One year ago, Daniel Tzvetkoff was arrested. He faced 75 years in prison and $543 million in money laundering charges. Last August, Tzvetkoff was suddenly released on bail, without explanation. Today, he is living mostly free in a secret New York location.
Tzvetkoff is an Australian entrepreneur who is perhaps the biggest reason for online poker’s boom and widespread existence. Starting his first company at 13, Tzvetkoff was an early success. He took his commercial expertise to online poker, becoming a primary mover and shaker. Tzvetkoff constructed the payment processing systems used by major poker sites, making the game an international online phenomenon. When these payment processing systems were used by Full Tilt and PokerStars, it earned him as much as $150,000 a day.
Tzvetkoff is the only known industry player with in-depth knowledge of the payment processing systems (or, more specifically, money laundering schemes) used by all the major online poker companies. Tzvetkoff can allegedly reverse-engineer these transactions, and trace the original source, extraordinarily valuable knowledge to prosecutors. As the singular creator of the online poker industry’s cash flow systems, he is the one person with the knowledge to bring it down. Apparently, that is exactly what he did.
Last year, in April 2010, he was arrested for creating these illegal payment processing systems. August 2010, he held “secret” meetings with prosecutors, and was mysteriously released on bail. This past Friday, April 15, 2011, it’s rumored that the world of online poker experienced the consequences of Tzvetkoff’s meetings about his insider knowledge, as the four biggest online poker sites’ U.S. operations were seized by the FBI.
While these companies are charged with the same crimes levied against Tzvetkoff one year ago, Tzvetkoff walks free. It looks like that maybe the FBI caught the industry’s biggest insider to catch the bigger fish.
Ironically, Tzvetkoff was only caught when one of his disgruntled former clients, either Full Tilt or PokerStars, tipped off the FBI on his U.S. travel plans. Perhaps Tzvetkoff had a surplus of bad blood and flipped the tables, allowing the state of online poker in the U.S. to fade to black.
How these cards fall remains to be seen. While U.S. poker players will be forced to be patient, it is quite possible that these dramatic events will be the purging of crime within the industry, setting the stage for a regulated, more accessible industry. Bets aren’t off, but the stakes are higher.