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Posted: Thursday, March 27, 2014 6:26 pm | Updated: 1:27 am, Fri Mar 28, 2014.

Brent Beckley woke up at 4 a.m. on October 1, 2012, and kissed his two young boys goodbye while they slept. He pulled on some jeans, comfortable shoes and a sweater. His wife bawled as Beckley stepped out of their home in Highland, Utah, about an hour south of Salt Lake City. 

They had been preparing for this day for a long time. It felt like preparing to die.

“No bags?” the cabbie asked when Beckley stepped into his taxi.

“No.”

“Wow. You’re interesting already.”

The cab drove him an hour to Salt Lake City International Airport, where Beckley boarded SkyWest flight 4668 to Denver, scheduled to depart at 6:50 a.m. He didn’t have a return ticket.

 One of Beckley’s former fraternity brothers from Sigma Alpha Epsilon picked him up from the airport and drove him the two hours south to Florence, Colo. There Beckley stepped out of the car and surrendered himself in front of a minimum security prison that looked like an elementary school — tan bricks, brown rocks and no grass.

 A guard told Beckley to stand by the fence and ordered his friend to leave.

 “What are you in for?” the guard asked.

“I ran an online gambling business.”

“That’s not illegal, is it?”

“I guess so,” Beckley replied.

He was taken to the processing facility, where he stripped out of his clothes and placed them in a box to be shipped home. Naked, Beckley was physically inspected, his cavities searched for objects.

Then he put on a green prison jumpsuit, canvas belt and black boots. He picked up his mattress and handbook and carried both across the compound to his new home.

ANTE IN 

“You gotta come to college, it’s awesome,” Beckley remembered Scott Tom telling him. “You’re not doing anything with your life. You gotta come up here and party with me and go to school and meet girls.”

Tom would call almost every night. Though they weren’t biological brothers, Beckley’s dad married Tom’s mom when he was 5, and they had lived together since Beckley moved to Frenchtown at the age of 15.

After graduating from Frenchtown High School in 1998, Beckley took a year off to work in Utah. He didn’t really know what a fraternity was, but when Tom offered a room at the Sigma Alpha Epsilon house for $500 the following summer it was too good to pass up.

Peter Barovich was president of SAE when Beckley moved in. The house was a mixed bunch, everything from Grizzly football players to college dropouts. When Beckley came in, Barovich remembers him as the epitome of Missoula: super-hippy. Barovich wasn’t sure if he wanted Beckley in the frat, but over the summer he grew to love the kid, and when school started he welcomed him to join.

The fraternity brothers had a spot they would go every night of the week — Tuesday at the Limelight; Wednesday at Bodega; Thursday at Iron Horse, and Monday night at Stockman’s — where they hosted a $100 freeroll poker tournament. For the college students, it was a small fortune.


“That sounds like the dumbest idea I’ve ever heard,” Barovich responded. “Online poker? Nah, you go to Stock’s and you have to read the guy.”


 

For Tom, the pastime extended beyond Stockman’s poorly-lit bar. He started paying attention to several online poker sites, some of which had 1,200 players in their card rooms. For each hand played, the site took a portion of the money, or a rake. Tom wanted to rake.

Beckley dismissed the idea. For him, half the fun of poker was the social aspect of betting against his friends. Playing behind a keyboard sounded ridiculous.

But for Tom the idea stuck. After graduating with a degree in finance from the University of Montana in 2002, Tom was living in his father’s basement in Seattle when he put together a business plan. Then he started calling old friends. Shane Blackford was the first to come, then Garin Gustafson and Oscar Hilt Tatum IV. All fraternity brothers from SAE.

Tom asked Barovich to join the business too. 

“That sounds like the dumbest idea I’ve ever heard,” Barovich responded. “Online poker? Nah, you go to Stock’s and you have to read the guy.”

Barovich was running his own business, Northwest Distributors, and he was in a brand new marriage, not ready to relocate with a bunch of single men for an online poker business.

Beckley was still in college, but in the summer of 2002 he went to Seattle to intern at Wells Fargo with Tom’s dad, Phil. He would work in the office from 5 a.m. to 1 p.m., then come home and work with Tom and the others to help start up the business.

Beckley became so excited about the business prospects that he wanted to stay, but his older brother wouldn't have any of it. So Beckley went back to finish his senior year and would help with the business when he could.

In May, 2003, Beckley graduated with a 2.80 GPA in business administration and finance. Tom called Beckley and asked him to join the business, which they had since moved to Costa Rica. 

“No, man. Now I’ve got a degree. I’m a college graduate. I’m going to get a real job,” Beckley said.

He started looking for full-time work.

Tom called every day until he made one last offer — Director of Customer Service — and they would pay Beckley $1,200 to $1,800 dollars a month. Beckley had two weeks to get to Costa Rica. He sold his couch, TV, coffee table, clothes and everything else he wasn’t taking with him. He dropped his ‘88 Jeep Cherokee off at Missoula Federal Credit Union because he couldn’t finish making payments, and applied for an expedited passport.

At 8:30 a.m. on June 30, 2003, Beckley departed Missoula bound for San Jose, Costa Rica. 

Absolute Poker had been up and running for three months, and although it didn’t have many customers, it was gaining decent reviews from enthusiasts. Beckley knew they would have to offer the best product to gain clients, and he looked forward to getting started.

BOOMING BUISNESS

During that time, Costa Rica, unlike the United States, issued licenses for Internet gaming sites, which meant Absolute Poker had to operate under regulation. Part of the reason they moved the company was because other online poker sites like Paradise Poker and Planet Poker had done the same thing, Beckley said.

“Really the way that we built the business was looking at what everybody else was doing with their software, with their customer service, with their corporate structures and licenses and things,” Beckley said, “and doing that.”

At first, Absolute Poker averaged 10 new registrations per day.

The breakthrough came when they advertised on the Travel Channel’s World Poker Tour, which was televised nationally. Overnight their registrations went from about 20 a day to 2,000 a day. The growth didn’t stop. The site would increase its members by 40 percent each month for three years, Beckley said.

“It was so much fun,” Beckley said. “We would all work 16 - 18 hours a day. And every time we would go to lunch together or we’d go to dinner together or go out at night, we were talking about work. It was just like this incredible group think where that was what we did.”

According to an article published in the Guardian in June 2005, Absolute Poker became the world's fifth largest online poker site in revenue, behind Party Poker, PokerStars, Full Tilt and Ultimate Bet. In June 2005, PartyGaming, the parent company of Party Poker, went public on the London Stock Exchange with a valuation of $8.5 billion. The four owners of the company collected more than $2 billion cash in the value of today’s dollar.

When PartyGaming went public, much of the news focused on the fact the market was arguably illegal in the United States. Internet gambling possibly violated the Interstate Wire Act of 1961, which made transferring money or information through a wire service about bets or wagers, specifically involving sports, illegal. But is poker a game of chance?

Absolute Poker’s lawyers weren’t sure if the Wire Act applied to online poker, and it certainly didn’t seem to be hurting the market with the success of Party Poker, so Absolute Poker had their sights set on going public.

In order to make their business look more legitimate to potential investors, Absolute Poker moved its servers to Vancouver, Canada. Peter Barovich had kept a presence in the business, serving as a consultant and beta tester for his friends. When Tom called him in 2005, he talked the marketing graduate into joining the then-successful company and moving to Vancouver.


“Why has Congress been so supportive of Internet gambling legislation for so long?” Kyl asked on the floor of the U.S. Senate on Nov. 16, 2006. “Because offshore operators have been flouting American laws for personal gain. They have been giving Americans the false impression that these activities are legal. They have been profiteering from this.”


 

Absolute Poker was audited by BDO, the fifth largest accountancy network in the world.

They had only two years of audited financial statements, though, and needed three before going public. 

The company just had to keep doing what they were doing for another year, and then they would be billionaires. Already, Absolute Poker was worth $100 million, with revenues of more than $40 million each year. The founders were living large; their sponsorships got them paid vacations all around the world to appear at parties and gambling events. Tom and Gustafson were invited to the Playboy Mansion when they sponsored the 2006 Gumball 3000 Rally, a race around the world. Beckley and Tatum were invited to Monte Carlo for a huge poker tournament.

“Overnight everything changed,” Beckley said.

BAD DRAW

Beckley remembers watching the Unlawful Internet Gambling Enforcement Act pass on C-SPAN in the middle of the night, on the very last day of the legislative session. It passed in September 2006, tacked on to the Safe Port Act.

The act didn’t make it illegal to play poker, just for a company to take payment for Internet gambling from U.S. citizens. Former Sen. Jon Kyl, R-Ariz., had been working to pass versions of the law for 10 years.

“Why has Congress been so supportive of Internet gambling legislation for so long?” Kyl asked on the floor of the U.S. Senate on Nov. 16, 2006. “Because offshore operators have been flouting American laws for personal gain. They have been giving Americans the false impression that these activities are legal. They have been profiteering from this.”

Sen. Kyl declined to comment for this story.

After the legislation, Party Poker pulled out of the U.S. market. It paid the government a $1.05 million fine and in one cut lost 80 percent of its clients. Its stock dropped from $12 billion to $2 billion.

Absolute Poker had not yet gone public, so they spoke with their lawyers about the legality of continuing to cater to U.S. clients. The lawyers were unclear about the law, and thought it wouldn’t last, Beckley said. The legislation required the U.S. Treasury Department to define how banks were going to work within the new law, which wouldn’t happen for another three years, in 2009.

Tatum approached Beckley, and they talked about whether or not he wanted to stay in the business. If Beckley stayed, he wouldn’t be allowed back into the U.S., even for a layover flight. He knew if he moved back to the U.S., prosecutors would find him first to ask him about the business and what his friends and colleagues were doing.

“This was a business that we’d built. This was our baby. We’d invested five years, or I guess it was three years at that point, but it was a long three years, into growing this business and making it competitive,” Beckley said. “It just didn’t seem right that the government could pass this piece of vague legislation in the middle of the night and take it away from us.”


“It became clearer that the industry was becoming much less legitimate than it had been in 2006,” Beckley said.


 

Absolute Poker had changed from a couple of frat brothers in a basement in Seattle to a company with 700 employees in five countries. After buying Ultimate Bet, it had become the third largest online poker site in the world. Beckley decided to stay. Blackford, didn’t. He left the company and moved back to the U.S.

In 2009, when the Treasury Department did release guidelines for banks to operate within the law, Beckley’s job became more difficult. As he moved up in the company, he dealt with the companies who took money from players' credit cards and then distributed money to other players when they won a hand. But once banks were told their clients couldn’t use money for online gaming, they wouldn’t release money from a card holder’s account for poker. All the legitimate payment processing companies Beckley worked with suddenly wouldn’t work with them.

But people still wanted to play. To keep the business going, Beckley started working with companies that processed payments differently. Overseas banks would label poker transactions as sales for T-shirts, golf balls, or other items, so the U.S. banks would release the funds.

“It wasn’t about being shady, it was about letting the customers do what they wanted to and about keeping our business running,” Beckley said.

Often the companies would work with Absolute Poker for a while and then suddenly disappear, sometimes taking millions of dollars with them.

“It became clearer that the industry was becoming much less legitimate than it had been in 2006,” Beckley said.

Beckley struggled with the losses they suffered during the exchanges. Any state in America that found a payment processing company that dealt with Internet gambling businesses would seize the company. Processing accounts overseas disappeared because they were corrupt, or Visa and Mastercard would come in and levy million dollar penalties because they were violating their rules.

The money wasn’t Absolute Poker’s, it was the customer’s. When companies stole money or disappeared, Absolute Poker would have to go into litigation to try to get their customer’s money back. Payment processing costs rose to about 35 percent, an unsustainable figure.

“We’re looking at this business going, ‘What the— how is this going to end?' I mean this is fucking crazy,” Beckley said.

On April 15, 2011, anyone who logged onto Absolute Poker's website would no longer see the deep royal blue that sat in the middle of the poker table in one of their online card rooms. Instead, they would see the seal of the U.S. Department of Justice.

And a message: “This site has been seized…”

That same day, the U.S. Attorney’s Office for the southern District of New York released an indictment. Tom and Beckley were on the list. Strangely, Beckley was relieved. He knew what the end looked like.

BLUFF CALLED 

The day came to be known as Black Friday. All three of the largest poker sites in the world were shut down by the DOJ, along with five payment processing companies. Two members were indicted from each poker company — a founder and a payment processor.

Beckley found himself in a room of the Intercontinental in San Jose with 20 lawyers. He explained to them what payment processing really was. He had to shut down the business, layoff 350 employees and pay them their severances. On December 17, 2011, Beckley sent his wife and two boys to live with family in Utah.

Beckley was charged with five felonies — three related to the UIGEA violation, the other two were for money laundering and bank fraud.

In return for pleading guilty, the prosecutors dropped two of Beckley’s UIGEA charges and his money laundering charge. Beckley returned to Utah. In July, 2012, he was sentenced to 14 months of prison and two years of supervised release. He would begin serving his sentence in October so he could finish culinary school.

When the indictment came in April, Tom was vacationing in Antigua with his girlfriend. He decided to stay where he was and remains there today, Beckley said. The federal government considers him “at large.”

Pete Barovich felt as if he had dodged a bullet. He was running an Absolute Poker office in Panama when the indictments came, and he stayed there for a few weeks to help shut down the business. He had to lay off hundreds of Panamanian employees and return to the U.S.

“When I walked through immigration in Denver, that feeling of relief was like (one) I’d never had," he said.

Relief was bittersweet. He’d just left the best job in the world. Now he was back in the “real world,” and he knew he would never see that lifestyle again. For about eight months he searched for a company to buy, during which time he wrote a 15-page summary of the story of Absolute Poker, and sent it to author Ben Mezrich. Mezrich flew down to Phoenix and talked with Barovich for a couple hours. Then he decided he had to write the book.

Mezrich’s “Straight Flush” was published in May 2013.

Barovich eventually found Red Mountain Lighting, a small lighting company based out of Phoenix. He bought the company and has since doubled its size, even opening an office in Florida. But his best friend, Beckley, faced a different fate.

WORST JOB EVER

“Dad, what are you doing here?” Beckley’s 7-year-old son asked him when he came down for a visit a month after he had left for prison. “Why are you here?”

Beckley was in the minimum-security prison full of drug offenders and a few white-collar criminals. They all had to work 40 hours a week and got paid 12 cents an hour.

Beckley took his son to the window and pointed toward the medium security prison.

“You see that place over there. It’s full of prisoners. I help get them food, and I help clean up over there. I have a contract that I signed with these guys. And that’s why I’m here, I’m here working for the length of my contract.”

His son looked at him.

“Dad, this is the worst job ever.”

In prison, Beckley said his biggest concern was his wife and two boys. Beckley’s wife is from Colombia and had never been to the U.S. before he was indicted.

They were able to visit once a month.

Before visits, Beckley would tear the scented strips from cologne ads out of magazines and rub them all over, to smell less like prison.

“I see these cologne strips in my magazine now and I can’t help but think about it,” Beckley said.

The prison guards monitored his family visits. They made sure he only hugged his wife twice. Once when they arrived and once when they left. They made sure they only kissed once and didn’t sit too close.

Barovich visited. He drove the two hours from Denver, through the middle of nowhere, thinking, “Wow, I can’t believe we’re driving to go see a friend in prison.” Especially since he could have ended up sitting right next to him. It didn’t seem right.

“What we were doing, again, it’s not even for argument, what we were doing wasn’t wrong,” Barovich said. “There was no harm to— technically it’s what they call a victimless crime. That means no one person or no one company was damaged.”

Yet Beckley was still behind barbed wire. Barovich remembered him being surprisingly calm and easygoing.

Beckley made his time in prison as productive as possible. He would walk the track, about six miles a day. He read — 75 books in total. He would attend classes where other inmates taught about different subjects. Throughout it all he tried not to be resentful.

“There are some times when it’s hard not to be,” Beckley said. “There were a lot of people, not just in our company, but in the industry that made a fortune. And walked away, and are still living the dream, so to speak. I felt like I didn’t only take it on the chin for our company, and my friends, but I took it on the chin for the whole industry, and our customers.”

His goal was never to prove a point or fight for justice. When Beckley asked his lawyers if he pleaded not guilty and took the case to trial, they said he had a good shot at winning, since some of the language in the law was vague. His lawyers told him a trial could take anywhere between two and three years, and could cost $6 million to $8 million.

“For me, it wasn’t really, and it still isn’t, do I view myself as guilty or innocent. I was clearly involved in a business that was against the law at a certain point in its lifecycle. Did I ever have the intention of committing a crime, or did I ever look at it like that was something that I was going to do to make more money? No.”

After nine months in prison, Beckley was released to a halfway house closer to home. He spent six weeks in the house, then another six weeks splitting his time between home and the halfway house, until he was released in October 2013.

Now he’s trying to move on.

He’s interviewed for jobs at several different online companies. He aims to do it right - so he doesn’t sound defensive, and so people don’t hear the word felon, and stop listening.

“He’s one of the most brilliant people I know in the space that he worked in,” Barovich said. “And there’s many, many Fortune 500 companies that would pick him up in a heartbeat, but they can’t. Unfortunately he’s going to feel those pains for the rest of his life.”

In December 2012, the DOJ Office of Legal Counsel officially clarified its position on the 1961 Wire Act, concluding that it applied only to sports betting. In summer 2013, Nevada legalized online poker for its residents. Delaware followed suit and then New Jersey.

“It kills me to see the states now legalizing online poker,” Beckley said.

Although it's once again legal, Beckley wants nothing to do with the online poker industry.

He still keeps in touch with his friends from Absolute Poker. He talks to Tom every couple weeks, and he can see how hard it is on his brother to be basically imprisoned on Antigua.

“He’s doing OK, considering,” Beckley said.

Beckley hasn’t returned to Missoula since he graduated. He hopes to change that this Homecoming. He wants to show his wife and two boys the place he talks about so often, and to see his old fraternity.

He’s started his own consulting business and wants to help businesses with their e-commerce operations and fraud management.

He’s embracing the past that he knows people will uncover with a simple Google search, and looking to capitalize on the experience and sweat equity it took to build a $100-million business, before it came crashing down around him.

“Now that I’ve pled guilty, been sentenced and been to prison for it, fuck yeah I ran Absolute Poker.”

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