General Betting
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Some light reading just to keep the forum ticking over
Some light reading just to keep the forum ticking over
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After starting as a bookmaker at the Mount Vernon greyhound track in his native Glasgow, John Banks soon established himself, in the 1960s, as one of the leading racecourse bookmakers of his generation. He was flamboyant, some would say flash, but there is no telling the respect he engendered in his fellow bookmakers and the punters. He was prepared to 'stand' horses for huge amounts, and famously lost £60,000 when Persian War won the 1970 Champion Hurdle. In the same month, he might have lost nearly three times as much on the Lincoln Handicap at Doncaster, but just escaped.
In a prep race for Cheltenham, Persian War had run against Orient War, one of Banks's many horses, at Nottingham. Orient War's jockey told Banks that he could hear Persian War gurgling up the home straight, and that persuaded Banks to lay him heavily for the Champion. Banks, always outwardly magnanimous in defeat, was dining in the Queen's Hotel in Cheltenham on the evening after the Champion Hurdle, and sent over a bottle of champagne to Henry Alper, Persian War's owner who was at another table. A few days later Banks was more successful - but he had to sweat. When Prince de Galles was favourite for the Lincoln, Banks fielded against him to such an extent that he stood to lose £156,000. Lester Piggott failed by a neck to land the gamble, and Banks had one of several notable victories over Ladbrokes, and their supremo Cyril Stein, who had been among the biggest backers of Prince de Galles. Banks was extremely active off-course with 34 betting shops, which he referred to as 'money factories'. He sold them to Mecca in 1972 for a reputed £1 million. David McAllister, his right-hand man at the time, recalls some of the pioneering markets Banks established from his head office in Sauchiehall Street, Glasgow. 'He introduced handicap betting on the football and when Muhammad Ali fought Sonny Liston we stayed open through the night. He took bets on Come Dancing . In 1965, John even bet on when Goldie the eagle would be caught after he escaped from London Zoo.' Banks was the master of self-publicity. He gave out yellow badges at the races, 'John Banks is my bookie', and would travel to the track by yellow Rolls Royce, E-type Jaguar or private plane. Before his infamous 'warning off' for three years from 1978 for paying the jockey John Francome for information, Banks dominated the betting rings of the 1960s and 1970s, something that intensely annoyed Stein at Ladbrokes. Stein set out to put Banks in his place, and failed. A story told by one of Banks's racecourse employees of the time, Jim Murphy, sums up that period. As much as Stein tried, Banks was one step ahead. Stein was using another bookmaker to send money back to the course to affect the market, but Banks worked this out and decided to do something about it. At one Newcastle meeting, a Banks horse, Thika, was down to run. The night before the race, Banks instructed McAllister to ring the suspect bookie first thing in the morning. McAllister was to place a bet of £100 on Thika. If Banks was right about the bookie's links with Ladbrokes, the bookie would be sure to contact Stein to tell him about the bet. Banks was expecting Stein to put two and two together and make five. And he was right. It was the early stages of betting at the track and Ladbrokes reps were running around the ring backing Thika. One approached Banks himself, asking for £2,000 at 7-2. Banks played coy and laid 7-2 to £50. This made the rep even more certain that Banks was backing his own horse, so he asked for £2,000 at the new price of 3-1. Another £50 was laid. The price was now 5-2. Once again Stein's man went in, asking for '£5,000 to £2,000'. 'It's a bet,' said Banks. The message came for the Ladbrokes men to put more money on Thika. 'What's the price now?' one asked Banks. 'Three to one,' he replied, and turned his back to face the members' enclosure. The price started to go out to 4-1, then 5-1 and Stein's employees panicked. One of them got on the blower: 'The horse is drifting now, what should we do?' 'Of course it is drifting, Banks must have backed it at starting price. Put more money on,' was the office's response. Thika trailed in down the field. Stein and Ladbrokes had been routed. Other bookies took a pasting, too. When Banks's pilot, a former Qantas man called John Grindon, became well known around the tracks, Banks had an idea for a ruse at Thirsk. Banks asked Grindon: 'You know Mr Joyce, the bookmaker? He was with us in the plane the other day. Go and have a fiver on my horse, Stardale, with him.' Grindon was rather distinctive in the betting ring in his full pilot's uniform. Joyce fell for the ploy and sent his men round the ring backing Stardale. When Stardale ran appallingly, it was not only Joyce who was distressed. Grindon told Banks: 'I thought you knew more about this business, I lost a fiver on that.' 'But I gave you the fiver!' said Banks, who had had a good bet on the winner, at odds augmented by the bogus gamble on Stardale. When Banks returned from his enforced exile - he appealed against his ban but failed - his flamboyance and brashness had gone. He had toned down his act, kept out of the public eye and many thought he had been tamed. But he had, as one of his daughters, Sandy, puts it 'discovered life', spending more time with his family and taking up golf. After his return to the course in 1981, he may have been less noticeable, but was still razor sharp, as two members of the betting fraternity discovered on a train from London to York. A noted backer, Johnny 'Lights' Hurndall, and bookmaker John Jenkins were looking for someone to play cards and Banks volunteered. 'What are you playing?' he said. 'Kalookie,' said Lights. 'I'm not sure I know that one. How many cards do you get?' asked Banks. 'Thirteen, John. Are you in?' 'I'm in,' came the reply. By Peterborough, the game was over. Lights and Jenkins had not a penny between them, and as they arrived at the track in York, Lights was moaning to Murphy: 'I haven't got any readies, so I'm going to have to have all my bets on credit. He's a bit lucky at cards is Banko.' Murphy intimated that luck may not have played much of a part. But Banks had a problem. His clerk, the man who wrote down the bets, had not turned up. Murphy had the solution: 'Lights knows how to clerk.' So Lights ate humble pie and clerked for Banks all day. Six races, six winning races for the bookmaker. On the train home, Banks handed his substitute member of staff his wages for the day: £1,800. Lights' eyes nearly popped out of his head. Banks continued to lay frighteningly big bets. His son, Geoffrey, now a rails' bookmaker in his own right, recalls a day at the 1990 Cheltenham Festival. 'He laid an each-way bet on a 66-1 shot, New Halen, in the last race on the second day to another bookmaker, and it won. He lost £62,500 on that one bet, but you wouldn't have known it. He was quite fearless and cracked away for the rest of the meeting. He finished up winning good money. There never was a bookmaker like him for turning things in his favour.' When throat cancer took hold, Banks did not want nurses. He insisted that his wife, Anne Marie, and daughters nurse him. After all, as his daughter Joanna, speaking at his memorial service last Thursday, said: 'He was rather accustomed to getting his own way.' |
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A big step back in time
As towns sprouted in the 19th-century American West — outside Army forts, at river crossings along wagon trails, in mining districts and at railheads — some of the first structures built were recreational facilities. Recreation for the almost totally male population inevitably meant the triple-W vices of the frontier: whiskey-drinking, whoring and wagering. Saloons, brothels and gambling halls would appear almost overnight. In the early camps, the structure might be only a lantern-lit, dirt-floored tent, the bar simply a board stretched between two whiskey barrels, the prostitution facility just a cot in a wagon bed for the use of a single female strumpet, and the gambling outfit only a rickety table, a few chairs and a greasy, dog-eared deck of cards. As the towns grew and prospered, these primitive facilities were replaced by one-story wooden buildings with false fronts to make them appear even larger. And if the community developed into a city, saloons were housed in imposing brick buildings with ornate bars, huge back-bar mirrors and brilliant chandeliers. Some brothels became elegantly furnished parlor houses with attractive 'boarders' managed by madams whose names were famous throughout the West. The best-known sporting men of the West presided over and patronized gambling houses that were often the most impressive and elaborately accoutered structures of the cities. The popularity of gambling in the West can be attributed mostly to the fact that all who left the relative safety and comfort of the East to seek fame and fortune on the frontier were, in a sense, natural-born gamblers. In the early West, gambling was considered a profession, as legitimate a calling as the clergy, the law or medicine. During the 25-year period prior to the Civil War, gambling flourished in the towns along the Mississippi from New Orleans to St. Louis and was a staple attraction on virtually every riverboat. This golden age of gambling produced some of the most memorable practitioners of the art — legendary professionals like Charles Cora, J.J. Bryant, Jimmy Fitzgerald, John Powell, Charles Starr and Napoleon Bonaparte 'Poley' White. One of the popular gambling games of the 19th century was a bluffing game that evolved into American poker. Another, vingt-et-un (twenty-one), introduced into the United States through the predominately French community of New Orleans, we now call blackjack. Still another was Mexican monte. But undoubtedly the most popular gambling game in the West was faro, which drew its name from the Egyptian pharaohs depicted on the back of the cards. The foremost faro player on the Mississippi was Italian immigrant Charles Cora. After winning $85,000 and breaking several faro banks in New Orleans, Vicksburg and Natchez during one six-month period, he was banned from many resorts. J.J. Bryant, perhaps the best-known professional gambler on the lower Mississippi, lost thousands to Cora. Jimmy Fitzgerald and Charles Starr were early standard-setters of the sartorial splendor that became a hallmark of the 600 to 800 professional gamblers plying their trade on the river. Their expensive black suits and boots were offset by snow-white ruffled shirts and dazzling brocaded vests. Ostentatious jewelry advertised the gambler's prosperity. Huge rings adorned his fingers. A stickpin with a large stone, called a 'headlight,' sparkled on his chest. In a pocket of his 'flowerbed' vest was an enormous pocket watch adorned with precious jewels and attached to a heavy golden chain that draped across the gambler's chest. The discovery of gold in California and the resulting rush of 1849 attracted many of the paddle-wheel and Mississippi River town gamblers to San Francisco, the new El Dorado of the West. By the early 1850s Portsmouth Square, the center of the City by the Bay, was ringed by large gambling houses where the doors never closed and enormous sums changed hands over the tables. There was the Parker House, originally built by its owner, Robert A. Parker, as a hotel, but quickly converted to a casino as the gambling craze swept San Francisco. A large room downstairs contained three tables for faro, two for monte, one for roulette and a seventh for any other game desired. Professional gamblers paid $10,000 a month for the privilege of conducting their games in this room. A smaller room behind the bar went for $3,500 a month. Jack Gamble, an appropriately named sporting man, leased the entire second floor for $60,000 and outfitted all the rooms for games of chance. It was estimated that at the peak of the California Gold Rush upward of half a million dollars was stacked on the tables of the Parker House on any given day. Flanking the Parker House on either side were two other famous resorts, Samuel Dennison's Exchange and the El Dorado Gambling Saloon, owned by partners James McCabe and Thomas J.A. Chambers. Other houses on Portsmouth Square were the Verandah, the Aguila de Oro, the Bella Union, the Empire, the Arcade, the Varsouvienne, the Mazourka, the Ward House, the St. Charles, the Alhambra, La Souciedad, the Fontine House and the Rendezvous. As indicated by the several French names, some of these establishments were owned and operated by gambling syndicates from France, a country long known for its love of gaming. As mining camps sprang up and grew in the hills surrounding San Francisco, the gamblers followed. Soon elaborate temples devoted to the goddess Chance were running day and night in Sacramento, Columbia, Nevada City and other Sierra boom towns.Among the former Mississippi riverboat gamblers who gained prominence on the California scene were Cora and Bryant. In San Francisco Cora continued to enjoy remarkable success at the faro tables, but luck completely deserted him after he resolved a difficulty with U.S. Marshal William H. Richardson on November 18, 1855, by shooting him to death on a San Francisco street. Shootings and stabbings were common occurrences in the city, and had this murder been committed a few months earlier Cora might have escaped punishment on the ancient claim of self-defense. But violence had reached such proportions in the city that residents were calling for reorganization of the Vigilance Committee that had been so effective against the criminal element in 1851. In that year vigilantes had executed or banished from the city many miscreants, and now, five years later, they felt another no-nonsense cleansing was called for. They tried Cora, found him guilty and on May 22, 1856, hanged him from the roof of their headquarters building. Bryant's California fortunes were better. After his arrival, he had purchased the Ward House, refurbished and renamed it the Bryant House, and soon became one of the most prosperous and influential men in San Francisco. In 1850, when the first election for sheriff was held in the city, he ran for the office. Although he spent $50,000 on his campaign and bet another $10,000 that he would win, he was defeated by the popular Jack Hays, a celebrated former Texas Ranger. Bryant sold his gambling house and moved on to the outlying camps, where he was financially successful. By the time he left California in 1854, he had reportedly sent $110,000 in winnings to his wife while maintaining a lavish lifestyle for himself. He resumed his gambling operations in the South and continued to prosper, but at the end of the Civil War he found himself destitute, as his wealth was in worthless Confederate currency. He was reduced to 'roping suckers' into a sharper's crooked game. One of the suckers took offense and in 1868 shot him dead. With the 1860s came the great mining excitement of the fabled Comstock Lode in Nevada. Most of the gambling activity in the Comstock was centered in Virginia City and nearby satellite communities. As in San Francisco, gambling houses dominated the main streets of the new towns. At the height of the boom an agent of the U.S. Geological Survey, studying recreational opportunities in Virginia City, found that the town of 18,000 had a gambling house for every 150 inhabitants. The best known of the many resorts in Virginia City was the Gentry and Crittenden Gambling Saloon, which featured a no-limit faro table presided over by the famous dealer Hamilton Baker. Other houses of note were Tom Peasley's Sazarac, named after a new cocktail introduced by Julia Bulette, the queen of the town's red-light district; the Delta Saloon, owned and operated by Jim Orndorff and Jack Magee; and Tom Buckner's Sawdust Corner. Other prominent gamblers of Virginia City in its heyday were James 'Kettle Belly' Brown, Matt Redding, Jesse Bright, Gus Botto, Billy Dormer, Tom Diamond, Miles Goodman, Joe Dixon, Ramon Montenegro, Grant Isrial and Joe Stewart. Gold Hill and Carson City were also outstanding towns for the sporting element during the Comstock bonanza years. The undisputed top man in the game at Gold Hill was William DeWitt Clinton Gibson, who was later elected to the Nevada Senate. The Headquarters, the Magnolia and the Occidental were all first-class gambling halls in Carson, and the leading sporting men were Vic Mueller, Tump Winston, Henry Decker, Gus Lewis, Mark Gaige and Adolph Shane. Dick Brown ran two establishments — the Silver State Saloon on the divide between Virginia City and Gold Hill, and the Bank Exchange in Carson City. One of the most important events of the late 1860s was the completion of the transcon-tinental railroad. As the Union Pacific snaked across the Great Plains to meet the Central Pacific in its historic linkup at Promon-tory, Utah Territory, on May 10, 1869, it produced a number of end-of-track towns that collectively became known as 'Hell on Wheels.' They were gathering points for some of the lowest dregs of the sporting world, including hundreds of tinhorn, thieving gamblers. When the railroad pushed on, most of these towns disappeared. The sporting crowd simply loaded their tents, shacks, whiskey barrels, cots, gambling equipment and other paraphernalia on flatcars and moved to the next location at the end of the line. But a few points remained as permanent communities, and today the cities of North Platte, Neb.; Julesburg, Colo.; and Cheyenne, Wyo., can trace their origins to Hell on Wheels. Most of the honky-tonk crowd who preyed on the railroad construction workers during this period were forgettable small-timers, but a few went on to prominence among the gambling men of the West. Most, like John Bull, 'Canada Bill' Jones, Doc Baggs and Ben Marks, claimed to follow the respected profession of gambling, but were in fact confidence operators who fleeced their victims with three-card monte, thimblerig and other crooked gambling games. When the steel rails at last spanned the country, many of these sure-thing gamblers continued to work their swindles on railroad passengers, using the rail center of Omaha as headquarters. They joined a large contingentof other crooked gamblers who formed the lowest echelon of the profession. Gambling, with its basic get-rich-quick appeal, had always attracted a criminal element. Perhaps the most famous member of this gallery of rogues was Jefferson Randolph 'Soapy' Smith, who worked his crooked scheme in Colorado for many years. It was Soapy who coined the expression'sure-thing game,' once proudly proclaiming: 'I am no ordinary gambler. The ordinary gambler hazards his own money in an attempt to win another's. When I stake money, it is a sure thing that I win.' Smith got his start and his nickname from a scam he developed in Leadville, in the Colorado Rockies. He had first worked the thimblerig game, a variation on the three-card monte swindle, which simply seemed to challenge a potential victim's quickness of eye. Manipulating three walnut shells and a pea on a board, he would induce the sucker to bet on which shell concealed the pea, when in fact it was under none of them, for he had palmed it. When that racket grew old, he devised a new scheme based on the same principle that the hand is quicker than the eye. From a pile of paper-covered soap bars he would extract a few, remove the paper and apparently wrap $20 and $50 bills around the bars before replacing the covering. He would then allow members of his audience to select any bar they wished at $5 apiece. Of course, none of them contained any bills, because he had deftly palmed them in the wrapping process. The decade of the 1870s saw the advent of the great trail drives of Texas Longhorns to the Kansas railheads and the birth of the notorious cow towns of Abilene, Newton, Wichita, Ellsworth and Dodge City. All became great gambling centers during their early days, and some of the most celebrated names in Western history are associated with this period. James Butler 'Wild Bill' Hickok, Wyatt Earp and Bat Masterson are remembered today as fearless lawmen of the cattle towns, but all were professional gamblers who spent many more hours at the faro or poker tables than they ever did patrolling the streets. Joining them were other professional gamblers whose names are remembered today for their gunfighting notoriety: Doc Holliday, Ben Thompson and Luke Short. It was no accident that many of the top-flight gunfighters of the Western frontier were members of the sporting fraternity. Tough, steel-nerved young men who had acquired gunfighting reputations either in personal difficulties or as boomtown lawmen found themselves in demand as dealers in gambling resorts. There were two reasons for this. First, gunfighters of renown attracted patronage, as miners and cowboys were quick to seize the opportunity to match wits and gambling skills with frontier celebrities across a green felt table. Second, since the open display of large piles of cash was a constant attraction for criminals of all sorts, ranging from sneak thieves to holdup men, the mere presence at the tables of famous personalities known to be adept at the art of the draw and shoot discouraged any attempt to steal. The 1870s also saw more ore strikes and additional mining districts. New boomtowns quickly emerged, most notably Deadwood in Dakota Territory, Leadville in Colorado, and Tombstone in southern Arizona Territory. All three became gambling meccas, and their names have been associated with some of the most famous Westerners of the 19th century. Wild Bill Hickok was shot to death as he sat in a poker game in a Deadwood saloon, and the hand he held — aces and eights, the 'Dead Man's Hand' — became an enduring legend of the West. Leadville, 10,000 feet high in the mountains, blossomed almost overnight into the largest city in Colorado, and at one point its boosters attempted to wrest the state capital away from Denver. At its peak, gambling opportunities were afforded in more than 150 resorts ranging from small saloons to elaborate theaters and concert halls. Some of the better known were Tom Kemp's Dance and Gambling Hall, which in 1879 featured vaudeville song-and-dance star Eddie Foy; the Texas House, where proprietors Bailey Youngston and 'Con' Featherly provided a dozen faro tables around the clock; and 'Pop' Wyman's Great Saloon, in which a large sign over the bar read: 'Don't Shoot the Pianist — He's Doing His Darndest.' Most of the leading Western gamblers, including Ben Thompson, Bat Masterson, Luke Short and Doc Holliday, spent a good deal of time — and money — in Leadville. There is a story that after dropping more than $3,000 at faro one night there, the volatile Thompson in a fury turned over the table, jerked out his six-shooter and shot out all the lights, sending panic-stricken patrons scurrying for the exits. Holliday, suffering one of those streaks of bad luck and near poverty that plagued all gambling men, shot another sporting man named Billy Allen in Leadville in a dispute over a mere $5 debt (see 'Spitting Lead in Leadville: Holliday's Last Stand,' in the December 2003 Wild West). Tombstone blossomed into a major city in the Arizona desert almost overnight and attracted many prominent professional gamblers, including Masterson, Holliday, Earp and Short. The leading drinking emporium in the boomtown was the Oriental Saloon. Its owner, Mike Joyce, leased the gambling concession to a triumvirate of Western sporting men — Dick Clark, a veteran of the Colorado mining camps; Lou Rickabaugh, a San Francisco sporting man; and Bill Harris, former owner of the famous Long Branch Saloon in Dodge City. When gambling became so popular in the Oriental that it adversely affected business at the other resorts in town, a group of competitors hired Johnny Tyler, a gambler of some gunfighting notoriety, to lead a gang of toughs into the Oriental every night, start a ruckus and intimidate patrons. The Oriental owners retaliated by offering Wyatt Earp, who had acquired a gunfighting reputation of his own, a quarter interest in the business if he would handle Tyler and his cohorts. To help him in this task, Earp employed Doc Holliday and sent for Luke Short and Bat Masterson to come to Tombstone and deal in the Oriental. This squad of gunfighting luminaries was too much for Tyler, who soon left town, and the Oriental returned to its air of decorum and its profitability. Soon Bat Masterson and Luke Short also departed Tombstone — but not before Short had killed Charlie Storms, another well-traveled professional gambler of note, in a famous gunfight. Wyatt Earp and Doc Holliday stayed on to gain immortality for their participation in the most celebrated Western showdown of all, the so-called Gunfight at the O.K. Corral. Holliday also joined Wyatt in his vendetta ride to avenge the murder of his brother Morgan and the crippling of his brother Virgil. They left Arizona as fugitives wanted for murder, but they returned to their gambling profession and were never tried. As great cities grew in the West during the 1880s, gambling emporiums grew with them. San Francisco, where gambling had flourished since the first days of the California Gold Rush, now harbored the Barbary Coast, a sin center of worldwide notoriety. Denver, Kansas City, Omaha, Tucson, Hot Springs, Ark., and the Texas cities of Austin, San Antonio, Fort Worth and Dallas were recognized as wide-open for gambling of all sorts — from cheating three-card monte scams to high-stakes poker and faro games in elaborate casinos. It was during this period that the Gamblers' Circuit developed, with professional followers of the goddess Chance traveling around the country, sometimes following the seasons but more often following the latest report of a mining strike or a cattleman's convention. In the late 1890s, gold was discovered in the Klondike region of Canada's Yukon, and the last great rush to a new mining district was on. Of course, along with the prospectors and mining men who flocked to the Klondike were members of the sporting crowd, the same types who had been early arrivals at every boomtown in the West since the Forty-Niners first arrived in California. They opened saloons, brothels and gambling houses and did a flourishing business separating the miners from their gold dust. Some of the most colorful professional gamblers of the American West made it to the north country. Wyatt Earp was there. He and his partner, Charlie Hoxie, ran the Dexter Saloon in Nome, which they advertised as 'The Only Second-Class Saloon in Alaska.' When he sold his interest to Hoxie and returned to California, Earp is said to have accumulated $85,000. George Lewis 'Tex' Rickard, the former city marshal of Henrietta, Texas, joined the rush and ran gambling games, first at Circle City in Alaska and later at Dawson in Yukon Territory. He made and lost a fortune, owned and lost two gambling houses, and made another fortune. It was in the Klondike that he first began promoting prizefights, an enterprise that would lead him into worldwide celebrity as the promoter of the multimillion-dollar-gate bouts of the 1920s featuring heavyweight Jack Dempsey. The memorable gamblers of the Klondike gold rush included 'Square Sam' Bonnifield, Rickard's mentor, and Louis 'Goldie' Golden, who once won $72,000 and Bonnifield's gambling establishment from Square Sam in a poker game. Goldie lost it all back later when Square Sam, supplied with fresh funds by admirers, cleaned him out. Gambler Harry Woolrich was about to board a steamer to leave the north with $60,000 in winnings when he flipped a half dollar on a faro layout and made what he said was 'one last bet.' Twenty-four hours later, he had lost the $60,000 and his steamer ticket. William F. 'Swiftwater Bill' Gates won $30,000 in a poker game in Nome but achieved national newspaper coverage for his many amorous adventures. The crooked gamblers seemed to congregate in the north country at the port town of Skagway, where, under the leadership of Soapy Smith, they relieved new arrivals and departing miners of anything of value. In 1898 Smith was grand marshal of a Fourth of July parade in Skagway; four days later Frank Reid, a member of a citizens' committee, shot him dead in a gunfight in which Reid also received a fatal wound. There were still a few wide-open gambling towns after the turn of the century, most notably the boom mining camps of Nevada, particularly Goldfield, Rawhide and Tonopah. Wyatt Earp and Tex Rickard were there, as well as such colorful gambling notables as George Wingfield, Riley Grannan and 'Diamondfield Jack' Davis. Wingfield started out earning $25 a day as a dealer in the Tonopah Club, gambled successfully against other houses, invested his winnings in the mines, was worth more than $2 million by age 27 and became a power in Nevada politics. Grannan broke the faro bank in one saloon and bet his $52,000 winnings on one turn of a card against title to the house. He lost. When he contracted pneumonia and died in Rawhide, Herman W. Knickerbocker, a defrocked Methodist minister, delivered a moving eulogy to the famous gambler. Diamondfield Jack got his start as a bodyguard for Wingfield. Goldfield legend has it that when he expected trouble, he became a walking arsenal, wearing three overcoats with a pistol in every pocket, a bowie knife at his belt and a sawed-off shotgun slung across his back. Other fables attached to the man. He was said to have acquired his name from a field of diamonds he owned. The rumor that he had escaped death sentences on five occasions was greatly exaggerated; he had only been condemned to hang once, for a dual murder in Idaho, and had avoided the hangman's noose when another man confessed to the crime. The great age of Western gambling ended with the closing of the frontier and the rise of antisaloon and woman suffrage reform movements that swept across the nation in the first decades of the 20th century. These led inevitably to constitutional amendments prohibiting the manufacture and sale of alcoholic beverages and establishing the enfranchisement of women. State after state passed legislation outlawing casino gambling. Nevada alone bucked the tide. Casino gambling returned in the latter half of the 20th century on Indian reservations and in Las Vegas, a city devoted to gambling. Its great popularity led to legalization in many areas of the country, and now anyone wishing to wager money will have little difficulty in finding a place to do it. But the colorful professional gamblers of the Western frontier are long gone and generally forgotten. |
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One of the more popular British tribal rites is the celebration of the annual Bank Holiday on the first Monday in August. The day has long featured a gay mass exodus to the seaside, the countryside and the nation's playing fields, sporting arenas and amusement parks, not to mention the neighbourhood pubs. This preoccupation with revelry provides an ideal background for a shady enterprise, and thus it was that the Trodmore Hoax came into full larcenous bloom in London on the Bank Holiday morning of Monday, Aug. 1, 1898.
As usual, the diversions included special race meetings throughout Great Britain, many of them held at small tracks scattered across the countryside. None of these events was so obscure as to be beneath the dignity of London's off-track bookmakers, particularly if a potentially profitable wager appeared. London's bookies were, and are, famed as an obliging breed in this regard. On this festive morning they were up bright and early working the streets, corner shops and pubs, on the usual lookout for a good thing. Along with the routine heavy play on the established tracks, they observed some interest in an obscure meeting in the south-western county of Cornwall called Trodmore. The full Trodmore program was carried on the racing pages of that morning's edition of the widely read London journal Sportsman. The adventurous were making bets on a 3-year-old named Reaper, scheduled to run in the fourth race of a six-race card and quoted at approximate starting odds of 6 to 1. The bookies were not unduly curious about this flurry of interest in a little-known horse since most of the wagers were placed in the pubs that opened at 10 a.m., where clients were notoriously inclined to spells of poor judgment after a pint or two. Also, operating individually, as they did throughout the sprawling precincts of London and its suburbs, the bookies were not aware of the full extent of the support for the horse. So when the report came that Reaper had won, the bookies were in trouble. It wasn't that Reaper was really a good horse. Or even a bad horse. The fact was that he was no horse at all. Not only that, there was no fourth race at Trodmore, there was no race meeting at Trodmore, there was, indeed, no such place as Trodmore. These were the basic ingredients of the holiday caper spawned by an organization subsequently vaguely known, and in some quarters greatly admired, as the Trodmore Syndicate. The curious course of this affair is traced in the files of Sportsman and the rival Sporting Life, two London journals at the time engaged in a fierce battle for street sales. It was the reports exclusively in Sportsman that had provided initial information on the phantom meeting. Although it had been several weeks in the making, the gambit emerged as a full-fledged swindle on the August Bank Holiday morning when the final details of the Trodmore meeting appeared in the Sportsman. The report listed the entries, jockeys, owners, post times, distances, purses, approximate odds and all other pertinent information. In a modest way this was a clear scoop over Sporting Life, which carried not a word of information on the event. Now a highly reputable and widely read newspaper such as the Sportsman does not treat the publication of such information lightly, and certainly not without having first been satisfied as to its authenticity. In the judgement of the editors, sufficient assurance had been provided by an impressive and highly official-looking mass of correspondence that had begun arriving several weeks before. The first advice concerning the Trodmore meeting had been received in the mails in late July in a letter from the Fox and Hounds Hotel, Trodmore. Preliminary details appeared under the tastefully engraved letterhead of the "Trodmore Hunt Club." Enclosed in this first missive were all the data required for the official posting of the event: rules, purses, the names of patrons, stewards, sponsors and officials. It was respectfully noted that the Fox and Hounds was Race Headquarters, and that further information would be forthcoming from the Clerk of the Course at that address. Further information was subsequently received as promised, with letters noting the progress of preparations and listing early entries. The Clerk of the Course also advised the Sportsman that the patrons would be most grateful if word of their modest charitable project could be passed along to the readers. Pleased to receive this information on an event in the west counties, the editors were happy to oblige through the paper's regular race-news columns, but the editors said that unfortunately they would not be able to staff the meeting itself: their west counties correspondent would be busy at a larger event at Newton Abbot. However, if the patrons or the stewards could recommend a reliable person to wire in the results.... Enter Mr. Martin, the gentleman from St. Ives. A few days later a letter bearing his signature appeared in the Sportsman offices in an envelope with a Trodmore postmark. Mr. Martin wrote that he had been informed by the Race Committee of the problem regarding coverage of the Trodmore meeting and said that he would be pleased to offer his services. Later, over the phone, an agreement was reached whereby Mr. Martin would cover the event for the Sportsman at the standard fee of one guinea, full results to be wired at the conclusion of the meeting. At his suggestion, applauded by the Sportsman editors, it was further agreed that the Trodmore results should be exclusive to that paper. Everything was in great shape as Bank Holiday Monday morning dawned, and a swarm of carefully briefed men from the aforementioned Trodmore Syndicate prepared to make the rounds. Each carried a copy of the Sportsman, turned to the racing section that carried the details of that day's Trodmore program. The tactic was the soft sell and the fast move... concentrate on the pubs, always heavily worked on days like this; have a pint; flash the Sportsman; suggest a fancy for Reaper in the fourth at Trodmore. If faced with any questions or reluctance, back off. Pay cash, and arrange to collect the next day. The agents moved swiftly from pub to pub, and bets were laid and accepted without trouble. Business was brisk right up to the scheduled 1:30 p.m. first post time at the first meeting of the Trodmore Hunt Club in Cornwall. In what Mr. Martin enthusiastically described as a highly successful and exciting inaugural meeting, the following winners were recorded, along with the official closing odds: First race: Jim, 5 to 4; second race: Rosy, 5 to 1; third race: Spur, 2 to 1; fifth race: Curfew, 6 to 4; sixth race: Fairy Bells, 7 to 4. And, oh yes—fourth race: Reaper, 5 to 1. These results appeared in the Tuesday edition of the Sportsman, which was on the street at 7 a.m. The rival Sporting Life was out shortly after, but with no report from Trodmore. Again clutching copies of their favourite newspaper, the Reaper fanciers swarmed back across London, this time to collect. At first there were only the normal grumblings as bookies paid off, willing to accept the official results as published in the Sportsman. Then, with just a small portion of the take in the till, there was trouble. It began with a bookie over in Chelsea who balked at paying because the results were not carried in Sporting Life. The fellow said he wasn't quarrelling over the official nature of the lone report, but wanted confirmation of the odds, which just might have been published in error. The agent involved didn't press the matter. He retired quietly, as did his mates across London as word of the challenge sped along the bookies' grapevine. With the enterprise under dangerous, if unsuspecting, scrutiny, the jig was up. Or was it? Not at official Race Headquarters at the Fox and Hounds, Trodmore, it wasn't. Word from there or thereabouts went out to lie low until Wednesday. And by late Tuesday afternoon the editorial offices of Sporting Life were bombarded with calls from indignant readers demanding to know why they had not carried the Trodmore results. The editors checked, saw that the Sportsman had carried the results, and apologized for their delinquency. One of the late callers was a Mr. Martin, who noted the general indignation and said that he would be pleased to help out by sending the full results, as he had been on hand at the Trodmore meeting in an official capacity. The offer was accepted. It was agreed that Mr. Martin would wire his story later that evening, in time to placate readers of the early Wednesday edition. But then, to make things a little easier for a work shift that was coming straight off a long day's celebrations, it was decided that to save time the Trodmore results would be copied direct from the Sportsman. The Syndicate men were there waiting when the first edition of Sporting Life appeared, all set to toddle off with the confirmation needed to collect the rest of the bet money. The Trodmore results were there all right, but there was one small problem. The closing price on Reaper, the winner in the fourth, was quoted not at 5 to 1 as in the Sportsman but 5 to 2—the result of a printer's holiday hangover error. The swindle was now in real trouble, and discretion clearly being the better part of valour, the frustrated bettors swiftly and quietly disappeared. It was just as well. The bookies who had paid off began screaming for information on the Trodmore Race Meeting. They were joined by interested fellow professionals, then by the usual outraged public. Who knew anyone connected with the Trodmore Races? Who had witnessed the event? Where, in fact, was Trodmore? Who knew anything about Reaper? Who knew anything about anything? Swamped with angry calls the two highly embarrassed newspapers tried to get the facts. A check with the post office and telegraph services revealed that despite the Trodmore postmarks on all that official correspondence from the Fox and Hounds Hotel, there was no such town as Trodmore. Not in the county of Cornwall, nor anywhere else in Britain. That information wiped out the Fox and Hounds, the Trodmore track and all the distinguished local citizens who served as patrons, sponsors and stewards. Not to mention Reaper, no matter what the closing price. The few things certain were that some £1,000’s of real money had changed hands, and that there had been a gentleman who went by the name of Mr. Martin—although where he went nobody would ever know. He and the rest of the Trodmore Syndicate simply faded into the British countryside, leaving a baffled racing fraternity wiser by this much: never bet on a horse named Reaper in the fourth unless you have personally checked his teeth. |
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Reminiscences Of A Stock Operator is one of my favourite books and it's difficult to compound the life of Jesse Livermore
When Jesse Livermore made his first stock trade at the tender age of 15, he didn’t hedge his bets. He consulted the charts he’d compiled working as a chalkboard runner in a Boston brokerage firm, and when the figures for the company in question, Burlington, checked out, he went all in, investing everything he had—all $5—in the railroad. Two days later, he cashed in his shares, for a profit of $3.12. It was 1892. Exhilarating, that first taste. The pendulum had begun to swing. Livermore began to roam the streets of Beantown, frequenting its bucket shops, gambling counters that took bets on stocks without executing actual trades. His ability to recognize patterns in the ticker tape stood him in good stead. In six months, he’d accumulated $1,000. Five years later, it was $10,000—enough to make him persona non grata to every pseudo-broker in the city. So he moved to New York and graduated to trading with real Wall Street firms. Something, however, was wrong. His system wasn’t delivering as expected. He watched his stake drop, first to $2,500, then to zero. At an age when most contemporary youth were still preoccupied with fraternity smokers and petting, the “Boy Plunger” (turn-of-the-century slang for “reckless gambler”) had already gone through a full cycle of boom and bust. Livermore decided the problem lay in the lag time between the stock order and the execution of the purchase itself. So he borrowed $500 against future gains. The pendulum began to swing wider. Quickly making back what he’d lost, he increased his stash further, to $50,000. Then, on May 9, 1901, he lost it all, every penny, largely due to the frenzied pace of the day’s trading. Again he hit the bucket shops, again accumulating a stake that allowed him to get back into the game. He returned to New York with what he termed a “fair-sized roll.” Then, on April 16, 1906, he was hit by a premonition. With no warning, he yielded to a strange urge to sell short a thousand shares of Union Pacific railroad—an urge even he admitted he didn’t understand. Two days later, the San Francisco Earthquake hit. Union Pacific was decimated; he’d made $250,000 literally overnight. Inexplicable, the sudden intuition, but just as inexplicable was what happened next: again trading in shares of Union Pacific, he violated two of his most cherished principles—never heed insider information, and always keep your own counsel—and sold short when a friend tipped him off that the stock was about to tank. It didn’t. His net loss: more than $40,000. The arcs described by the pendulum continued to widen, the swings to grow ever more vertiginous. During the Panic of 1907, Livermore again shorted the market, earning $1 million in the course of a few days. He then proceeded to lose everything in an attempt to corner the cotton sector, declaring bankruptcy and running up debts of over $1 million by 1916. Once again, he amassed sufficient capital to recover, making first $3 million (in assorted commodities), then $10 million (in wheat). Then came his greatest moment: sensing the impending 1929 crash, he again shorted the market, emerging from the rubble of October 29 with a net profit of $100 million—well over a billion dollars in today’s money. Five years later, he was bankrupt, his vast fortune completely wiped out, for reasons that remain mysterious even today. Livermore rallied from his subsequent depression in the late 30s, pooling sufficient energy to write a book detailing his trading principles. But on November 20, 1940, the pendulum swung finally, irrevocably against him. In the cloakroom of the Sherry Netherland Hotel in Midtown Manhattan, he shot himself in the head with a .32 Colt automatic. A suicide note was found scribbled in his notebook: “I am a failure,” it said. Who was Jesse Livermore? How could the world’s greatest trader, the author of one of the most staggering fortunes America had ever seen, end up hitting the wall in just five years? What drove him to take ever more manic risks with his trades, to the point where the harmonic oscillator of his own speculations ended by ripping him apart? Livermore himself gives us a clue to his own mystery in Reminiscences of a Stock Operator, the book of interviews he wrote with the journalist Edwin Lefèvre: The speculator’s chief enemies are always boring from within. It is inseparable from human nature to hope and to fear….The successful trader has to fight these two deep-seated instincts. He has to reverse what you might call his natural impulses. Instead of hoping he must fear; instead of fearing he must hope….It is absolutely wrong to gamble in stocks the way the average man does. The great trader liked to style himself as a dispassionate analyst. Repeatedly in Reminiscences, we find him stepping back from the welter of the trading floor to admonish himself with conclusions drawn from his market smash-ups—conclusions that read like oracular utterances brought down from the sacred mount of traders: “I learned you must give up trying to catch the last eighth, or the first: these two are the most expensive eighths in the world,” and the like. But the excerpt above intimates that perhaps cold-blooded calculation wasn’t the whole story. That beneath the rational exterior lay something that was not rational, that had to do instead with dreams and forebodings and hidden compulsions. That this aloof, seemingly imperturbable man was in fact deeply attuned to the obscure rumblings of chaos. For chaotic his life was, in spades. His broker, reflecting on his penchant for cruising the Manhattan streets at night in his canary-yellow Rolls Royce in search of young girls, quipped, “When Livermore is speculating, he is thinking of screwing, and when he is screwing he is thinking of speculating.” His first wife, Nettie Jordan, separated from him one year after their wedding, following a tearful scene in which he begged her to pawn her jewels to finance one of his bankruptcies. His second wife, Dorothy Wendt, was an 18-year-old Ziegfield Follies showgirl who responded to Livermore’s philandering by taking up with a Prohibition agent; after separating from both men, she went on to shoot her 16-year-old son, Jesse, Jr., through the chest with a .22-caliber rifle. Both Livermore’s son and his grandson were manic-depressive and suffered from alcoholism. Both committed suicide. Nor was chaos a mere by-product of Livermore’s personal eccentricities—it was his stock in trade. The Great Bear of Wall Street made his greatest profits when he sold short, that is to say, when he capitalized on other traders’ helplessness in the face of their own hopes and fears. In an age when Wall Street optimism was almost an American religion, he learned to read, and profit by, the dark anxieties that flowed just beneath the surface of the zeitgeist and that were liable to break out at any moment. He was an expert at sensing the nature and scope of mass hysteria, the thresholds at which men begin to panic. It’s no accident, then, that his favorite book was Extraordinary Popular Delusions and the Madness of Crowds, the Scottish philosopher Charles Mackay’s dark treatise on the power of the irrational in history. Nor is it an accident that, in seeking to harness the forces of unreason that he knew so intimately, he ended up betrayed by them—betrayed and, ultimately, destroyed. The man who all his life sought to codify the workings of the market into a foolproof set of rules was the same man who consistently violated those rules, helpless to resist his own compulsions. The man who proclaimed clear-sighted analysis as the key to the charts was also a man haunted by irrational dreams and forebodings, who depended upon an uncanny sixth sense to tell him which way the market was moving, and who ultimately succumbed to the same delusions he fought so hard to keep at bay. Traders are not the same as investors. Investors, however aggressive, are devotees of the long term. Personality-wise they tend to be more sober, more thoughtful and restrained, a la Warren Buffett or Peter Lynch. Volatility is, if not their enemy, then at best an unpredictable confederate, to be regarded with suspicion. Traders, by contrast, live in the moment. They operate by learning to feel the market, sensing when to cut their losses, when to double down, when to follow the trend and when to go against everyone. Far from being adverse to volatility, they secretly hope to get inside it, to understand it and so ride it to victory. Like all traders, Livermore dreamed of beating the market, pinning his hopes to the forces of order: reason, logic, calculation, monetary self-discipline. Yet like all traders, he ultimately came face to face with that which cannot be rationalized, not just in the great hurly-burly of Wall Street but inside himself, in the shadowy realm where desire becomes compulsion and ambition self-destructive obsession. So that in the end, his battle with the market was a stand-in for his larger battle with himself. Livermore was well aware of the chaos inside him. That’s why, early in his career, he invested in $800,000 worth of annuities for his wife and children that he himself would be unable to touch: “I knew a trading man will spend anything he can lay his hands on. By doing what I did my wife and child are safe from me.” In the end, Livermore’s dream was the great, illusory dream of gamblers everywhere: to impose form and coherence on chance itself. But he failed to treat chance with the proper respect: he got too close. His story reads like a dark pendant to that other great 1920s story of lives lost to the pursuit of wealth, The Great Gatsby. Like Fitzgerald’s hero, Livermore sought to define himself against the huge forces that were shaping an America on the verge of empire. His failure, no less than Gatsby’s, is a grim parable of the fate of the individual in the age of money. |
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How do I get the the last page of this?
Yes I am stupid, so what..........  |
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AAAhhhhhh, got it and I read that boring book. Almost as boring as Dave Nevison's book. ALMOST
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It's totally different from Nevison's books. Each to their own but it gave me some priceless nuggets when I first read it many years ago and I still have a copy that I read even now.
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Thanks for putting these stories up Bazzar. Very entertaining reading. Please share more if you have any.
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"Greed, if you want it in a word," said Simon Cawkwell, otherwise known as Evil Knievil, one of the stock market's most fearsome bear traders. "That was my primary motivation for getting into spread betting."
The self-confessed compulsive gambler admits that its lure is making money from the financial markets free of tax, although these days he claims the intellectual stimulation is more important the riches. Because players do not own the underlying shares, their profits are free of stamp duty and capital gains tax – making a spread bet the perfect medium for the daredevil independent investor. Its method is also extremely risky. The challenge of working out which companies are under and overvalued is "a bit like doing the crossword", Mr Cawkwell said. But unlike mere puzzles, spread betting allows punters to wager much more than the cash they pay up front and it is not always obvious how much money they could stand to lose. The small matter of the worst economic crisis to hit the world since the Great Depression is not even a hiccup for Mr Cawkwell. Indeed, he sounds positively indignant at the suggestion that the volatile markets could upset his success. Related Articles 'I lost £200,000 in a day' 17 Jul 2009 'You can make a lot, but you can also lose a fortune' 16 Jul 2009 'When markets are falling, spread betting is easy' 27 Jul 2009 How to be a day trader 16 Jul 2009 Don't bet your pension on CFDs 15 Jul 2009 Introducing spread betting 13 Jul 2009 "All markets are always unpredictable. The market is always difficult," he said. After all, betting that stocks will go down is just as profitable as betting that stocks will go up. In fact, Mr Cawkwell loves a good downturn. "That's when people are stupid," he claimed at the height of the banking crisis in October last year, boasting that he would probably make £3m during the recession. This is the man who announced that he made a million shorting shares in the aftermath of the 9/11 terrorist attacks – before promptly losing the money again as the markets rose. Most impressively, he warned in November 2007 that Northern Rock's shares would be worth 5p and that the bank's woes represented the "greatest shorting opportunity" he'd ever seen. He took his own advice, and booked his usual £1m profit, but apparently he could have won more. Thanks to an oversight, he incurred a tax liability of £300,000 when the usual bookies couldn't take large enough punts and he had to put part of his bet through agency brokers. The 62-year-old former accountant does not just bet on the financial markets. He reportedly has a multitude of television screens at his home and office, most of which show financial information, but several display the horses or other traditional betting sports. For more than a decade, he has made this his office, which he calls Evil Towers, putting in 10 hours a day for six days a week. "Of course I enjoy it," he admits. "I love trading and sport betting. I wouldn't be doing it if I didn't." In one famous trade, he bet against Sporting Index's predictions on how northern hemisphere teams would shape up against southern hemisphere teams in the Rugby World Cup. He cashed in at £250,000 after siding with the southern hemisphere – despite not having watched a rugby match since school. Mr Cawkwell has never revealed the secrets of his success, despite writing at length about his experience as a compulsive spread better in his books – The Notorious Diaries of Evil Knievil and Evil's Good: Book of Boasts and Other Investments. But he did give away several invaluable tips for the novice spread better. "You've got to know about the stock market," he declared. "It's never easy, whether you're in a recession or not. Anybody who's traded properly will know that. And you must take it slowly at the start. Don't put too much money in all at once when you are just beginning." Most of Mr Cawkwell's research is done on the internet and by speaking to people on the phone all day. Reading the newspapers, studying each company, arming yourself with a good instinct and nurturing an appetite for risk will also increase the chances of doing well. But becoming a full-time professional takes complete dedication. In a rare burst of modesty, Mr Cawkwell pointed out that he might be the most famous proponent of spread betting, but there were hundreds of worthy gamblers who can give him a run for his money. "People keep on publishing the fact that I'm successful," he said. "But there are plenty of other people around that make plenty of money." Most of the stocks he looks at closely are apparently not members of the FTSE Index, but smaller company shares that are more volatile and less well researched. The man who claims he was the first to expose the accounting irregularities of Robert Maxwell has an extremely sharp eye for spotting overvalued stocks. "There are surges of uninformed interest in the market," he tells me. "But in the main, a trader will find it hard when he's up against other traders as well informed as he or more than he." So can anyone make a good better simply if they work hard enough and study the stocks? In theory, anyone can engage in spread betting. However, Mr Cawkwell said that many were too cowardly to have courage in their convictions and stick out positions over the long term. Others were unnerved by initial losses and lacked the tenacity to keep trying. "Many private investors have been burned to the point of never coming back," he said. "It does attract the kind of people who are used to and enjoy taking risks." Such words are hardly encouraging for players new to the tough world of the spread better. But this veteran's advice is medicine that has to be swallowed if people are serious about making a career out of placing winning bets on the stock market. In the end, he says, no book or course or experienced investor can teach someone everything they need for expertise in spread betting. You have to learn on the job, keep alert and work hard, Mr Cawkwell argued. "Anybody who assumes it's easy will be carried out of there in a coffin, I guarantee it." |
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I've put up a story about Stu Ungar before but this is perhaps a more 'personal' insight from his friend Mike Sexton
I first met Stu Ungar in the late 1970s. That’s when I happened to be in Las Vegas, visiting my friend Danny Robison, who was partnered with Chip Reese – and they were two of the hottest guys on the poker scene. So, even though I was playing $30-$60, because of my friendship with Danny I was around the high stakes players. And suddenly Stu, this tiny kid who couldn’t weigh 100lb soaking wet, was right in there with them. Stu came to Vegas from New York, specifically to play Gin Rummy. Danny, at the time, was known as the top Gin player in America. He travelled around the country and destroyed people. But he couldn’t beat Stuey. Nobody could. What really wowed me, though, was how decisively Stu beat Danny and all the other Vegas giants – guys like Doyle Brunson, Puggy Pearson, Billy Baxter. Those guys were phenomenal Gin players and the world’s greatest gamblers. It got to the point where Stuey had to give them huge spots – I remember him letting Danny see the bottom card in the deck, which is a massive advantage – but he still slaughtered them. Right away, even before I got to know him very well, I liked Stuey. He was a fast-action gambler, he dressed sharp, and he had the quickest mind of anybody I’d ever met. The amazing thing to me was what happened after the Gin action dried up. That’s when Stuey began playing poker, and he didn’t start small. He sat right down with the top guys in all of the biggest games – $200-$400 limit Hold’em or no-limit Deuce-to-Seven, both at the Dunes – before winning the first poker tournament he ever played in (the 1980 World Series) and the 1981 Series as well. He made plenty of money at poker – Stu was an incredibly quick learner – but after the games broke up he still had to be in action. And that decimated his bankroll. He would take his poker winnings and use it to bet on craps or sports or horses or Blackjack (until he got barred for card counting). Straight from the horse’s mouth In truth, Stuey received good information on horses, and he managed some decent earns. But Stu was such an action guy that he had to bet every race, whether he knew anything about the horses or not. Gambling was the only thing that interested him. He wasn’t the kind of person who’d take time to see a show or go on vacation. Even when he went off with a girl, it was only for 20 or 30 minutes – and he considered himself to be the world’s greatest lover. Many times I went out for dinner with Stu, and he left me halfway through the meal. He paid the tab, but he couldn’t stand to enjoy a steak when he could be gambling in the casino. A very sick leak for Stu was golf. It was unbelievable how much he lost at that game. His first time on the course, soon after winning a Super Bowl of Poker [a $10,000 buy-in tournament that had been hosted by Amarillo Slim], was with Jack ‘Treetop’ Strauss. Now Jack was one of the shrewdest gamblers you could come across. He knew his suckers, treated them properly, and recognised Stu as prime tuna. Stu grew up in New York and had never seen a golf course, but after 10 minutes he and Jack were putting for $500 a hole. Within two hours, on the first day he’d ever been to a golf course in his life, Stu lost $78,000 on the putting green. I’d like to bet that that’s never happened before or since. ungar happy Stu Ungar won the WSOP Main Event three times, in 1980, 1981 and 1997 Once he actually got out on the course, Stu had no golf etiquette and no understanding of the game. He wore two gloves all the time and was allowed to tee his ball up for every single shot – on the fairway, in the sand traps, wherever; that was his spot. He had a four-foot tee and was allowed to use it in the water. Some guys who played with us would see Stuey doing that for the first time and it blew their minds. They’d refuse to gamble under those conditions. And we would say, ‘Okay, you’re out of the group.’ All the sharp players knew that it didn’t matter what you gave Stuey, he’d find a way to blow off money. Early on, I remember asking Chip what he thought of Stuey. I probably commented on this guy being the greatest Gin and poker player in the world. Chip said, ‘Mike, you’re right. But the problem with Stuey is that he doesn’t understand the object of the game. The object of the game is to increase your wealth, improve your lifestyle, make a better life for your family. It’s not to gamble every day until you go broke.’ That was Stuey’s problem. Even worse, though, if he wasn’t in action, he got bored and started in with the drugs. Years before I met Stu, back in the 70s, he was already doing cocaine real big. But all the players were doing it then. It seemed like a miracle drug that allowed them to feel good and play forever. I remember one time when Stuey stepped back from a poker table and headed up to his hotel room. Danny Robison looked at me and said, ‘Mike, go up with Stuey. He’s gonna give you something for me.’ Well, I went up to that room and the door was ajar without a Do Not Disturb sign on it. Inside there was a glass-topped desk and it appeared to be covered with a pound of sugar. I don’t know anything about drugs, but I was aware enough to recognise that the white stuff was cocaine and to realise that I needed to get out of there. Stu gave me an envelope for Danny, and to this day I don’t know what was in it. It might have been money or cocaine or pills, but I didn’t ask any questions. I was just a gopher back then. Money down the drain For all of Stu’s bad habits – beyond the drugs, he was the world’s worst money manager and never paid a bill in his life; he’d have $2m in his pocket and no electricity in his house – there was nothing better than sweating him at the poker table. I remember sitting behind him while he was playing a $100-$200 no-limit cash game of Hold’em during the World Series. Everybody had about $20,000 in front of him, including Stuey. Stu was in the big blind and a guy raised the pot, coming in for $800. Stuey had 5-6 of diamonds and he called the $800. Then the flop came J-10-2, no diamonds and all different suits. Stuey led out and bet $1,500 at the pot. The guy called him. At the turn, a Seven came off. Stuey bet $2,500. The guy called again. On the river, the board paired Sevens. With no hesitation, Stuey pushed $8,000 into the pot. This other guy went in the tank for three minutes, trying to figure out what to do. Finally, he turned over his cards, showed the A-10 of hearts and mucked. As Stuey raked in his chips, he leaned toward me and said, ‘Sexton, remember this: there are a lot of guys who’ll fire one shell at a pot. Some guys will bluff a second time. But not many guys have it in them to fire three shells at a pot.’ By bluffing at the pot three times, he got this guy to lay down the winning hand. And Stuey was right, few people have the guts to do it. But that’s why it worked. Stu was so fast that when he played a $10,000 tournament he was under torture for the first three levels. They started with blinds at 25-50, then went to 50-100, then to 100-200. Each level lasted two hours and they didn’t put an ante on until the fourth level. That was when Stuey came to life. Once the antes came into play, each pot had a lot more money, and Stuey was able to steal. Players anted with green chips, and within a couple hours Stuey usually had big stacks of greens. Away from the table, though, Stuey’s problems were catching up with him. In the late 1980s and early 90s drugs started taking control. He began going on cocaine binges instead of gambling and he was always in debt. Bookies gave him credit because they knew he was a big fish – Stuey’d bet every game on the sheet – but they also knew he had earning power. Same thing with the drug dealers. I doubt that many drug dealers will put you on a tab. But Stuey owed them all and he didn’t care. He had protection, so to speak – guys who would straighten out anyone who tried putting too much heat on him. When it became obvious that things were getting bad with the drugs, some poker players tried to help Stuey. Chip and Danny and Billy Baxter were all willing to send Stu to rehab. Chip told him, ‘Stuey, if you play $75-$150 every day for an entire year, I will stake you. Then, at the end of the year, I will put you into the highest games you want to play.’ But Stuey couldn’t do that. He couldn’t play in a game knowing that there was a bigger game being spread. He would rather do drugs than play in the second-biggest game. Midnight run I remember one night in the 1990s when Stu woke me up at 4am, phoning from the seediest part of downtown Las Vegas. He was broke and asked me to come get him. I got out of bed, started getting dressed, and my girlfriend said, ‘Don’t you dare go down there. You’re liable to get yourself killed.’ But I had no choice. I had to go get Stuey. He was wandering the streets, he was completely out of it, and his fingers were blackened from smoking crack. He told me he had to go someplace where nobody could find him. He owed money to some real bad drug dealers and was afraid that they’d track him down and kill him. So I checked him into a small, out-of-the-way motel, under my name. Nobody would expect him to be there. ungar chips Ungar in happier times when he was accumulating chips as fast as he was attention Then, two days later, he called me and said, ‘Sexton, you got to come get me. They’re gonna find me and kill me.’ I wondered how anyone could know where he was at. He admitted that he had called another drug dealer and had him make a delivery. So now the word was out. I came over and moved him to the Gold Coast, over on Flamingo. I got him a room for $49 a night and figured it would cost me $1,500 a month. Then, after just a few weeks, I stopped by to check on the bill and it was $6,000. Stuey had been ordering room service everyday and watching Pay Per View movies. I turned white as a sheet because I didn’t have the money to pay that bill. Stuey kept telling me he was sorry, and I put the $6,000 on my credit card. It really hurt. Through the 1990s, Stu was on a downhill slide. By opening day of the 1997 World Series Championship, nobody thought Stu stood a chance of winning. He came down to the Horseshoe that morning, high as a kite and trying to find someone to stake him. Finally Billy Baxter reluctantly put up the money, and, by six o’clock that night, Stu had $16,000 in chips. But he was in a zombie state, coming off drugs and gasping for air. He told me that he couldn’t take it, that he couldn’t continue playing. I told him that he had to make it through the day’s final sessions, get some rest, and that he’d be fine. Something must have clicked because by the end of that first day he was second chip leader. By the close of day two he was chip leader and he never looked back. Stu won his third World Series in ’97 and it was unbelievable. It looked like he’d turned a corner. Not only did he have money, but he also had personal pride and status. The day Stu won the ’97 Series he had no ID on him. So he couldn’t collect his 50 percent of the $1m first prize. Stu asked Billy Baxter for ‘walking around’ money and Billy offered him $5,000 or $10,000. Stu said, ‘No. I need $50,000.’ Billy said, ‘You need $50,000 to walk around?’ But Stuey had been broke for so long that he desperately wanted to have a good chunk of cash in his pocket. Billy was baffled, but he gave him $50,000 anyway. I stayed with Stu for an hour after the tournament ended. Then, as I understand it, he went over to the Lady Luck casino and played Blackjack. It’s the one place where he wasn’t barred and he lost all his money. They gave him $25,000 in credit and he lost that, too. The rest of his $500,000 went to sports, poker, horses, drugs and more Blackjack. Very little was used to pay off his debts. Nobody was shocked when Stuey ended up broke again. That’s simply the way he was. And for Stu, a $500,000 bankroll just wasn’t very big. Go for broke During most of the 1980s I owed Stuey money, but in the late 90s he was in debt to me for as much as $16,000 – and that was a lot of money to me at the time. I remember being broke once myself and needing some of the money back. So I went up to him, to see where he stood financially. But Stuey was such a good reader of people that before I got to him, he said, ‘Sexton, I know what you’re going to ask me. And if you mention one word about the money I owe you, you’re going right to the bottom of the list.’ I didn’t say a word and just hoped that things would turn out okay. Stu-Ungar late Ungar’s friends could see what he was doing to himself but were powerless to help By the 1998 World Series he was flat broke and Billy had agreed to stake him again. Stu spent the first weeks of the tournament in his hotel room at the Horseshoe, played in none of the preliminaries and, three days before the Main Event, he was fresh and ready to go. Then, that evening, I went to his room with Todd Brunson and Bob Stupak. As soon as we walked in, it was obvious that Stuey was high on drugs. Bob stayed up there, to speak with Stu in private, while Todd and I went downstairs to the Horseshoe bar. Todd told me that Stu’s behaviour was making him sick. And suddenly he came up with an idea: kidnap Stu, tie him up, put him in a car, and take him someplace where there are no dope dealers. I was ready to go along with it and suggested that we drive him up to Doc Earl [a poker player by the name of Phil Earl, who knew Stu well and was able to reason with him] in rural Nova Scotia. But we never followed through with the plan and Stu didn’t show up at the 1998 Series. That summer and autumn he continually called poker players, trying to get money. But nearly everyone had cut him off; most of them would have been happy to pay for rehab, but they had no interest in giving him money for drugs. Just a couple of weeks before Stu died, though, Billy Baxter came through with $25,000. He said, ‘I know I’m throwing this money away. But I’m doing it for old friendship and to give you a shot. But if this goes, don’t call me again.’ Stu took the money, went to the Bellagio, and lost $10,000 in the poker room. Then he dropped out of the game, left the casino, and two weeks later the hard drugs finally took a toll on him. He was found dead in a cheap motel on the north end of the Vegas Strip. The real shame is that he never lived to see the poker boom. With all these tournaments and a $10,000 buy-in every other week, I believe Stu would be off drugs, playing high stakes poker, and getting the publicity and recognition that he craved. He would be the greatest poker player out there and so famous that number two would be 10 miles behind. |
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It took just six years for Daniel Tzvetkoff to go from working for minimum wage at a Brisbane Pizza Hut to raking in $3 million per week in Las Vegas. In that time the 25 year old splashed out on a $30 million mansion, a 100ft yacht, a private jet, twenty luxury cars, a nightclub, and a V8 racing team. It was a meteoric rise for one man – but the eventual fall, when it came, proved to be catastrophic not just for Tzvetkoff, but also for everyone involved in the US online poker industry.
Back in 2002, when the 19-year-old son of a market trader was still flipping dough, such largesse must have seemed an impossible dream. The young Australian didn’t have a single qualification to his name. He was still living at home, and the bus was his favoured mode of transport. The future looked bleak. And then Tzvetkoff stumbled upon the underground world of internet payment processing. At the turn of the millennium, banks and credit card companies were sceptical of handling funds which came from companies based online, particularly those who dealt in pornography, pharmaceuticals or gambling. Many companies from those industries were often blacklisted, which left some close to collapse. Into the breach stepped a new breed of middlemen, known in the trade as ‘high risk payment processors.’ These middlemen did whatever was required to process their client’s money, often by bundling prohibited and clean money together, or by miscoding transactions so that a bank would assume that the funds were from the sale of permitted goods, such as golf clubs, rather than a porn subscription. To the young and sharp-minded Tzvetkoff, the set-up seemed too good to be true. There was no barrier to this supposed gold mine. The industry was not only unregulated, but qualifications and experience were not a prerequisite. All that mattered to the desperate hordes of online businesses was whether a processor could deposit their money into a bank account. And Tzvetkoff could, better than anyone else in the game. Tzvetkoff founded payment processing company ‘Intabill’, where he partnered up with high powered IT lawyer, Sam Sciacca. Sciacca not only brought his considerable legal expertise to the table, but he also added a professional sheen to Tzvetkoff’s raw genius. The fledgling start up swiftly attracted a host of new clients, who were particularly attracted to the duo’s professionalism in an industry that was often akin to the Wild West. To begin with, the business bubbled away without making waves. And then, in 2007, the online poker industry came calling. Sam Sciacca (left) and Daniel Tzvetkoff (right) At the time, it was an industry in crisis. Online poker had exploded in 2002 when amateur player Chris Moneymaker came from nowhere to win the World Series of Poker. Revenue surged from $87.5 million in 2001 to $2.4 billion by 2005, while one of the most successful sites, PartyPoker, floated on the London Stock Exchange for £1 billion. But the US government passed The Unlawful Internet Gambling Enforcement Act (UIGEA) in 2006 that prohibited banks processing money that was connected to it. The poker companies were suddenly unable to process their player’s wins and losses. The end seemed all but inevitable. Intabill stepped into the breach. Having sought expert legal advice, Tzvetkoff and Sciacca believed that they could solve the issues quickly, effectively and (most importantly) legally. Companies such as PokerStars, Full Tilt Poker, Ultimate Bet and Absolute Poker quickly jumped on board, employing Intabill to process their transactions. Soon the ex-Pizza Hut worker was handling almost every penny generated by online poker in America. Tzvetkoff embarked on an epic spending spree, earning himself headlines in Australia after buying one of the country’s most expensive properties. But he was also tempted by a proposal from brash, cigar chomping businessman, Curtis Pope. Sat in a Jacuzzi, on the back of Tzvetkoff’s yacht, Pope suggested that Intabill invest the poker money into his Las Vegas payday loan company. Pope’s proposal offered Intabill many benefits, not least turning a $30m investment into a $100m profit, the ability to disguise poker money as payday loan payments, and the opportunity for Tzvetkoff to move to Sin City with his fiancée, Nicole Crisp. Unleashed in Vegas, the wide-eyed kid from Brisbane rubbed shoulders with the likes of Mike Tyson, lavished extravagant gifts on friends and family (including a Ferrari for Pope), and splashed out over $150,000 on a party at The Palms hotel. Wall Street soon took note, with investors willing to plough over $100m into Tzvetkoff’s latest venture. It seemed that the party would go on forever. And then, in August 2008, Intabill lost a large chunk of money to a bank in Tblisi, which resulted in Tzvetkoff and Sciacca making a dramatic escape during a Russian air strike. Tzvetkoff's stock was falling, and worse was to follow. A number of banks froze Intabill’s accounts, and an associate was alleged to have stolen over $4m dollars. Almost overnight, Intabill transformed from a cash cow to a company haemorrhaging money. With Tzvetkoff continuing to spend wildly, repayments to the poker companies became increasingly intermittent. Despite trying to keep the ailing company afloat, Intabill was soon ripped from Tzvetkoff’s grasp when Pope, his trusted Las Vegas partner, struck a deal with the poker companies behind his back. Overnight Tzvetkoff lost everything: his clients, his company, his fortune, as well as someone he had once counted as a friend. Worse followed. As the bankrupt Tzvetkoff reeled from the betrayal, he was beset by a flurry of law suits, not least from Full Tilt Poker and his former partner, Sam Sciacca, who accused him of misappropriating funds. Tzvetkoff struggled to keep them at bay, but the web was tightening; at the age of 26, he found himself on his knees, in the lobby of Las Vegas’ Encore hotel, with the gun of an FBI agent pointed at his head. The legal advice that Tzvetkoff had operated on was wrong. In the eyes of the Department of Justice, processing for online poker in the US was a crime. Tzvetkoff was charged with money laundering and bank fraud. Facing the prospect of 75 years in jail, he played the only remaining card he had left and turned government informant, winning his freedom and also the opportunity to take down those he felt had betrayed him. Armed with information about the intricacies of processing for online poker and how money was mixed in with payday loans, The Department of Justice prepared to strike. And strike they did. On April 15, 2011 – a day now know as Black Friday in the poker world – PokerStars, Full Tilt Poker, and Absolute Poker were summarily shut down and their bank accounts seized. Players accounts were frozen and owners were indicted on criminal and civil charges. By this time Pope was already behind bars, serving 21 months in Miami; Sciacca was cleared of any wrongdoing and returned to law. As online poker burnt to the ground, anger quickly turned to Tzvetkoff, who was long enrolled in a witness protection programme. Rumours started to circulate that he had stashed millions of dollars away and had been pictured on a Bali beach, with his fiancée, sipping champagne. Tzvetkoff protested his innocence. A total of $50m remained missing, but no evidence existed to suggest he had the money. Tzvetkoff may have lived every young guy's dream, but it came at a horrendous cost, for him and for millions of online poker players. It seemed Tzvetkoff had forgotten Sin City’s cardinal rule, ‘What goes on in Vegas, stays in Vegas.’ |
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The Church Team was a card counting blackjack team that operated from 2005 – 2011. It was started and managed by Ben Crawford and Colin Jones. Over the years the team was comprised of approximately 30 investors, 40 players, and various levels of managers and trainers. The team was primarily based out of the Seattle area but had almost 15 players from the Cincinnati area as well as players from California, NY, Oregon, Nevada.
The team, at it’s highest point, was playing with $1.2 million of investors money and in the course of the 6 years won more than $3 million from casinos. The team would come together and meet quarterly in the Seattle area to discuss goals, business model changes, introduce new players, and test old players out. The team was put together as a series of LLCs that represented the management and investors and all wins were reported to the IRS. Although the team itself had no official religious goals or affiliation, the majority of the team members considered themselves Christians with a high percentage of them in paid ministry positions. The lineup included pastors, worship leaders, and church planters. Other jobs served before, during, and after include law enforcement, fire fighting, internet startup entrepreneurs, a lot of barista work, construction, music recording and a variety of other fields. Throughout the team’s existence various team members struggled with judgement from families as well as religious people and organizations, numerous run-ins with law enforcement, random security guards, the DEA, FBI and TSA (many of whom did not understand the legality or nature of advantage play or card counting.) The team dealt with wrongful imprisonment, theft, numerous searches, an IRS audit, and a seizure of more than $100,000 by the US government border patrol which was eventually returned. From 2007-2010 the team was followed with cameras and the footage was turned into a feature length documentary called Holy Rollers: The True Story of Card Counting Christians. In 2011 the team officially disbanded. In June of 2011 most of the players, investors, managers, and alumni came together for the first time at the release of the documentary at the Seattle International Film Festival. Players, investors, and managers shared their thoughts, sentiments, and stories from their involvement with the team. |
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It’s not often that you get a second chance in life. Thankfully for UK poker legend Neil Channing he got just that in 2007. After squandering a million pound fortune, built up through poker and sports betting, Channing was at his lowest ebb ever – deep in debt, and physically on the verge of dying.
Driven by his relentless work ethic Channing bounced back, building up a bankroll in low-stakes tournaments before hitting the biggest score of his life at the 2008 Irish Open to take him right back to where he started. Here is Neil Channing in his own words explaining how he managed to turn his life and career around… Downswing CLICK HERE for PokerPlayer's exclsuive Irish Open freeroll The worst times started in 2003 and went on into 2005. I was making lots of money from everything – poker, horse racing and I also had a day job working in betting. I was at the races all the time, playing poker as much as I could and working – I never slept. My bankroll got as high as £980,000 and I felt I was untouchable. Then it all started going wrong in the middle of 2003. I was betting around £4,800 every day on horses and had a bad run for four months where I lost every day, and was spending more and more money on pitches at the racecourse – me and my partner invested £600k in that venture before it collapsed and we eventually sold them on for just £30k. And just if I didn’t have enough things to gamble on at that time I lost £100k on the stock market! I was watching all my life savings go away. My £1 million was no longer there. I’d lost it all and now owed 36 people a lot of money! The only way I thought I could get out of it was to gamble some more. Life and death situation Get the FREE PokerPlayer Magazine App HERE I had a friend who gave me £10k to bet with and told me to be bold and fearless with it. I immediately lost £7k at the races and he just told me to punt the final £3k. I did and twenty months later it had become £380k! I never left my house and didn’t have a break except for the WSOP. I was playing poker three nights a week at the Vic, would order a bottle of wine, get pissed and play every hand. It was my release from my day job – I still broke even but was not playing well. The reason I was working so hard was to pay everyone back. I would withdraw £5k every week, give a little to my friend and pay £500 to eight different people I owed. In September 2005 I still owed £120k to various people. I was in a terrible physical state, I was up to 248lbs and living on takeaway food. I was depressed and agoraphobic – then one day I just collapsed in the Vic. I was rushed to hospital with acute pancreatitis and there was a good chance that I would die. I eventually got home, but I was ill. I had just £2k to my name, internal burning and if I bumped into somebody it might cause me to haemorrhage so I had to avoid busy places. I’d pop out to the Vic mid-afternoon as it would be quiet and stress free. I sat in the £30 tournament at 2pm and played every day – I was the biggest winner by far and when I got stronger I started hanging around for the cash games. I was getting healthier, winning a lot in the cash games and then I went to the Irish Open in 2008… Upswing Winning the Irish Open was life-changing for Neil Channing Winning the Irish Open was life-changing for Neil Channing Winning the Irish Open in 2008 was a life-changing event. I finished off paying all my debts at Christmas 2007 and was now a free man. I paid every penny I owed and that was really important to me. I have a working class work ethic and wanted to be able to look myself in the mirror and say I have cleared it all. I was one of the few UK players that always went to Vegas and I knew that I was well known in the UK community. In London I was the king of the cash games, and people thought I never lost. But when I won the Irish Open all of that multiplied by one hundred. More than the money, my ‘poker fame’ was life changing when I won the Irish Open. I remember being very relieved to win the money because money had been on my mind every day for five years. From having a million to losing it all I now had a second chance. I pissed away the first million and by a total freak – and winning a tournament like that with 680 players is a freak – I had most of it back. I played for a large percentage of myself, 82%, so it was pretty good! A perfect stake What it means was that I could play in the big cash games in the Vic. We had an average sit down of £12,000 now because the games were much bigger. It sounds a bit miserable but I actually ran like sh↔t in those cash games for the next 18 months! I played against Andrew Pantling in a £28,000 pot where I had a set and he hit a gutshot on the river with all the money going in on the turn. Then there was a hand versus Andy Black where I had Aces in a straddled pot – he moved all-in for £17,000 with pocket Jacks and hit a Jack. I still won about £100,000 that year but it felt like it should be a lot more. After the Irish Open I didn’t slow down, I kicked on. I started going mental with the staking. Staking James Akenhead was pretty incredible. The year before the November Nine he was the runner-up in a $1,500 WSOP tournament – I’d backed James in a ton of tournaments but couldn’t even remember if I had a piece of him in this one! So I finally asked him and he was like, ‘you f↔cking know it is!’ I went over to watch him play heads-up and I fell asleep! He eventually finished second and the very next day I was playing in a $1,500 event when he came over to me. He then threw $125,000 in chips to me across the table – the other guys on the table looked at us like we were mental! Confidence is a massive thing and I was buzzing after the Irish Open. I felt like I couldn’t be beat. |
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A Federal Bureau of Investigation bust in Las Vegas is highlighting connections among three of the most lucrative gambling worlds—Macau high-roller junkets, online sports betting and high-stakes poker.
U.S. regulators and an international sports watchdog say the combination is worrisome, given alleged organized-crime links and money-laundering risks in all three areas. The FBI in July raided luxury villas at Caesars Entertainment Corp. ’s Caesars Palace resort in Las Vegas, where some junket executives and their entourage took up residence during two big events this past summer: the World Cup soccer tournament in Brazil and a major poker competition in Las Vegas. Junkets—most prominent in the Chinese casino hub Macau—are middlemen that use underground banking networks to facilitate ultra-high-stakes gambling. For its monthlong stay, Caesars gave the group five villas at no charge, along with more than $90 million in casino credit, according to papers filed in Nevada federal court. The villas, which would typically rent for at least $25,000 a night, come with grand pianos and private pools, according to Caesars’ website. FBI agents descended on the villas after Caesars told authorities that the occupants could be conducting an illegal sports-betting operation, according to papers filed in the case. Some Caesars employees became suspicious after the group requested an unusual amount of electronics to “keep up on the World Cup,” the papers indicate. The casino had installed eight computers, more than 20 monitors, three television sets, DSL lines and Wi-Fi in one of the villas, for which 19 door keys were issued, a government filing said. Caesars hasn’t been accused of wrongdoing. On July 29, a federal grand jury in Las Vegas indicted eight people from Asia, including Macau junket figure Paul Phua, on charges of running an illegal sports-betting operation. Mr. Phua has had prominent roles in Macau junkets, owns one of the world’s biggest sports-betting companies, according to the FBI, and is a well-known high-stakes poker player who has helped build up the game in Macau. In addition, Mr. Phua has ties to organized crime, the FBI alleged in court papers. Nearly six weeks earlier, Mr. Phua had been arrested in Macau on similar charges and after his release from custody flew to Las Vegas on his jet, court papers say. Through his lawyers David Chesnoff and Thomas Goldstein, Mr. Phua denied he was involved in illegal gambling in either location and denied that he had any connections to organized crime. The FBI and U.S. Attorney’s office and authorities in Macau declined to comment. The alleged connections among junkets, poker players and sports-betting operations have been building for years as the three businesses grew exponentially. Junkets have long brought high rollers from China to play baccarat—their game of choice—at the casinos in Macau and acted as financial intermediaries by moving money across borders, making loans and collecting debts. Junket clients accounted for roughly two-thirds of Macau’s $45 billion in gambling revenue last year, and they have also become increasingly active in casinos around the world, including in Asia, the U.K. and the U.S. In recent years junkets also began wading into the world of poker, which hadn’t traditionally been popular in Asia. With high-stakes cash games and tournaments in Macau, they have attracted wealthy Asians, including Mr. Phua, and pros from the U.S. The FBI is concerned that some poker players get financial backing from junkets that authorities suspect possess criminal ties. The agency has been tracking the links between the two gambling communities, according to a person familiar with the matter. Soon after his arrest in Las Vegas, Mr. Phua and his son, who was also indicted, were bailed out by two prominent American poker players: Phil Ivey and Andrew Robl, according to court papers. Other poker players including Tom Dwan agreed to let members of the alleged gambling ring stay at their homes in their custody during the legal proceedings, according to court papers. A lawyer for Mr. Ivey said the U.S. poker player helped Mr. Phua because he is “a trusted friend from the days they first met playing poker.” Messrs. Dwan and Robl didn’t return requests for comment. In addition, records from Caesars submitted in the July case show that Mr. Phua’s associates paid the $1 million per-person entry fees for a poker tournament at another Caesars property for at least three players from outside the U.S. None of the poker pros were accused of wrongdoing. Alongside the internationalization of high-stakes poker, sports betting has also exploded globally, with at least $1 trillion in bets—legal and illegal—placed each year, according to Chris Eaton, executive director of sport integrity at the Doha-based International Centre for Sport Security, a nonprofit organization that advises governments, leagues and event organizers among others. Sports betting is widely prohibited in Asia and the U.S., and governments have stepped up their enforcement of the laws. Because of their ability to move large amounts of money across borders and evade capital controls, “junkets became one of the solutions to respond to Asia’s crackdown on illegal sports betting,” said Mr. Eaton, a former head of security for the Fédération Internationale de Football Association, or FIFA, the international body that regulates soccer. U.S. law-enforcement officials call junkets, sports betting and poker a dangerous combination that could enrich organized crime and facilitate money laundering. Sports betting can be used for money laundering because there are many illegal bookmakers and betting sites licensed in loosely regulated jurisdictions that don’t require bettors to identify the source of their funds, they say. Poker is considered an important money-laundering risk at casinos because players bet against each other rather than against the house, and because players typically capitulate without ever showing their cards, so it is harder for casinos to monitor the action, U.S. law-enforcement officials say. For example, a player could arrange to transfer illicit money to someone through a poker game by intentionally folding, even if their cards would have won the game. Five of the eight people indicted in the Phua case pleaded guilty and were fined and banned from the U.S. for five years. Charges against one of the defendants were dropped. Mr. Phua and his son pleaded not guilty. Mr. Phua, who had been an owner of the Star 888 Ltd. junket in Macau until October, according to Macau corporate records, also owns Philippines-licensed IBC Bet, which the Las Vegas betting ring used to process some of its bets, the FBI alleged. IBC is one of the world’s two largest online sports-betting sites, and often takes in more than $2 billion in bets per week, according to the ICSS’s Mr. Eaton. According to records the FBI says it seized from the betting ring, names matching some of the bosses of at least two major Macau junket operators—David Group and Heng Sheng Group—were among the ring’s customers. The group was also using companies linked to two other big junkets—Neptune Guangdong Group and Suncity Group—to process the transactions, court papers filed by the government indicate. Neither the individuals nor the junkets were accused of wrongdoing. Their representatives all declined to comment. |
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Falafel’s real name is Matvey Natanzon, but no one calls him that, not even his mother, who calls him Mike, the name that he adopted when they emigrated from Israel to Buffalo—one leg in a long journey that began in Soviet Russia. Now even Falafel calls himself Falafel.
Falafel was in Atlantic City to support a friend he calls The Bone, a professional poker player who was registered in a tournament at the Borgata. The Bone, who is from Ukraine by way of Brooklyn, used to play backgammon, but he switched to poker because there is more money in it. Falafel is either a purist, or unable to master poker, or too lazy to really try, or all of the above. He is committed to backgammon, which is his main source of income—to the extent that he can find wealthy people who want to lose to him in cash-only private games. There are more of these than one might expect, but not a lot. Finding them and hanging on to them is a skill. The jitney that travels between the Atlantic City hotels is run-down and slow, a horrible way to travel. Falafel would never take it. He can make ten thousand dollars in half an hour playing backgammon; he can make many times that in an evening—and he can lose it all just as easily. The money comes and goes. Currently, he has no home. He has no driver’s license. Until just a few months ago, he had no cell phone, no bank account, and no credit card. Pretty much everything that he owns can fit into a large black suitcase. Still, he allows himself certain luxuries, and one of them is to hire a car rather than sit in a jitney. Falafel had promised that he would be in the Borgata’s poker ballroom, and when I arrived, at four-thirty on a gray January afternoon, the ballroom was half empty. To the non-gambler, the interior of an Atlantic City casino is in no way a place of obvious joy. For Falafel, who wanted to dabble in a few quick hands while he waited for The Bone, the atmosphere was energizing. He is a big man, both in the tall way and in the overweight way, and he was dressed to relax: a soccer jersey with the logo of a Turkish cell-phone company on the front, and on the back the number seven and “FALAFEL.” Propped up on his head was a yellow knitted cap, giving him the appearance of an oversized garden gnome. Nylon shorts extended below his knees. Fiddling with a dumpy black cell phone, he looked up, smiling, and asked, “How did you recognize me?” Falafel is typically unshaven, but the stubble is not forbidding, and his face easily fills with warmth. In 2005, an Israeli filmmaker made a documentary about him, called “Falafel’s Game.” In a scene filmed late one night in his hotel, Falafel says, “I’m like a kid inside. I feel like a kid—in my principles, the way I think about things.” He is forty-four. He has known hardship: he once lived on a park bench. Pickpockets have stolen from him. Lowlifes have taken advantage of him. He has learned to be streetwise, but something kidlike remains. He lives life as if it were a game. Falafel bought three hundred dollars in chips and sat at a table. Soon the piles before him were getting taller. He attributed this not to his skill at poker but to his gambling instincts, which are formidable in some circumstances (backgammon, mainly) and horrendous in others (sports betting, mainly). As he played, he glanced at the cards occasionally, but mostly he jabbered. When an elderly man in a leather jacket sat down and, by coincidence, began to talk about backgammon, Falafel could not contain himself. “Oh, you play?” he said. “I like to play, too.” The man nodded. A round of cards was dealt. “You know,” Falafel said, “I’m the No. 1 backgammon player in the world.” He glanced at a card. “None of you could beat me.” A skeptical player wearing a Miami Dolphins cap picked up his smartphone to verify. To his left, another old man asked, “Is it in the Google?” “I’m checking,” the skeptic said. “I’m just getting a lot of restaurants.” The dealer slowed play, so that the matter could be resolved—which it quickly was, generating a wave of smiles. Suddenly, a celebrity was among them. “O.K., Mr. Falafel,” the dealer said. “What will it be?” In two hours, Falafel was sitting behind five hundred dollars. Things were looking up. “A year ago, if you found me then, my life would have been so much different,” he said. For a time, Falafel was living in Las Vegas, with a roommate—a young backgammon whiz whom he calls Genius or Lobster, depending on his mood—but he rarely left the couch, where he watched sports, and watched the money that he bet on sports disappear. Now he saw opportunity. “This year, I am travelling a lot, playing more backgammon,” he said. From Atlantic City, Falafel was planning to go to a tournament in San Antonio, and then there were trips to Los Angeles, Israel, Denmark, and, in August, Monte Carlo, for the world championships. In each place, the prospect of cash side games lay in wait. An Internet gaming site was interested in coöperating with him. He had taken on a student. Falafel was filled with a sense of purpose. He was ready, he told his friends, to turn his fortunes around. “We should go now,” Falafel said, as he cashed out; he needed to find The Bone, who was finishing a round in his tournament. The two men met in the mid-nineteen-nineties, when Falafel was in New York, living in Washington Square Park, and playing chess. The Bone, whose real name is Arkadiy Tsinis, is tall and thin. He is a disciplined gambler; recruiters from Wall Street have tried to bring him into their game. “That’s him,” Falafel said, pointing to a man wearing a floppy leather hat and sunglasses perched on an aquiline nose. The Bone was locked in a stare-down with another player. The visible portions of his face were impassive. Eventually, with only a few chips left, he folded. Falafel tried to cheer him up as they walked over to an all-you-can-eat buffet. Falafel’s homelessness was of his own making. In 1972, when he was four, his mother, Larissa, fled Soviet Russia (and Falafel’s father), moving to the Israeli town of Azor, near Tel Aviv. In Falafel’s memory, Azor is ever warm and sunlit, filled with soccer matches and schoolyard friends. Larissa worked long hours at the airport, and so Falafel was often free to do as he liked—until he was fourteen, when she told him that she was marrying an Israeli-American biophysicist, and that they were moving to Buffalo, to live with him. Falafel resented the move. Buffalo was cold and foreign. He didn’t know the language. His stepfather, a Holocaust survivor, was caring but stern, and pushed him to think of life in pragmatic terms. Falafel rebelled. He did little but play chess; he drank, and even went to school a little tipsy. He went to college halfheartedly, and after graduating he lost his savings by betting on sports. Larissa refused to help him unless he found a job, and so, instead, in the winter of 1994, he hitched a ride with a friend to Manhattan, to hustle chess. “I just went through the motions,” Falafel says. “My only thing was to make a bit of money so that I could survive.” Falafel knew little about Washington Square Park—a Hobbesian gaming arena in the center of Greenwich Village. “I called it Jurassic Park,” The Bone said. Some of the chess players were fast-talking charmers; some had learned the game in prison. There was Sweet Pea, Elementary, the Terminator. When well-known fish—players of middling skill with money to lose—would turn up, a frenzy would erupt to vie for their action. Falafel became friendly with a wizard at blitz chess named Russian Paul, who adopted a half-mentoring attitude, involving avuncular insults about Falafel’s game or his laziness or his self-destructive habits. “I can tell you how I discovered him,” Russian Paul says. “I used to play at my favorite table, and one weekend morning I came, and there was somebody snoring, sleeping under it.” He hired Falafel—two dollars every morning—to hold his table for him. Before long, Falafel was playing, too. By the standards of the park, where grandmasters sometimes stopped by, Falafel was in no way exceptional—“Stupid, stupid, that’s stupid,” Paul would mutter as he played him—but he enjoyed the camaraderie of the hustlers. Two dollars was enough to get him a falafel, which he ate every day, often for every meal. One night, Russian Paul found him passed out with patches of deep-fried chickpeas stuck to his face, and the park’s newest hustler earned his street name. H. G. Wells once said of chess, “It annihilates a man.” But Falafel wasn’t seeking annihilation; he wanted a way out of his self-made chaos. On a good day, he might win thirty dollars, but he lacked the easy duplicity of the more ruthless hustlers. “He does not like deception,” Peter Mikulas, a former N.Y.U. employee who used to play in the park, says. “He’s a Big Daddy, from ‘Cat on a Hot Tin Roof.’ Mendacity, falseness—it bothers him.” Some of the men in the park played backgammon, which, Falafel noticed, could be far more lucrative than chess. He once watched Russian Paul beat an N.Y.U. student out of a hundred dollars. Falafel had no real understanding of the game, but he was cocky and insistent, and so he sat down to play Russian Paul, who told me, “I learned how to play backgammon two weeks before him, so I took all his money.” With other players, Falafel lost relentlessly. One told him, “Listen, you just don’t know stuff. For thirty dollars an hour, I’ll teach you.” Falafel insisted on playing him for fifty cents a point. Soon he was a hundred and forty points behind. Backgammon is sometimes called the cruellest game. In 2008, during a snowy November outside Moscow, two strangers played on a board that one of them had carved in a labor camp. When the match ended, the winner got up, walked out of the room to get a knife, and then made good on their wager: “We had agreed to play backgammon—whoever loses dies,” he explained at the time of his arrest. He was drunk-seeming, and probably a psychopath, but the story has come to serve as a parable in extremis of fortunes lost and won over the board. People have made hundreds of thousands of dollars in single sessions; one expert player lost his home. Bruegel painted the game into his apocalyptic panorama “The Triumph of Death.” Unlike chess, backgammon is tactile, fast-moving, even loud, with checkers slammed down and tiny dice sounding like rattlesnakes as they traverse the board. Casual players who believe that they are good persist in the illusion because the element of chance obscures their deficits. At its heart, backgammon’s cruelty resides in the dramatic volatility of the dice. Even a player who builds flawless structures on the board can lose to a novice. The good players simply win more often. As a result, backgammon is often played in marathon sessions that reward physical stamina, patience, and emotional equilibrium. One notable match lasted five days, with both players getting up only for bathroom breaks. The loser fell to the floor. Like many who have become hooked on the game, Falafel found the omnipresent possibility of winning seductive. After living in the park for half a year, he moved into a tumbledown gaming club near Wall Street, a no-name place run by a gambler called Fat Nick. Stock traders would come. An associate of Vinny (the Chin) Gigante would come. Falafel slept on a recliner, and played whoever would sit with him. He also began turning up at the New York Chess and Backgammon Club, in midtown, where hard men from the Colombo crime family mixed with working stiffs and professional gamblers, and a caged white dove called Squeeze Bird watched over them all. He kibbitzed and tried to hustle opponents into playing “positions”—arrangements on the board that contain a hidden advantage. When he was not playing, he would collapse into sleep wherever he was, and snore loudly. “You couldn’t tell him, ‘It’s time to go home,’ because he didn’t have one,” a player told me. Falafel lost a lot, but he also improved, and began making a few hundred dollars here and there. When Fat Nick’s shut down, he returned to the street, or he slept at the White House, the last of the Bowery flophouses. One night, he recalled, “I was asleep, and a guy next to me was able to reach into my pocket. He took fifteen hundred dollars, and left me two fifty-dollar bills. Maybe he missed it.” Falafel’s friends urged him to get off the street. One found him a room, but he could barely pay the rent. Then fortune turned his way, with the arrival of one of the game’s most famous fish, a wealthy French philatelist, Internet entrepreneur, and fraudster known as Marc Armand Rousso, or, in the world of backgammon, as the Croc. He was an eccentric—at the board, he would sometimes mutter, “Yum, yum, yum, yum, my little crocodiles,” Falafel recalled—and, more significant, he was a terrible player with satchels of money to lose. “He comes in, and he loses a hundred and fifty thousand dollars cash in half an hour,” one opponent told me. “Then he leaves and comes back two hours later for more—but now, instead of money, he’s come in with fifty pounds of gold!” Falafel played the Croc a little, but mostly he bet on the Croc’s opponents, including a skilled player named Abe the Snake. In a few months, Falafel won enough money to buy a small apartment, had he desired one. “I picked up some pants—I wanted to put something in the pocket—and I reach in and I find four thousand dollars,” he told me. “I didn’t even know it existed. That’s how good it was.” When he was homeless, Falafel had promised himself that if he ever made enough money he would return to Israel. “I wanted to get back and feel some love and warmth and affection and some closeness,” he told me. He yearned to be married. But ever since his arrival in Buffalo he had been shy with girls, and while he was living on the street relationships were no easier. For several years, he rented a place in central Tel Aviv, and in 2001 he got in touch with a girl he had known in middle school. But things didn’t work out. Relocating the warmth was not so easy. Falafel took to spending fifteen hours a day online, playing backgammon, with the shades drawn, determined to master the game. Clothes and trash piled up. He ate and ate and gained weight. Sometimes he played at a dingy backgammon club nearby. “I saw Falafel there, this big fat guy with his baseball hat backward, playing this big, dark-skinned Israeli guy,” a friend says. “They were playing high stakes, a hundred dollars a point, and the room was packed with people. It was a gladiator fight, you know, just alive, in a place you would least expect it. Falafel, with his special looks—he just looks like an idiot, and everybody here was thinking that he’s just a rich American **** who is going to donate. And Falafel was teasing everybody. He told them that they are all idiots, and he is going to take all their money. And, the thing is, Falafel cleaned up the club. He just cleaned everybody up, and people were going insane, and the stakes got higher. He had everybody play against him. He said, ‘You can consult, because you’re so bad it doesn’t matter. I want to hear all the stupidity.’ And they would basically want to kill him, because he took their money, he took their pride, and he was really, really cocky.” Every two years, the top backgammon players around the world vote to pick the best of their peers, for a roster called the Giants of Backgammon. In 2007, Falafel was No. 1. “At some point, he woke up and became the best player in the world,” Elliott Winslow, a top player, told me. The title is unscientific, and often debated, but no one could contest that Falafel had achieved greatness. “We can never know for certain who is the best player in a given year, but we can confidently eliminate 99.99 per cent,” Jake Jacobs, the roster’s auditor, says. “Falafel survived the cut.” Falafel reacted to the news humbly, citing other players he thought were more deserving. “I didn’t end up making a living as a backgammon player by accident,” he said at the time. “I couldn’t function properly in the ‘normal’ world.” Cartoon “The art lady came in and told me all people want is derivative crap.” BUY THE PRINT » Falafel is intensely loyal to the people who befriended him in Jurassic Park, and at the Borgata he decided to stay in Atlantic City for as long as The Bone could keep up his run—even if it meant delaying his trip to the backgammon tournament in San Antonio, which was about to begin. When I called Falafel to see if he was going to make it to Texas, the best he could say was “I rate it a favorite.” Backgammon is a highly probabilistic game, and Falafel’s world is rarely defined by certainties. I booked a ticket not knowing for sure that he would show. The tournament was held in the Menger Hotel, a dusty old building just opposite the Alamo. When I arrived, after 11 P.M. on the first day of play, Falafel had not yet turned up. In a small conference room, a couple of dozen people were milling about, and a few matches were still under way. One was between a Bulgarian man from South Carolina, Petko Kostadinov, and Ed O’Laughlin, an older player from Virginia. Kostadinov—compact, with neatly parted graying hair—was intently focussed on the board. O’Laughlin, a wiry man, was dressed all in black, and his legs were folded up in his chair like crushed origami. He moved his checkers in abrupt jabs, then touched the pieces as if to confirm their solidity. In the past half century, backgammon tournaments—like backgammon itself—have undergone a profound transformation. The game, which has been around in some form since the time of the Pharaohs, is most popular in the Near East, and in the nineteen-twenties it became a popular club game in the West. In the sixties, the game acquired a certain glamour. Lucille Ball played, and so did Paul Newman. The world championships were black-tie—though many competitors were mediocre, a condition that soon attracted the attention of genuine gamblers, who set out to unlock the game’s money-making potential. Backgammon is far more mathematical than chess, but, while chess has a literature that dates back centuries, backgammon had no real theory until the nineteen-seventies, when gamblers at New York’s Mayfair Club began to take the game apart systematically. Chess players can visualize what the board might look like twenty moves ahead, but in backgammon the dice offer twenty-one random possibilities at each turn. The game must be encountered frame by frame. The players at the Mayfair drew up tables: If one checker is twelve slots from another, there are three ways to attack, and an eight-per-cent chance of doing so successfully. They rolled out positions, playing every permutation to identify the best move. Rollouts could take hundreds of hours. Players attempted to calculate, at each position, their game “equity”—the more the better. By shaving off any trace of error, they could hedge against the chaos of the dice. To the uninitiated, they undoubtedly seemed astoundingly lucky. The Mayfair denizens won a lot of money, until their skill became too conspicuous. For players of Falafel’s generation, the early theories were given a tremendous advance in the nineteen-nineties, when an engineer at I.B.M. figured out how to apply neural-network computing to the game. The laborious rollouts were no longer necessary. One of the old Mayfair hands, Jersey Jim Pasko, a bodybuilder with a math degree, told me, “I’m spoiled. I want to do a lot of mathematical analysis, and I don’t want to allow anybody else to do any.” He said that many new players came into the game with a single-minded desire to make money, and lacked any sense of style and social grace, so he had dropped out of the circuit. In San Antonio, while Kostadinov and O’Laughlin played, an official observer with a laptop computer entered their moves into a program that can roll out thousands of possibilities in seconds and calculate errors to three decimal points. Many younger players assume that its judgment is close enough to perfect. Michihito Kageyama, a former McDonald’s employee from Japan who is now fourth on the Giants of Backgammon list, told me that he had created a database of ten thousand positions. He reviews thirty a day on his Kindle, as a morning exercise. Falafel has no patience for memorization. Because he is undisciplined, he regularly makes small mistakes early on, but in the complex middle game—where checkers are spread out in ambiguous arrangements, and the differences between plays can be hard to measure—he excels. “He’s very special,” Kageyama told me. “He doesn’t calculate equity. He’s just seeing it.” Perry Gartner, the president of the United States Backgammon Federation, put it this way: “Truthfully, out of the top sixty-four players that I know, there isn’t anyone who has his intuitive understanding of the game.” I should have bet on Falafel: by the time the main tournament in San Antonio began, he and The Bone had arrived. The event was held in the Menger’s Grand Ballroom, though most of the attendees—a hundred and thirty people—were middle-aged men in T-shirts or casual wear. “Backgammon used to be a lot more glamorous,” one of the few women there told me. Falafel was wearing red Air Jordan sweatpants, a black-and-white plaid shirt, a green hoodie, and his yellow cap. His first opponent was Carter Mattig, a sound engineer from Chicago and a jocular trash-talker. Looking at Falafel, he said, “That’s quite a color combination he’s got today,” and that afternoon he posted a photograph online of Falafel in the ensemble, titled “The Angriest Elf.” Falafel was sore about it for days. The two men found an empty spot at one of the folding tables that filled the room. When Falafel plays, his manner is casual but focussed—unless he is losing, in which case his head droops as if it were filled with sand, and his body curls over the board. If an inferior player beats him, he might say, “He played horribly.” When Falafel wins, he is not always gracious, and he often seems unaware of his lack of tact. Once, on a backgammon forum, Mattig wrote, “I do vomit a little in my mouth when he speaks of his ‘modesty.’ ” As a few spectators looked on, Falafel played Mattig, who put in earbuds and listened to music—to block out Falafel’s “crying,” he said. The play was brisk, and with each move Falafel, like all the Giants, was looking for fractional advantages. For most people, it is difficult to see the difference between a superlative player and a very good one. Later in the tournament, Jeremy Bagai, who is No. 40 on the Giants list, pulled me aside during a game between two competitors who were playing at an exceptionally high level. “I haven’t seen anything like this,” he said. As a computer made clear, each move was just marginally better than the one Bagai would have made, but the aggregate effect was undeniable. Backgammon is a game of nano-distinctions. Falafel beat Mattig, 5–4, and afterward a debate arose over one of his moves: was it mathematically correct, or had luck aided him? “I would be happy to bet on this, Falafel,” Mattig said. The stakes were set at fifty dollars. The position was entered into a computer, and players crowded around the screen. “Oh, the move is right!” Falafel called out. “You owe me!” “Wait, where is the move right?” Mattig said. “Right here,” Falafel said. “It’s significant. It’s like one per cent.” Falafel called Kageyama over, showed him the position, and asked him what he would do. Kageyama gave the same answer that Mattig had, and Falafel nodded, smiled, and told him, “That’s a mistake.” Falafel was slowly making his way upward in the brackets. He had an easy time against Gary Oleson, a Walgreens pharmacist, who had come dressed in a black nylon shirt featuring a dragon strangling a tiger. While Falafel was up, 2–1, it was announced that the tournament would break for dinner. He stood and stretched, which emphasized his hemispherical belly. “So is it true you have a bet to lose weight?” O’Laughlin asked him. “Yeah,” Falafel said. At any given time, Falafel has more bets going than he can keep track of. He has bet on his abilities at tennis, on his dancing skills, on whether he can win an argument about Islam. (Many bets are for a thousand dollars—a “ruble,” in Falafel’s lexicon—or much more.) When he was thirty-eight, Falafel bet five rubles that he would be married in two years. (He lost.) In San Antonio, he told Perry Gartner that he had a long-standing bet: for every day he did not have a child before turning fifty he owed someone five dollars. Gartner, perplexed, asked how that was even a bet. “Right,” Falafel said. “My downside is unlimited. But it is going to happen.” Lately, it seems, Falafel has been trying to bend a vice into a virtue—and no bet has more potential in this regard than his weight bet. “So what is it?” O’Laughlin asked. “A lot of money?” A woman walking by answered: “It’s for a ton of money!” “Thanks,” Falafel said. “Well, what is it?” O’Laughlin said. “A thousand? Ten thousand? A hundred thousand?” Falafel, who has a gambler’s habit of speaking evasively, cradled his belly. “It’s for money,” he said. The weight bet originated last October, when Falafel flew to Tokyo to play in the Japanese Open. One night, he and several other backgammon players were crammed into Sushi Saito, a three-star Michelin restaurant that seats only seven people. A question was posed: Could Falafel and his ex-roommate Genius achieve the same weight in a year’s time? By then, Falafel, who was enduring a difficult stretch of sports betting, had reached three hundred and ten pounds. Genius, who has a slight frame and is four inches shorter, weighed only a hundred and thirty-eight. The question began to take on the contours of a wager, and the next day a taker emerged willing to give them fifty-to-one odds. The taker is a legendary backgammon hustler, perhaps the must successful in the game’s history. He hustled me into referring to him only as Mr. Joseph—even though anyone on the backgammon circuit will immediately recognize him. He has played Saudi royalty, and he claims to have won as much as three hundred thousand dollars in a match. He once told another gambler, “I used to say I’d like to have a hundred-thousand-dollar day. I’ve had those, both winning and losing, many times since then. Now I say I want a million-dollar losing day, which means I am wealthy enough to have a million-dollar winning day.” His bet with Falafel might help him lose tremendously. No one involved is keen to see its magnitude documented, so just imagine the contents of a large armored suitcase in a James Bond movie. Mr. Joseph was in San Antonio, too. An enormous man, he was dressed in a black T-shirt and shorts, and, when Falafel and The Bone walked over, he and Genius were playing a variant of backgammon involving only three checkers, for five hundred dollars a point. He told Falafel, “You never win in tournaments. The Bone wins. He knows how to win. You find a way to lose to the worst players.” “I want to win, too,” Falafel said. “But sometimes I get into a spot.” The Bone interjected, “It’s going to change now that he is losing weight.” “I play better if I am in better shape,” Falafel said. Since Sushi Saito, he had lost about sixty pounds, and Genius had gained twenty. Just about any time I ran into Genius, he was eating a J.J. Gargantuan Unwich sandwich (seven hundred and thirty-nine calories), from Jimmy John’s. Mr. Joseph was unconcerned; he seemed to take pleasure in the bet’s manipulative aspects. In 1996, he told another player, Brian Zembic, that he would give him a hundred thousand dollars if he got breast implants and kept them in for a year. Months later, Zembic got them, size 38C, and, to everyone’s surprise, he liked them. They helped him meet women, and he ended up marrying one of them. A year came and went—and a hundred thousand dollars was wired to a Swiss bank account—but still he kept the implants in. Once, when Falafel came to visit, Zembic unbuttoned his shirt and danced. Falafel smiled and blushed. In his own way, Falafel wanted to be transformed, too. He wanted to be healthier, more mindful, more purposeful. “My life, I just got into a situation,” he said. “Some of the hardships I endured, I did so without realizing that they were hardships. I should have a family. That is a big missing part of my own puzzle.” Once, in an airport, Falafel sat next to a rabbi, and asked him for his thoughts about gambling. The rabbi said that it was not prohibited, but that a life of gambling was unsanctioned by God. Falafel told me, “I see religion for what it really is: just a bluff,” but he couldn’t get the interpretation out of his head. One evening, outside a casino bathroom, I saw him stop a young bearded man in a yarmulke and say, “I have a question for you: Do you know what Jewish law says about gambling?” The man was taken aback. It didn’t matter—Falafel was already answering. “I think it is that you can gamble, but that you can’t earn a living from gambling. Is that it?” At the Menger, Mr. Joseph had rented the Presidential Suite, and on Super Bowl Sunday he filled it with food and with backgammon players. By then, the tournament was over. The mood was relaxed. Falafel had lost in the semifinals, to a longtime player from Texas, and he had been upset. But now, in Mr. Joseph’s suite, the loss was easily forgotten. There was the Super Bowl to distract him—he had bet many rubles on the Baltimore Ravens. And there was his weight. He stood near an elaborate buffet that Mr. Joseph had arranged. “You can eat this,” a player from Germany said, pointing to a tin of celery. Falafel already had a stalk in his mouth. He took a few carrots and a bottle of mineral water and walked over to a couch. A plate of cheesecakes was set down in front of him. “Those pies,” Mr. Joseph said, casually. “Have one of those pies.” “No,” Falafel said, cradling his belly. “I can’t.” “I’ll give you fifty bucks right now to eat one of those pies,” Mr. Joseph said, pulling out a crisp bill. “How many calories?” Falafel said. “Thirty,” Mr. Joseph said. “Bullshit!” The Bone said. Falafel looked at the money and hesitated. “Jeez,” he said. “You’re giving me a fifty?” But he held his ground. It used to be that tournaments were the center of big-money side games, but these days the few players who make their living from backgammon must look in deeper waters for big fish. Before leaving the Menger, one top player told me in hushed tones that he was going to see a billionaire who puts him up in a hotel near his house so that they can play all-night games for a thousand dollars a point. The billionaire is so obsessive that he can play for fifteen hours uninterrupted; the player told me he had to bring a friend to cover for him during bathroom breaks. From Texas, Falafel and The Bone headed for Los Angeles, where they rented a business suite at a Manhattan Beach hotel. Word had been quietly circulating about a group of wealthy amateurs playing for enormous stakes. Not merely fish—a pod of whales. Who would they be? Ted Turner? Carl Icahn? George and Barbara Bush host a private tournament at Kennebunkport. One of the most-read books in the Bush family is “Backgammon for Blood,” a handbook from the nineteen-seventies. (“Unfortunately, that’s one of the worst books,” a mathematician told me. “It was written under a pseudonym, and some people say it was intentionally bad so that people reading it would play worse.”) Falafel thought he could find a way into the action from the West Coast, but he was fanatically secretive about what he knew. The money was too big—too important to his future. “This is a fantasy,” he told me, by which he meant that the games were just an ephemeral opportunity, a blinding spark. Falafel’s hotel was a favorite of Jersey Jim’s, who had also come, with his wife, Patty. Every day, they went across the street to a gym the size of an LAX hangar. Falafel was relying on them to help him lose weight. But he did not want to lift, or run, or exert himself intensively. Instead, he decided to restrict his diet to a thousand calories per day, and to walk. Jersey Jim and Patty worked on him until he agreed, at least, to climb the Manhattan Beach dune: a steep, two-hundred-and-seventy-foot incline near an Army Reserve facility, where athletes like Kobe Bryant come to work out. On the morning that Falafel and The Bone arrived, a lean man with bleached dreadlocks, shirtless and deeply tanned, was doing yoga on a blanket at the base of the dune. Falafel looked a little intimidated. He watched as The Bone began striding up the incline and then slowed down. “Gee,” he said. “The Bone, he’s realizing that it takes a lot of energy.” Patty turned to Falafel. “This is how you lose weight,” she said. “Yeah, for sure,” Falafel said. He gazed at the hill uncertainly. At his last weigh-in, he was two hundred and forty-five pounds. But things were looking up. He had won on the Super Bowl. He was flying back to Israel to attend a wedding, and to spend some time near his childhood home. Then he was off to Copenhagen, for the Nordic Open—informally known as “Denmark vs. the World.” Falafel, who was captaining “the World,” was putting together an international team, and hoped to bring in Genius and Abe the Snake. The whales seemed increasingly within reach. Squinting in the bright Los Angeles sun, Falafel pushed his feet into the hot sand. Slowly, he began to climb. |
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Who in fact was Pete Tan Hoang? Some knew him as a modest Vietnamese waiter. In the casino circle he was best known as being a high roller. He progressively become a professional money launderer. He laundered over a billion dollars in Australia's casinos and did this for over a decade. Hoang progressively aroused enough suspicion to capture the attention of the Australian authorities.
It became obvious that what appeared to be legal casino winnings were actually drug money. Then after a furtive affair with the Australian justice system in 2012, Hoang became the victim of his misdeeds; He was gunned down, with a shot to the head, in what appeared to be as mob-related shooting. From humble beginnings In the day time, Pete was probably just an ordinary guy, who seemed to be living off welfare and his meagre salary as a waiter. Pete was a co-tenant in a modest Bankstown apartment. He drove a vintage-type sedan. Nothing seemed more normal for this Vietnamese-born orphan living on a refugee visa. At nights though, things got a little fairy-tale like. He was transformed into well-known high roller who gambled and laundered millions of dollars in Australia’s glitzy hotels. However his double life was publicly exposed when 36 year old Hoang was viciously murdered by a shot in the face while lurking in a dark suburban Sydney alley. Then it all became public, and Australian gambling news reporters had a field day. It turned out that Hoang wasn’t just a known gambler at casinos. He actually money laundered for narcotic mobsters, gambling away millions over a ten-year period. Most of the gambling and money laundering took place in Australia's biggest casino, the Crown Melbourne. Hoang, born in Vietnam in 1997 became an orphan. Twenty years later he arrived on Aussie shores on a student’s visa. In order to stay in the country he applied for a student visa with an Indonesian passport showing his name to be Petrus Keyn Peten. Applying for refugee status, he changed his name to Minh Tan Nguyen and was granted Australian citizenship in 2001. Pete Hoang, ‘person of interest’ By the time Hoang became a citizen, he was a regular figure in Australian poker rooms and casinos and was soon banned from Sydney's casino, The Star. Then in In May 2012, not only was he banned again from the same casino but he was also banned from Jupiter's Casino in Brisbane. It became obvious by then that he was dealing with a very ‘high proportion of gambled funds” which had to “other people's money at casinos under instructions” says Michael Purchas, head of was dubbed the ‘Operation Gordian’ by the Australian Crime Commission (ACC). Narcotics investigators started to consider him as a ’person of interest’. Michael Purchas, who headed the Gordian operation, spent months observing Vietnamese-Australian criminals, including Hoang, who sold drugs and laundered the profits. Between 2005 and 2006 the ACC operation revealed that Hoang was good at eluding the police even though he was suspected of heroin and other illegal drug trafficking. Only a handful of small group Vietnamese-Australians were arrested for laundering about $93 million in drug profits in a year. Later, it became obvious that Hoang was actually involved with several Vietnamese-Australian drug trafficking syndicates in Sydney and Melbourne. Finally, in October 2012, he was arrested at the Crown Casino, as he tried to gamble an extravagant $1.5 million in cash on high stakes. It was later made known that Hoang had accumulated $75 million worth of chips at Crown in 12 years from 2000. This corresponded to around $225 million, or as much as $1 billion being laundered. Murder linked to money laundering Mick Willing, New South Wales Police homicide squad commander, proclaimed that it was highly probable that “Hoang's background in drugs and Asian organized crime syndicates played a role in his death...We have certainly considered that he was involved in drug trafficking and moving money through casinos - [that] may have been a catalyst for his death". Aussie Law enforcement officials suggested that Hoang was indeed involved with Ong Ngoai, a Hong Kong-based crime group that dealt in global drug trafficking. It had an illicit network stretching from Asia, to North and South America, with an Australian connection. Australian police also revealed that the Vietnamese narco-group also had links with 24 dozen drug syndicates. Investigators also said that Hoang’s ‘remarkable gambling patterns’ at the Crown Melbourne made the casino come under scrutiny. Hoang gets royal treatment under the Crown The casino seemed to approve of Hoang playing under four different names – Pete Hoang, James and John Ho and Patrick Lu. He was showered with perks and benefits ranging from business class flights from Sydney, a villa in the Crown Towers, free food and alcohol, to minimum $1 million buy-in, as well as a cut of gambling turnover, in the form of cash gifts, amounting to $100,000. Although under Australian gambling laws, Crown had to reveal Hoang's transactions to federal authorities; it all but refused to comment on these exclusive gifts. However Crown assured everyone that it was fully cooperating with state and federal law enforcement agencies concerning Mr. Hoang. |
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Let's move up to date.
On Tuesday in the United Kingdom, United States law enforcement arrested futures trader Navinder Singh Sarao and froze more than $7 million of his assets in banks around the world. The Department of Justice says that Singh manipulated commodities markets and partially caused the May 6, 2010 “Flash Crash” that sent the Dow Jones Industrial Average plunging 1,000 points in minutes. Sarao’s Flash Crash involvement is a nice news hook and Michael Lewis, who wrote the book about this kind of thing in Flash Boys, should have a lot to say about it. But, keep this in mind: Sarao traded for more than four years after the Flash Crash, utilizing the services of futures exchanges that are meant to serve as the frontline of industry self-policing. The Flash Crash was gone in an instant (stock prices recovered that day). This alleged market manipulator operated for years. Not only did he temporarily crash the stock market, but he was free to do it again. The commodity at issue here are futures contracts tied to the S&P 500, the most liquid of the U.S. stock indexes. The government’s criminal complaint describes these contracts as “one of the most popular and liquid equity index futures contracts in the world.” Sarao is said to have made $40 million in profits by manipulating markets between 2009 and the spring of 2014. That’s a lot of money, but by global market standards, Sarao is a small player. The government will have to prove that such an insignificant market participant can have such a large effect on prices. Not only did he temporarily crash the stock market, but he was free to do it again. But in a world where speed rules, size matters much less. According to the criminal complaint, Sarao used specialized trading software to place large buy and sell orders and had preprogrammed his systems to adjust and cancel most of his orders so that they were never executed. When Sarao wanted to drive futures prices lower, he placed large sell orders. If prices fell towards his asks, he moved them or cancelled the orders before they were filled. Similarly, if he wanted to drive markets higher, he bid high and then moved the bids or cancelled them before he’d have been required to pay up. The practice of placing fake bids is known as “spoofing.” The government says that Sarao could do all of this in fractions of a second. The size of Sarao’s spoof trades, says the complaint, were much larger than the typical trade sizes of other investors. Sarao typically bid for between 200 and 900 lots of contracts at a time. To put that in perspective, the average market sized order is for 7 lots. Basically, Sarao was a minnow disguised as a humpback whale. He concentrated his trades in the E-Mini S&P 500 Futures Market where contract sizes are 1/5th the size of the standard S&P 500 futures. These are instruments for smaller investors. On the day of the Flash Crash, says the complaint, Sarao’s spoof trades accounted for 20 percent of the imbalance between selling and buying pressure. The government contends that the selling pressure from the E-Mini futures markets spilled into other derivatives markets and into the stock market itself. That’s where the real, large, fast-moving players and their trading algorithms cascaded towards failure. One interesting aspect of the futures markets is that they are self-regulated by exchanges, in this case by the CME Group. The exchanges exist to make sure that participants live up to their promises. If I sell you $1,000 barrels of oil to be delivered a year from now at $60 a barrel, the exchange makes sure that you get what was promised—even if the price of oil has risen. Exchanges do this by forcing contract holders to post collateral but can also ban shirkers and other bad actors. But Sarao seems to have uncovered lax monitoring by the CME Group and other exchanges, the government says. Gregory LaBerta, the FBI agent whose affidavit accompanies the criminal complaint, says that Sarao was contacted by various exchanges in 2009 and 2010, questioning his cancellations of large orders. Sarao responded that he “frequently canceled large volumes of orders but falsely asserted that he did so manually, without the assistance of an automated trading program.” On the day of the Flash Crash, the CME Group wrote to Sarao that, “all orders entered into Globex during the pre-opening are expected to be entered in good faith for the purpose of executing bona fide transactions.” Four days later, Sarao told his broker that he had responded to the CME and “told ‘em to kiss my ass.” Sarao went on to trade for years. When the Eurex, a German futures exchange, questioned his tactics, Sarao assured the exchange that his trades were “100 percent at risk, 100 percent of the time.” When the Financial Conduct Authority of the UK questioned him he described himself as a talented, “old school” trader with fast reflexes. Exchanges should be willing to ban bad actors. They saw Sarao entering phony trades and responded by sending him letters. This is no surprise. Exchanges don’t make money by kicking people out of the game. Volume is everything. No one seems even to have noticed that Sarao kept a good chunk of his trading gains in the accounts of “Milking Markets Limited,” a tax shelter he had incorporated in tropical Nevis Island. Perhaps whoever issued the wire transfers thought he was in the dairy business. |
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Is the plunge protection team still in operation
 A colloquial name given to the Working Group on Financial Markets. The Plunge Protection Team was created to make financial and economic recommendations to various sectors of the economy in times of economic turbulence. The team consists of the Secretary of the Treasury, the Chairman of the Board of Governors of the Federal Reserve, the Chairman of the SEC and the Chairman of the Commodity Futures Trading Commission. "Plunge Protection Team" was the nickname given to the Working Group by The Washington Post in 1997. The team was initially perceived by some to have been created solely to shore up the markets or even manipulate them. The team was created in response to the 1987 market crash.  Follow us: @Investopedia on Twitter |
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BRENDAN STEELE HAD a feeling things were going a little too well. It was the Tuesday before the 2013 Players Championship, and Steele and Keegan Bradley stood on the 12th green at TPC Sawgrass with a 2-up lead on Phil Mickelson and Rickie Fowler in a best-ball practice match. Bradley was staring down a 10-foot putt that would give them a three-hole advantage with six to play -- not an insurmountable lead, but close enough. As Bradley read the putt, Phil spoke up from behind.
"Let me tell you," Mickelson began. "This is the whole match." His voice was even, almost thoughtful. An onlooker might have mistaken it for candor. But Steele and Bradley did their best to tune him out. They'd been playing in practice rounds against Mickelson for two years now, and they knew what was coming -- a piece of vicious psychological warfare cloaked in a veil of objective philosophy. Money was on the line, real money, and Mickelson wasn't about to go down quietly. He had the commitment of a method actor in these moments, and to engage him, even just a little, would be to let him inside your head. "If you make this putt," Mickelson continued, in his earnest way, "then we're going to be 3 down, and it's going to be too much to come back from. You guys are going to be excited, and you're going to have all the momentum." The 42-time PGA Tour winner indulged in a dramatic pause. Bradley was ready to putt, but that didn't matter. The rhythm of Phil's monologue had to be respected. Truth be told, Steele and Bradley were caught up in the act too, even if, like a film they'd seen a hundred times before, they could recite the best lines along with him. They'd had plenty of time to learn. Since the 2011 Players, when they'd been invited to their first of many Tuesdays With Phil, they had practiced girding themselves as he cycled between sarcasm, open mockery and his dreaded faux sincerity. The point of the matches was, in a way, to simulate the anxiety they all felt on Sundays, and nobody could ratchet up the pressure like Phil. He was, in Steele's words, an evil genius. "I get in these games," Bradley said before the 2012 Ryder Cup, "and I've got more nerves than I do in the tournament." And so as Bradley finished lining up his putt, it hardly escaped his attention that he and Steele had the chance for a rare blowout win. Deep down, he knew Mickelson was right. If Bradley made the putt, it could put the match away. "But!" Mickelson stressed, louder now, letting the word ring out for emphasis. "If you miss this putt, you're going to be so devastated that you're going to give us a hole in the next couple. After that, one of us is going to hit it close, and we're going to take another hole. And you're going to be so worried about blowing the lead that we're going to win the match. "So be careful," he concluded, with a show of paternal concern. "You don't want to quick-peel this one low side." And so it was that Bradley hit ... a quick peel on the low side, watching as the ball ran past the hole. And then he and Steele gave away the 13th with two bogeys. And then, on 15, Fowler stiffed one for a tap-in birdie to square the match. And two holes later, on the famed island green, Mickelson and Fowler sealed the match -- and the cash. Walking off Sawgrass that day, Steele and Bradley were seething. And if someone had stopped them to say that it was only Tuesday and the loss didn't really matter at all, that person would have been lucky to get away with only an angry glare. |
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To his colleagues, Tom Hayes was Tommy Chocolate – so called because he preferred cocoa to alcohol when out drinking with City friends. In court, Hayes, 35, who has a wife and child, complained he was being portrayed as “the Jesse James of Libor, the Bobby Dazzler of Libor”. At the end of his trial, the former trader was confirmed not only to have been a “gambler” but the “ringmaster” of the “biggest banking crime in history”.
Perhaps it’s natural that the first man to be convicted as a result of the momentous scandal – which saw bankers rig a key global lending rate that determines the cost of loans worth trillions of pounds, from mortgages to student loans – should have so many names and labels placed on him. The one likely to stick to Hayes the longest, however, may be “Rain Man”. Before the trial, Hayes was diagnosed with mild Asperger’s syndrome, a form of autism. The former trader was surprised to be told he was afflicted by the developmental disability, saying: “I don’t think there’s anything wrong with me.” Yet he added: “It does explain certain character traits I have. The obsessionality.” Hayes admitted this trait made him “different” to others in his office and led them to give him the nickname of the Dustin Hoffman character in the Oscar-winning film Rain Man. He told Southwark Crown Court: “They thought I was a little bit strange, I took things very literally. They used to laugh at me.” One source of amusement was the fact that, even in his late twenties, Hayes still had the same superhero duvet cover on this bed that he had gone to sleep under as an eight-year-old. “It still served its purpose so I didn’t see what was wrong,” he explained. There were serious ramifications for the trial, however. The judge, Mr Justice Cooke, told jurors that the diagnosis meant Hayes tends to only see the world in “black and white” and has difficulty in social situations – and warned that his speech could be rapid and peppered with jargon. The answers he gave doctors during a medical assessment were literal, intense and lacking in social niceties, Mr Justice Cooke added; they contained no irony or humour. Throughout the proceedings, in which he was repeatedly asked to slow down by his lawyer during his testimony, Hayes sat in court with an independent intermediary who would intervene on his behalf to ask for a break from questioning. And when probed by the prosecution about matters which went to the heart of the morality and criminality of some of his trades, Hayes would focus solely on the technical aspect of the question in ways which might have made him seem evasive. Hayes said he was obsessed with financial markets, and missed his former career after this case brought it to an end. “It was a huge part of my identity,” he said, and according to his lawyer, Hayes “lived, breathed and slept Libor all because he wanted to do a good job for the bank”. “I’ve always wanted to do my job as perfectly as I could, whether I was cleaning a deep-fat fryer or deboning a chicken,” Hayes said. “They always gave me those jobs because they knew there would be no chicken left on the bone and no fat left in the fryer.” So how did he come to be at the heart of an operation that cost banks billions in fines and led to global outrage? Hayes was born and raised in Hammersmith, west London. He and his brother Robin, four years his junior, grew up in a comfortable middle-class home. His parents divorced and remarried other partners. He excelled academically and studied maths and engineering at university. Even before graduation, a host of banks were inviting him for interviews at their offices. He joined RBS in 2001 as a junior trader. After a period working for the Royal Bank of Canada, he joined Union Bank of Switzerland in 2006 in its Tokyo office selling yen derivatives. It was there, the court heard, that his Libor-rigging education began by “osmosis – picking it up from the people he sat next to”. The Financial Conduct Authority concluded the bank’s Libor culture was “evasive” and the practice of submitting rates to suit its trading position was an “open and accepted practice”. But soon, the prosecution said, Hayes had learned to “cajole,” “beg,” and “bribe” other brokers into “corrupt” trades to fix the rate. He was a “ringmaster” orchestrating colleagues, rival dealers, and independent brokers to secure Libor fixes that benefited his trades. On one occasion this even involved asking his younger stepbrother, Peter O’Leary, to buy a “few drinks” for a colleague at HSBC to influence the rate, and offered to hand over $100,000 to another associate if he helped. Hayes claimed he was anything but a rogue trader, saying that pretty much everyone was at it. But he would later admit to investigators that, while it was commonplace, he was a “serial offender”. The motive was simple greed. Hayes could win millions of pounds for every point (one hundredth of one per cent) the Libor rates moved in his favour – and following his arrest in 2012, he told investigators: “You want every little bit of money you can get.” Hayes earned UBS more than £260m in three years trading. His reward was a pre-tax salary of £1.8m a year – but he did not think this adequate. His skills did not go unnoticed and several rival banks tried to hire him, including Goldman Sachs. When he eventually joined US bank Citigroup, his pre-tax salary jumped to £3.5m. Despite his new salary, his colleagues said he maintained a low profile, eschewing Tokyo’s expensive night life, preferring instead to dine in fast-food restaurants. Nor did he look like a suited and booted City trader: he could usually be seen wearing jeans and jumpers worn thin with use. His time at Citigroup was brief and bloody. His attempt to manipulate Libor was noticed by the bank’s legal department, which ordered an investigation. Hayes insisted he was unaware he had done anything wrong. In September 2010, two weeks before his marriage to 35-year-old lawyer Sarah Tighe in England, he was sacked – but he kept his £2.2m signing-on bonus. The couple have made their home in Fleet in Hampshire. Throughout the trial his wife and mother, Sandra, have attended in support. The US bank reported the incident to US, UK and Japanese regulators, resulting in both the US and the UK seeking his arrest. The case reportedly sparked a rare spat between the Serious Fraud Office and the US Justice Department. Yesterday’s outcome will help rebuild transatlantic co-operation. His fear of a US jail sentence prompted him to “tell-all” to the SFO to ensure he faced charges in the UK. In more than 80 hours of interviews, he outlined in great detail how every bank was endeavouring to influence the rate. His confession, he said, was born out of fear of being taken away from his wife and newborn child. However, the judge concluded that he was “by nature a gambler” – which extended to his remarkable decision to later plead not guilty despite having confessed to his methods, Mr Justice Cooke said in a pre-trial hearing. The judge said the evidence showed it was an “open and shut case” but that Hayes hoped the jury might be bamboozled by technicalities and let him off. “He may gamble with a jury but what I am not having is a long trial which is confused by the sort of material that has been put forward.” It was a bet he lost, at the cost of 14 years in jail. |
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What book do these stories come from?
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