Online Poker Informant Daniel Tzvetkoff May Escape Jail

Online poker songbird Daniel Tzvetkoff back in his Intabill days, before he was arrested and made a deal with the authorities that led to the Black Friday indictments. (Image: calvinayre.com)

Despite once facing the threat of 76 years in jail for fraud, money-laundering and the illegal possession of over $1 billion, Daniel Tzvetkoff, the Australian former businessman and playboy whose testimony brought down three of the world’s biggest online poker sites, will probably avoid jail, his lawyer has said.

Tzvetkoff, who is due to be sentenced this week by a New York judge, is expected to receive a lenient sentence, due to his co-operation with the FBI – in 2010 and 2011 he handed over 90,000 documents that allowed the Department of Justice to build a prosecution case against Full Tilt, PokerStars and Absolute Poker and effectively shut down online poker in the United States.

While a probation report recommends a sentence of between six and 12 months of  jail time, Tzvetkoff ‘s lawyer, Robert Goldstein, said his client would probably be sentenced to the four months he has already served in prison.

“For a first-time offender who has never before experienced prison, four-plus months inside the Metropolitan Detention Center in Brooklyn constitutes a harsh and significant punishment,’’ Goldstein wrote in his sentencing submission. “The reality is that even one day in those type of conditions can be exceedingly harsh punishment for a first-time offender like Mr Tzvetkoff.”

Alligator Blood

Tzvetkoff, whose story is the subject of a book, Alligator Blood, by James Leighton, and may soon be turned into a movie, was born in Queensland, Australia. A precocious entrepreneur and computer whiz kid, he launched his own design business at 13, and at aged 16 wrote the coding for a processing payments system in his bedroom. At 20, he formed the payment processing company Intabill with a US attorney called Sam Sciacca.

Intabill really took off in 2006, following the passage of the Unlawful Internet Gambling Enforcement Act (UIGEA) which made it illegal for financial institutions to process gambling transactions for American customers. Intabill contrived to sign a deal with FullTilt, PokerStars and AbsolutePoker and suddenly a vast flow of money was passing through his hands.

He was now a 25-year-old multimillionaire and wholeheartedly embraced the rock-and-roll lifestyle, splashing out on Lamborghinis, mansions and a private jet. Soon, though, as his spending habits spiraled out of control, Tzvetkoff’s life would begin to unravel.

Hubris and Nemesis

The attention of the authorities forced Tzvetkoff to launder money through a series of other businesses, and this lead to a disastrous investment in a payday loans business. Soon, when the poker companies came looking for their money, Tzvetkoff couldn’t pay. He had been siphoning money from Intabill, and in 2009, the company collapsed completely, having owed $143 million to creditors around the world.

In 2010, Tzvetkoff made an ill-advised trip to Las Vegas, where he was promptly arrested and charged with money-laundering, bank fraud and conspiracy. It was then that he made the deal with the authorities that would ultimately bring online poker to its knees.

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