Theft by Pokerspot

[Greg (FossilMan)]

In a thread on the tournaments forum about Dutch’s loss to Moneymaker’s 33 during the WSOP, Daliman wrote:

[ QUOTE ]
PS died owing me about $900 (maybe more, maybe less, tuff to remember now), and, though I'd love to have you pay me that $$$, I kinda have to agree with your stance that those are corporate debts, sorta like if people invested in a company with a positive expectation yet never recieved their dividends, although I wouldn't place it anywhere near the level of smaller scale ENRON; I'd like to think it was mismanagement and poor business model that doomed PS, and not corporate malfeasance.

[/ QUOTE ]

I’m sorry if this sounds too harsh, but to make this statement you are either ignorant or a mouthpiece for Dutch.

Dutch stole that money, either willfully or through ignorance. People deposited money into THEIR personal player’s accounts at Pokerspot, and that money was apparently comingled with Pokerspot’s general assets, and thus used to pay bills and the like. Because of this comingling, the money was spent on expenses rather than being kept in trust for the players, and thus safe from misuse and creditors. Comingling these funds was theft, and that theft led to the loss of your money and everyone else’s.

When you invest in a company, by buying stock or bonds or the like, you know you’re taking the risk that the company goes bankrupt, or even if it stays in business, that you will lose money on the investment. But people weren’t investing in Pokerspot when they deposited money. They did not expect that deposit to grow if the company did well, but only if they won playing poker there. Similarly, they expected that the only way they were going to lose that money was by losing at the poker tables.

Imagine you write a check to your broker at Merrill Lynch, and have him buy stock for you. You expect to be taking a risk that you could lose money because of your stocks going down in value. But, if ML were to go bankrupt, you would not expect to lose your investment. The money you invest through them is held by them in trust, it belongs to you, and if they have corporate debts, in or out of bankruptcy, the creditors cannot touch your money. However, if they comingle your money with their money, then the two become indistinguishable, and creditors can go after it. You become just another creditor. And it’s due to their malfeasance in comingling the funds. If they had kept things separate and identifiable, and put your money/stocks/bonds in a trust account, it would be safe. ML and other brokers are required to do things in this manner by law, and if they do not, even if your money is never lost, they are guilty of breaching certain laws, and will face fines and/or jail time.

Now Dutch was operating outside the US, and was probably not subject to these laws, but he still should have known better. Even if he technically broke no laws, he did breach the trust of his players by comingling funds, and is guilty of stealing that money, IMO.

[ QUOTE ]
if you graduated law school at like 18

[/ QUOTE ]

If Dutch went to law school, then he either knew or should have known that comingling funds was either illegal or at least unethical. And he knew or should have known that by placing that money in trust he could protect his player’s money even if his business failed. But, rather than do that, he decided to risk THEIR MONEY in order to increase the chances of his business succeeding. And I very much doubt that he asked their permission first, or even told them he was doing it, which makes him a thief.

If Dutch ever became a member of any state’s bar, I’d love to hear about it. So I can turn him in and get him disbarred for fraud and theft. If he is a lawyer, he shouldn’t be.

[ QUOTE ]
My question on the Pokerspot issue is: ... and do you feel your age and lack of experience had something to do with the ultimate downfall?

[/ QUOTE ]

It almost certainly did. Now, if Dutch had come out and admitted that he made a mistake by comingling the funds, then maybe we could all figure him for a youthful mistake. However, Dutch has been anything but contrite on this issue, and still argues that he did NOTHING WRONG. That’s bullshit. He stole money, by using it in a manner that placed it at risk, when it was supposed to be held in trust for the players. It may be that through his youthful exuberance, and the firm belief of many of us when young that “it won’t happen to me”, that he did all this without evil intentions. But if that were the case, he should’ve stepped up and apologized. However, since he’s not apologetic, he certainly gets no sympathy from me.

In case anybody thinks this is sour grapes, I never played at Pokerspot, and didn’t lose a dime because of it. I also have never met Dutch, and have no opinion of him other than what I’ve read on the internet and heard from other people. However, despite his posts proclaiming his innocence, he’s never said that he didn’t comingle the funds, and THAT was his crime. He knew better, or he should have known better. If he actually didn’t know better, then he should have been apologizing for that mistake, not claiming his innocence. And since he went to law school, I really don’t think he made an honest mistake. I think it’s more likely he knew he wasn’t supposed to comingle the funds, but did so anyway as it was his best shot at making Pokerspot succeed.

Later, Greg Raymer (FossilMan)