Haley's Poker Blog

No bad beats, but still a poker blog... hence the anguish.

Saturday, June 02, 2012

Just Conjecturin', Volume 43: AP's Chairman Janusz Targeted by Norwegian Bankruptcy Attorneys; $250 Million Corporate Theft Alleged

Back to the Just Conjecturin' grind, with a hat tip this time out to an anonymous commenter who alerted me to a unfolding legal action in US District Court, right here in my home state.  This involves the former chairman, Ron Janusz, of Absolute Poker's one-time parent/holding company, Norwegian Fjord Madeira Fjord AS. 

Madeira Fjord declared bankruptcy last year, and was subsequently hit with a 180 million kroner (about USD $30 million) tax bill for its transference of corporate assets through the Norwegian financial system.  All that plays into the Norwegian court's bankruptcy process, which continues to attempt to unravel AP's investment Gordian Knot.

In the latest legal developments, the Norwegian court-appointed bankruptcy attorney, Thomas Steen Brandi, has sought a detailed laundry list of documents and a deposition from Janusz (full-name Robert Ronald Janusz.  Janusz has been described in othe reports as a Canadian national but has lived in the US for at least 15 years, and appears to have entered the Absolute Poker sphere of influence through an extended business friendship with Floridian Hilt Tatum III, the father of SAE fratboy/co-founder Hilt Tatum IV. 

Steen's firm retained the sources of Illinois law firm Seyfarth Shaw LLP and attorney Jordan P. Vick, filing an application for subpoena against Janusz after Janusz ignored months worth of Norwegian efforts to supply documentatiom regarding Madeira Fjord and a related Portuguese entity, Avoine - Servico de Consultadoria e Marketing.  Janusz currently lives in West Chicago, IL.  Janusz also served as the public chairman of Avoine, which has been alleged to be the true hiding spot of the Americans who really controlled AP in the years following its acquisition of UltimateBet and its flight from America's UIGEA.

The filing against Janusz was made in the Northern District of Illinois' US District Court on February 29, 2012, with the motion quickly granted on March 12, 2012.  Janusz quickly retained attorney Leonard A. Rodes of New York firm Trachtenburg Rodes & Friedberg LLP, and to date has not appeared to answer the subpoena, with the next hearing in the matter scheduled for June 14, 2012.

The purpose of the Norwegian pursuit appears to be two-fold.  First, Madeira Fjord issued an unexplained "loan" from Absolute Poker coffers to Janusz in 2007 for $3.125 million.  The loan agreement was signed on December 17, 2007, with $2.5 million known to be transferred to one of several businesses owned by Janusz, Universal Business Management Group, four days later, and that loan remained on the Madeira Fjord ledgers.  According to a letter sent to Janusz last June:

"The loan is still registered in Madeira Fjord AS' annual accounts and has not been repaid.  A copy of the loan agreement is attached.  The estate considers the loan agreement to be illegal, cf. the Norwegian Companies Act Section 8-11, and UBMG has an obligation to repay the loan immediately."

It is not known if the additional $625,000 called for under the original loan agreement was ever transferred to Janusz, but the request for repayment added $473,083 in interest charges to the known $2.5 million on the books, for a total of $2,973,083 as of June 22, 2011.  That total is believed to have climbed to roughly $3.1 million today.

The second purpose of the hoped-for deposition of and documentation from Janusz appears to be further uncovering of the two $125 million promissory notes at the heart of the AP/UB acquisition and subsequent transfer trough two different faked frontmen, first Joseph Tokwiro Norton, then Blanca Games placeholder Stuart Gordon.

Unfortunately, the rank-and-file shareholders of Absolute Poker received only a few pennies on the dollar in investment return, with the deposition by Norwegian attorney Steen detailing one of the first step-by-step descriptions of the legal and business machinations of the corporate ripoff made public to date. 

In 2007, Absolute's core executives and shareholders executed a "mirror image merger" in which all the original Absolute Poker investors, which had been bundled together in original holding company SGS (BVI) Inc., were shunted over to Madeira Fjord, while the operations of AP went through Avoine and several other related entities.

Avoine's assets were then sold back to Absolute Entertainment SA, while SGS was dissolved and, as it was sold to the shareholders, removing the American corporate tie-back.  It was all promised to be returned to the general shareholders through the $250 million in combined promissory notes, plus promised minimum monthly payments of $1.7 million.  But the theft waited in the details.  According to the Steen deposition, this happened next:

"Then, in December 2008, Madeira/Avoine initiated a purported 'rescission' of the $250 million sale and assets and shares from Avoine to AE.

"Thereafter, it appears that Avoine executed an instrument called an Exercise of Secured Creditors Rights (the 'Exercise Agreement') by which Avoine instructed Tokwiro to transfer the assets and shares in AE (and thus the 'Absolute Poker assets') to an entity called Blanca Games Inc. ('Blanca'), subject to Avoine's continuing security in the assets.

However, according to Steen, and which has been verified to me independently by other AP investors, promissory note payments and dividends were never paid.  As Steen summarized it:

"... the significant assets of Avoine -- which were valued in 2007 at $250 million and which were developed with capital supplied by about 250 innocent US shareholders -- have simply been misappropriated by those persons controlling the involved entities."

Janusz is believed to believe to be in possession of several key documents related to the shuffling of corporate entities, and copies of many of the early non-answered documents were also sent to Floridian trust-fund baby Shane Blackford, third of the four original University of Montana SAE fratboys generally credited as Absolute Poker's co-founders, along with Scott Tom, Garin Gustafson and Hilt Tatum IV. 

Several AP officials and execeuitves are mentioned in the filing's attached documents, including Richard Borgner, who like Blackford and Janusz served briefly on Madeira's board, and US-indicted AP principals Scott Tom and Brent Beckley.  The lack of mention of additional individual shareholders, but the inclusion of such ownership entities as Greencat Holdings, alleged by one AP shareholder -- but unproven as yet -- to be affiliated in some form with Scott Tom's father Phil Tom, points to the information coming from a 2010-era, general-ownership registry for Madeira Fjord known to be in legal circulation.

Earlier unofficial documents, authored before the creation of the Avoine/Madeira shells, show many more of the true owners of Absolute Poker.  At least seven of those individuals, US citizens working as AP executives, received ownership stakes in Avoine, with an ownership registry for that company not yet within easy reach of the Norwegian bankruptcy effort.

Correspondence with at least two dozen legal and corporate firms affiliated with Absolute Poker was also targeted by the subpoena, including a couple of entities new even to this researcher.

*   *   *   *   *

Book update.  Work continues... slowly.  As you all can see, the story refuses to end.  In addition to all the hundreds of e-mails and hours of tapes and sifting of stories that I continue to do, there's thousands and thousands of pages of court documents to work with.  The pile keeps on growing.

Sometimes, I dig deep and hit a dead-end.  That's happened a few times lately, but I never expected this would be an easy tale to tell.

The above needed to be reported because it's news-news-news, but I have backstories that go along with much of the above.  That work continues to help build the second half of the book, which deals mostly with AP.  The UB stuff I thought I had finished up, until a new wave of information about the company's early years forced me to go back and rewrite virtually everything.

Will it be good, when it's finally done?  Hell, I don't know, but I keep plugging.

1 Comments:

Anonymous Charybdis said...

Fascinating! You've got a genuine corporate thriller on your hands.

4:52 PM  

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