging that the company refused to allow to cash in his winnings. The plaintiff – ‘a professional poker player’ – had also said that the Lotteries and Gaming Authority (LGA) did not heed his calls for help.”

“Subsequently,” the story continues, “the LGA suspended the licence of the accused and of Everleaf Gaming Limited and the police were called in to investigate.”

But is that all there is to the story?  Or did the Malta LGA finally acknowledge international pressure that called into question the regulatory agency’s very competency as a licensing agency and jurisdiction?

The LGA’s Previous Diasvowing of News Stories, Player Reports

The LGA press release (bottom) and local Malta news reports appear to be a rather blatant rewriting of history, given the LGA’s demonstrated reticence in handling complaints regarding Everleaf in the past.  Numerous poker-media reports and forum threads discussing the Everleaf implosion were available over the span of at least two years, yet the LGE issued a public statement in 2013 claiming that the reports were false, and were likely generated by jilted affiliate partners of Everleaf.

“A number of complaints that were also being indicated to the media,” asserted the LGA, “were complaints stemming from non-genuine players. The non-genuine complaints were also investigated, where it transpired that such complaints were coming from affiliates disguising themselves as players.”  The LGA also asserted once that a “great majority” of players who had been cheated by Everleaf had actually been paid, a claim which now seems not to have been the case at all.

The LGA finally got around to suspending Everleaf’s gaming license in August of 2013, but by that point, all gambling action on the site had already ceased, and whatever funds had allegedly been misappropriated were long, long gone from their proper ring-fenced accounts.  At that point the LGA even stopped addressing proper player complaints… at least in terms of actually responding to the players themselves.

A Threatened Player Protest and Hints of Insider Theft

If there’s any impetus to the sudden turnabout by the LGA — regardless of the actual charges filed against Swedish gaming exec Zwi Oros — it was the threat of a public protest that attempted to shame the LGA into doing its job.

Two Plus Two forum poster “sepholdem”, a former player at Everleaf who is believed to still be owed thousands in unpaid funds, threatened to organize a public protest in front of the LGA’s planned booth at the London, England ICE Totally Gaming event scheduled for February of 2015.  Sepholdem’s threatened protest, combined with the continuing efforts of dozens of other players who have taken their complaints away from the LGA and to other Maltese government officials, drew media attention and likely contributed to the renewed investigation and the charges against Zwi Oros (and possibly other Everleaf executives).

It remains to be seen what will come of the Zwi Oros case and the ongoing investigation.  One of the recent reports, from a Finnish poker outlet, asserts that the LGA is in possession of documentation showing repeated system-generated, internal cash transfers against the account of a Finnish pro that were not initiated by the player.  In total, that unnamed player was able to document the mysterious disappearance of €56,300 from his Everleaf account, including €10,000 in five, matching individual transfers to another account which occurred in August of 2012.

Whether or not players still owed money from the Everleaf collapse remains to be seen, though Malta officials claim to be trying to recapture some of the allegedly misappropriated funds.  The latest LGA presser:

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Everleaf Company Director Charged with Misappropriation of Players’ Funds

Following months of intensive investigations by the Malta Police Economic Crimes Unit and the Lotteries & Gaming Authority (LGA) Malta, Michael Zwi Oros, one of the directors and also the Key Official of remote gaming company Everleaf, was arrested and yesterday appeared before Magistrate Doreen Clarke charged with misappropriation of players’ funds. He was also charged for not paying outstanding gaming taxes and licence fees.

Michael Zwi Oros was granted bail and ordered to pay €10,000 deposit. He cannot leave the island and he has to sign in at the St. Julian’s Police Station every day. This criminal investigation is still ongoing regarding Mr. Jean Pavili another director of Everleaf.

Joseph Cuschieri, Executive Chairman of the LGA in a statement to the media said that after months of investigations, the Malta Police have now managed to arrest one of the two directors of Everleaf and is committed to continue with its efforts in bringing to justice the other director who were ultimately responsible for the operations of Everleaf. Our key objective is to recover the funds owed to the players. We are committed to ensure that player funds are protected at all times and to this effect, the LGA will be taking concrete measures to strengthen its player protection mechanisms well beyond the benchmarks in Europe and other jurisdictions said Mr. Cuschieri.

The Maltese & lotteries Gaming Authority (LGA) [SIC] suspended the gaming licenses held by Everleaf Gaming Limited with effect from July 26, 2013. Everleaf was ordered not to register new players, take any new deposits, and not to offer any games falling under LGA license.

Everleaf pulled out of the US market in February 2012 following the seizure of $27k from a payment processor.