Absolute Poker issued a statement in connection with recent insider-cheating allegations on Sunday through Joe Norton, the former Grand Chief of the Mohawk Territory of Kahnawake. In the statement, Norton identifies himself as the "owner of Tokwiro Enterprises ENRG, which holds a 100% interest in Absolute Poker."
The statement acknowledges the security breach within Absolute's system that allowed information about opponents' hole cards to be transmitted to several suspect accounts, and confirmed that the hand log released accidentally to Marco 'CrazyMarco' Johnson, the runner-up in the suspect tournament, did in fact highlight the security flaw that allowed the site to be compromised.
The latest Absolute statement assigns responsibility to "a high-ranking trusted consultant employed by AP whose position gave him extraordinary access to certain security systems." It continues by stating that the unnamed consultant "devised a sophisticated scheme to manipulate internal systems to access third-party computers and accounts to view hole cards of other customers during play without their knowledge," and that the consultant was "immediately terminated" by Absolute.
The statement continues by asserting that Absolute will pay for all losses to players traced to the cheating account(s), pending results of the audit by Gaming Associates and a separate audit conducted by the Kahnawake Gaming Commission itself. The statement also implies that Absolute will be cooperating with any investigations down by other jurisdictional or regulatory bodies.
The complete statement as released by Norton reads as follows:
October 21, 2007
Dear AP Player:
I am the former Grand Chief of the Mohawk Territory of Kahnawake and the owner of Tokwiro Enterprises ENRG, which holds a 100% interest in Absolute Poker.
As many of our players are aware, there has been a security breach in our system that allowed unlawful access to player information that resulted in unfair play. I am writing to you today to let you know what we know so far in order to set the record straight, and to assure you of AP's commitment to player security. I am sure that this letter will not address all of the questions and concerns you may have, nor will it extinguish the heated discussion surrounding this issue. At this point, our intention is to let you know all we can disclose and to assure you of our continued efforts to keep you informed as best we can as the investigations continue.
We deeply regret this situation has occurred. A breach in security in online poker is serious and of great concern to players and the industry worldwide, and this particular situation has been the subject of debate within the poker player community and in the media, giving rise to the creation of several websites and hundreds and hundreds of comments, opinions, and theories of what occurred – some of which are accurate, and some that are not.
Like you, I have not been happy that during the initial stage of our investigation, AP has not been more forthcoming in providing a timely or comprehensive explanation on this matter, giving rise to anger, suspicion, and concern on the part of our valued customers. I hope that our customers can appreciate that this remains an incredibly complex and sensitive issue, and I want to give you my strongest possible assurance that we will be as forthcoming as possible on how this breach occurred and what we are doing to remedy the situation.
What We Know and Actions We Have
AP was notified by a customer that a possible cheating incident occurred during a recent tournament, and in response forwarded players' hand logs. This disclosure of the hand logs prompted our customers to determine that a more serious security breach had occurred. We immediately launched an internal investigation and also requested a formal audit by Gaming Associates, an acknowledged world-wide expert in audits, interactive gaming tests, and information security.
Based upon our preliminary findings, it appears that the integrity of our poker system was compromised by a high-ranking trusted consultant employed by AP whose position gave him extraordinary access to certain security systems. As has been speculated in several online forums, this consultant devised a sophisticated scheme to manipulate internal systems to access third-party computers and accounts to view hole cards of other customers during play without their knowledge. As this consultant was aware of the details of our fraud detection process, the likelihood that the scheme would be uncovered through our normal procedures was minimized. We consider this security breach to be a horrendous and inexcusable offense.
We will pay for all losses suffered by the affected players as soon as our audit is finished and the amounts are determined. Although we are in the process of attempting to recover all the winnings of this consultant, any unrecovered losses of affected players will be paid by Absolute Poker so that all affected persons will be made whole.
We are still investigating whether the consultant was acting alone or in concert with others, and it appears at this time that all account holders are innocent of collusion and were unaware of any wrong-doing by the consultant, who was immediately terminated. We continue to investigate this matter aggressively, and all of these preliminary findings are subject to the audits currently underway. We have recently uncovered additional accounts used by the consultant that have not been publicly reported. So as to not compromise the investigation, we are not releasing the names of these additional accounts at this time, and will contact these affected customers individually.
The specific allegations of unlawful activity are being investigated both by AP and by the authorized authorities, including the Kahnawake Gaming Commission. We will continue to actively cooperate with these authorities in full compliance with the Regulations Concerning Interactive Gaming. In addition to our own investigation and the audit by Gaming Associates, we have also submitted to an audit by the Kahnawake Gaming Commission.
Please be assured that we have corrected the problem that allowed the system to be unfairly manipulated. We are working furiously to increase the safeguards within our systems. While we are satisfied that our systems are secured, we realize that our security systems must be continuously monitored and enhanced.
Without question, this incident has been unfortunate for all concerned, and we will emerge as a stronger company. I realize it will take some time and much more information for AP to re-earn the trust and confidence of our customers who are in doubt of our commitment to the highest levels of security, privacy and integrity. As we move to address and correct this situation, our valued customers have played a vital role in uncovering this scheme through various online forums and have become an active part of the solution.
With my full sincerity, I thank you, and I promise to keep you updated as we bring this situation to a close.
Separately, Absolute has already begun two processes connected with the accidental release of the spreadsheet containing information about the suspect tournament. First, Absolute has begun issuing payments of $500 each to any watcher of the tournament whose e-mail address was included in the file.
Second, Absolute has begun the process of refunds to players in the September 12th 'POTRIPPER' tournament. All players in that tournament who cashed will be bumped up one spot, and all players in the event (which had 98 entrants), will receive a refund of their $1,000+50 entry fee, plus interest calculated at 10% per annum (or about 1%).
It is believed that 96 of the 98 accounts in the tournament are expected to receive these refund payments, excepting the disqualified winner, POTRIPPER, and 'GRAYCAT,' another of the suspect accounts connected to the cheating situation. The GRAYCAT account was first linked to the allegations in regards to cash-game anomalies, but was present in the September 12th tournament as well. The GRAYCAT account was reported as being blinded off in its entirety in this tourney, while seated at a different table. PokerNews cannot confirm the complete blinding off of that account at this time, but the spreadsheet does show the GRAYCAT account not playing any hands during the initial 2:20 of tournament play captured within the file, at which point the account had been blinded down to 4,150 in chips from an initial 10,000 starting stack.
Absolute also announced plans to begin working on calculating refunds based on cash-game play involving the supposed cheating accounts, the entire list of which has not been released at this time. Those payments are expected to be calculated within the upcoming Gaming Associates audit.
PokerNews will return to the unfolding story as further information warrants.