The Kahnawake Gaming Commission (KGC) has released its initial findings in the UltimateBet scandal. There are some jaw-dropping facts in the statement, like the $6.1 million figure that the KGC states has been reimbursed to cheated UB players, which does not include more reimbursements that are to commence on November 3rd. And Russ Hamilton is officially named as the main person responsible for and said to have benefited from the UB scandal.

Interesting to note that the KGC chose to release this statement as the Aruba Poker Classic gets underway…

(Thanks to Kevin Mathers for the heads-up, and MajorWager.com for being the first website to have reprinted the statement in full.)

The entire statement is as follows:

Kahnawa:ke Gaming Commission Imposes Sanctions on Ultimate Bet with Regard to Cheating Incidents

For immediate release

(MOHAWK TERRITORY OF KAHNAWAKE - September 29, 2008) Kahnawa:ke Gaming Commission (”KGC”) Chairman Dean Montour today announced the initial findings of the audit conducted on licensee Ultimate Bet, as well as the sanctions to be imposed.

According to KGC Chairman Montour, the Commission has reviewed the information provided to it over the past months from Frank Catania of Catania Gaming Consultants of New Jersey; Gaming Associates, an Australian game testing company; and the permit holder. Chairman Montour said, “The Commissioners have made several findings of fact with regard to the cheating that occurred on the Ultimate Bet web site that included the identification of some of the individuals responsible for these incidents as well other significant violations of the Kahnawa:ke Interactive Gaming Regulations.”

The Commission found clear and convincing evidence to support the conclusion that between the approximate dates of May 2004 to January 2008, Russell Hamilton, an individual associated with Ultimate Bet’s affiliate program, was the main person responsible for and benefiting from the multiple cheating incidents. Furthermore, the KGC is currently in contact with the appropriate law enforcement agencies and intends to fully cooperate in the prosecution of all individuals involved in the UB cheating incidents.

Mr. Catania states, “My intention is to provide further information as it is uncovered, although the information already submitted to the KGC relating to Ultimate Bet warrants the KGC taking the actions it has today. Any further evidence uncovered with regard to cheating, withholding or destroying records in our continuing investigation will be reported to the KGC and the proper agency for appropriate action.”

As a result of the KGC’s findings of fact, the Commission called a special meeting, at which time it was unanimously decided to impose the following sanctions against Ultimate Bet:

1. Ultimate Bet is directed that by November 3, 2008 it shall, under the close supervision of the KGC, its employees and agents, commence refunding all players accounts found to have been adversely affected by the cheating of individuals under the control and supervision of the licensee. It is estimated that Ultimate Bet has to date reimbursed $6.1 million USD to players’ accounts found to have been adversely impacted by the cheating activity

2. Ultimate Bet is directed that by November 3, 2008 it is to remove any and all persons deemed as “unsuitable” by the KGC from all involvement with the company, which shall include all levels of ownership, management and operation. Ultimate Bet during that time period until November 3, 2008 is required to continue to provide complete details of all day-to-day operations of the company. These shall include financial as well as daily gaming records to Frank Catania and or his assigns. It is anticipated that this action will provide full disclosure and prevent any further improprieties or wrongdoing from occurring while ensuring that the public is being offered fair and honest games and all player monies will be protected.

3. Ultimate Bet’s control system as defined in section 9 of the Kahnawa:ke Interactive Gaming Regulations has been modified to prevent any further incidents of cheating or related improprieties.

4. Ultimate Bet will not delete or modify any logs including but not limited to web logs and game logs as required by the Kahnawa:ke Interactive Gaming Regulations and will continue to have those logs immediately available for inspection by the KGC or its agents.

5. Ultimate Bet shall immediately pay a fine of $1.5 Million USD to the KGC for its failure to implement and enforce measures to prohibit and detect fraudulent activities.

6. Ultimate Bet’s failure to comply fully with these measures will result in the immediate revocation of its KGC gaming permit.

For those that have forgotten, an article today on msnbc.com brings up the scandal yet again. Mike Brunker ties in a $80m (Canadian) claim against the former owner of UB –Excapsa Software Inc. of Toronto by Blast-Off Ltd. of Malta (the current UB owner).

It goes over the details of the two scandals, including mentions of NioNio, Russ Hamilton’s alleged involvement, 2+2 posters help in breaking the scandal, among other items, definitely worth reading.

As noted in the original post, I recently interviewed Tokwiro Enterprises Chief Operating Officer Paul Leggett about a number of issues the recent UltimateBet and Absolute Poker scandals.

The interview transcript has been broken up into three parts and posted on PokerWorks. Part 1 focuses on Tokwiro’s purchase of AP and UB, and how any inkling of impropriety could be missed in the due diligence phase.

Part 2 delves deeper into the investigations – the internal UB one concluded by Tokwiro itself, the ongoing UB investigation by Gaming Associates, and the “surprise” assignment of Frank Catania to audit Tokwiro as a company. Leggett also discusses the reasons for the reimbursement process lag time, whether or not Russ Hamilton was involved in the cheating, and the roles of Phil Hellmuth and Annie Duke in it all.

In Part 3 I gave Leggett a chance to discuss what has been done at UB to rectify the problem and improve security going forward, and why customers should have confidence in UB and AP.

I feel that Leggett was as forthcoming as he was allowed to be, considering the restrictions inherent in the pursuit of legal action. He helped dispel some myths and rumors, though his inability to discuss Hamilton’s alleged involvement or any evidence in the case keeps interested parties in limbo for awhile longer. However, he helped put somewhat of a timeline on information he hopes will be released to the public, and he provided some details about how Tokwiro has tried to overcome the scandals, close security gaps, and regain the trust of the poker public.

Some might say that I’ve been a raving lunatic somewhat vocal about my frustrations with the AP and UB scandals. This is true, and thus I attempted to contact UltimateBet once again in July for answers to some of my questions. To my surprise, I was contacted by the Vice President of PR at Tokwiro Enterprises, UB’s parent company, who said she would respond to my inquiries. After two weeks of no such thing, I was on the verge of writing another rant/post here sending a polite follow-up when I received an e-mail asking if I’d like to speak with the Chief Operating Officer of Tokwiro, Paul Leggett. Ummm, yes, please.

I conducted the interview on Friday, Aug. 8, via telephone, and I must say that I was pleasantly surprised at Mr. Leggett’s willingness to answer my questions as he was able and be as honest as the corporate attorneys would allow. He has been reaching out to other media outlets lately, having done guest appearances on 2+2 and Pocket 5 podcasts, and I was happy to finally have a door opened and someone coming out to answer questions.

The full interview has been submitted to PokerWorks in a three-part series due to the length of the transcribed interview. The first article is up now, and the others will be posted in subsequent days.

Highlights of the interview included dispelling myths and rumors, speaking of the utmost confidence that the perpetrator(s) will be caught and prosecuted, and giving details about new security procedures and systems to prevent future improprieties.

A few excerpts:

In response to a question about how two companies, AP and UB, could be purchased without any knowledge of cheating going on at the highest levels:

“There definitely was due diligence done at the time of purchase… but this is a very large platform that we purchased. Unfortunately, during this due diligence process, we simply did not discover the code that was put on there…”

More…

The official announcement came on July 29, but the post has been delayed as I decided how or if to mention it.

After Tiffany Michelle’s impressive run in the 2008 WSOP main event and 17th place finish, she has been offered a sponsorship deal by UltimateBet. She is now part of the site’s roster of pros, which includes Annie Duke, Phil Hellmuth, Cliff “JohnnyBax” Josephy, and James “POKERPRO33” Campbell.

For Tiffany’s poker career, this may seem like a positive step, as she will be able to play more poker – live and online, cash games and tournaments. She will have an income regardless of her poker results, which will do well to make up for the lack of future income from PokerNews. After having previously defended her decision to wear the UB patch on PokerRoad Radio because she felt that the site treated her well during the main event, this announcement came as no surprise.

Even so, the Tiffany Michelle/UB partnership did come as a disappointment to many.
More…

UltimateBet has been dancing around this superuser/cheating scandal for more than six months. Everything was delayed - acknowledgment of the allegations, investigation updates and results, and developments like the alleged ties of Russ Hamilton to the scandal.

Annie Duke has become the spokesperson for UB, and she has had to conduct interviews and give politically correct answers to questions for months as UB has come under fire from every direction. While she is attempting to be the face of UB, as Phil Hellmuth clearly dodges the issue and avoids speaking publicly about it, the company itself is allowing Duke to do what its Public Relations Department - or ownership, for that matter - should be doing. Enough is enough.

Listening to a PokerRoad Radio episode from last week (dated 7/16/08), it became clear that Russ Hamilton will not be defending himself or issuing statements on the UB scandal or his alleged involvement in it. (The discussion of the issue begins approximately 30 minutes into the show.) Hamilton declined the opportunity to speak on the show and clear his name upon the advice of his attorney, though he invited Barry Greenstein and Joe Sebok to visit his home and discuss the issue privately. However, Hamilton’s attorney was there, too, and would not allow Hamilton to address the UB accounts supposedly connected to Hamilton. Greenstein and Sebok insisted that they were not taking sides but felt that Hamilton was genuine in his claims of innocence. Hamilton wanted people to know that when the investigation is complete, names will come out but his will not be one of them. And his attorney wanted to tell people, “Can’t you just wait a couple months?”

No. The poker community has been forced to wait long enough. It is time for answers. Not only does Hamilton need to come clean with any information he is privy to, but Annie Duke and Phil Hellmuth need to do the same. A source tells me that Duke and Hellmuth were aware that Hamilton was implicated in this scandal well before Nat Arem posted his personal investigatory findings. Russ Hamilton cannot seem to defend himself, so UB seems content to let his reputation be scarred forever - while claiming innocence from behind closed doors - while the investigation goes on…and on…and on. And UB seems to operate under the notion that no news is good news, and the less information that comes out officially, the better. Transparency seems to be a pipe dream as the story gets murkier by the day.

C’mon, UltimateBet. If there is actually a team of investigators on this issue, it shouldn’t take months to find answers. Your reputation in this industry is crumbling before your eyes, and as part of the poker community, you must step up to the plate and put your not-so-secret hole cards on the table. Show us some respect if you ever hope to get any in return.

(The opinions expressed in this post do not necessarily represent those of Pokerati. They are the sole ravings of a frustrated journalist.)

The UltimateBet Superuser scandal has taken a giant leap into the depths of criminal behavior. If anyone thought the May 29th statement was the end of it, sorry to burst your faith in integrity and good, um, faith.

Nat Arem, the rogue investigator who blew the top off the Absolute Poker scandal, has stepped in to assist with the UB investigation that never seems to end. And the most recent post on his blog, dated today, links some of the superuser accounts on UB to one of the site’s former owners, Russ Hamilton. Yep, that’s 1994 WSOP main event champion, Russ Hamilton. Supposedly, he no longer has a stake in the company, but there are conflicting reports as to his current involvement in UB business.

Here’s a brief excerpt from Arem’s blog:

But it showed that the registered address of at least some of the super user accounts belonged to Russ Hamilton, the former owner of UB.

I basically felt sick to my stomach. I talked to Russ on the phone a few times in the fall — brsavage got me in touch with him. We talked about how disgusting it was that this happened at AP. Russ expressed a strong opinion that he was going to do whatever it took to get things right and, at the time, I believed him that he was going to fight to get things at AP right. He even got me in touch with the guys at AP so I could go down there and meet with them on behalf of PokerNews and the community as a whole. This guy RAILED against the people at AP who were superusing.