UltimateBet Fraud Firm Iovation Conditionally Recommended by NGC (Pt 1)

Here’s a shocking but sadly unsurprising development from Nevada, where the state’s Gaming Control Board, part of the Nevada Gaming Commission, is on the cusp of approving long-time UltimateBet ownership firm iovation for licensure as a geolocation service provider for online gaming in Nevada.

That iovation and its ownership are being considered by Nevada officials is something that’s been in the works for several months. Last November, this investigative writer was contacted by what I would take to be a low-level official of the GCB, who was tasked with researching the controversial background of iovation, its predecessor ielogic, and the tens of millions of dollars of customer dollars that was stolen by Russ Hamilton and several other high-ranking company officials from 2003 to 2007.

The GCB employee I corresponded with was polite but not necessarily willing to go the extra mile in digging into some of the larger and deeper documentation available. Instead, he was really interested in single-page “smoking gun” evidence, as if iovation company president Greg Pierson or other top execs didn’t try to cover their tracks. Nonetheless, I sent a few choice nuggets to the GCB, which I’ll share here publicly as well.

That iovation is on the edge of approval is seen in the conditional approval recommendation for the company that appears on the agenda for tomorrow’s Nevada Gaming Commission hearing in Las Vegas. From page 6 of the online agenda:

FOR POSSIBLE ACTION:

03-02-16 N14-0457 Re: 32742-01
08-15 32743-01

IOVATION, INC.
111 SW FIFTH AVE, STE 3200
PORTLAND, OR 97204

APPLICATION FOR LICENSURE AS A SERVICE PROVIDER
(GEOLOCATION SERVICE PROVIDER ONLY)

GCB RECOMMENDS: APPROVAL, CONDITIONED:

(1) IOVATION, INC., IS LIMITED TO GEOLOCATION SERVICE PROVIDER ONLY.
(2) IOVATION, INC., MUST NOTIFY THE GCB OF ANY NEW CONTRACTS OR CHANGES TO ANY EXISTING GEOLOCATION CONTRACT WITH NEVADA GAMING LICENSEES WITHIN 30 DAYS OF EXECUTION OF ANY NEW OR AMENDED CONTRACTS.
(3) ANY CHANGE IN THE OWNERSHIP INTEREST OF THE LICENSEE MUST BE REPORTED IN WRITING TO THE GCB WITHIN 30 DAYS OF SUCH CHANGE.

(REID VOTED NO)

Now, about this latest attempt to claim to be legit.  Iovation has, literally from the outset of the discovery of the cheating on UltimateBet, tried to use the old “rogue official” defense, blaming the entire scandal on primary cheater Russ Hamilton.  Hamilton was by far the largest cheater, using much of the stolen money to enrich himself and to fund his true pet project, the Ultimate Blackjack Tour.  However, he was far from the only cheater, and by his own words to other prominent poker pros at the time, he was one of five executives of the company who used the “God Mode” cheating tool to defraud players of millions.

At least two of the other four are known without a doubt: Hamilton’s illicit business partner Mansour Matloubi, who has refused to set foot in the United States for nearly a decade due to the UB scandal, and iovation president Greg Pierson.

I sent the GCB employee the “smoking gun” e-mail that shows both Pierson and Matloubi in ongoing possession of the God Mode cheat.  It was first released in redacted form by Hamilton’s assistant Travis Makar, who sought to protect himself from being the chosen fall guy for the enterprise.  (Makar was involved in the cheating enterprise to a high degree, as Hamilton’s computer guru, though Makar did not do the actually cheating at the UB tables.

First, the redacted e-mail:

Later, likely once he perceived that the statute of limitations had expired regarding his own potentially criminal involvement in the cheating, Makar released the unredacted version:

The unredacted image came, literally, from one of Russ Hamilton’s own laptops.  Numerous other pieces of information showed the ongoing executive relationship between company president Pierson and Hamilton, who served for years as the site’s de facto poker room manager.  Both men were also among UltimateBet’s largest individual owners.  Bartleson, a minor scandal figure, was the novice programmer charged with updating the cheating version of the client so that it continued to work, on the company-dictated pretense that God Mode (actually called “Divine Bet” internally) was an ongoing security measure.

Here’s a wry, though sad, aside: Few outsiders know that Russ Hamilton is still an owner of iovation, through a shared blind trust, despite his sole-ownership bloc in ownership entity Excapsa having forfeited as part of the official cheating investigation and resolution.

But there’s a much larger problem with the way the whole God Mode cheating episode unfolded.  Neither Hamilton nor his long-time partner in crime, Matloubi, had the technical expertise nor the access to the programming side of the UB platform to create the God Mode tool, which was regularly updated by order of Pierson’s side of the business for years.  God Mode had to be have its registry keys updated with each new version of the UltimateBet client platform that was upgraded and released: It was an ongoing fraud.

I sent the Nevada Gaming Commission the transcript of a three-hour interview I did with a former key iovation/ielogic employee, detailing exactly how God Mode was created, who ordered it done, and who was responsible for its oversight, a key executive chain that included Pierson and his fellow iovation execs and  and friends Jon Karl and Daniel P. Cunningham.  Karl remains iovation’s vice president to this day, while Cunninghm was the company’s key technical executive and lead engineer, sharing in many of the company’s patents.

You’d think this stuff would be enough to show iovation and its current executive staff as ongoing bad actors, but apparently not in the eyes of Nevada Gaming execs.  I’ll share some more juicy items in Part 2 of this breaking update later today.