Online Poker Tycoon Russ DeLeon Being Sued by Chevron Corp.
Russ DeLeon, best known as an online poker magnate after becoming a major PartyGaming stockholder after the company's 2005 IPO, is being sued by the Chevron Corp. after financing a controversial and long-running environmental lawsuit that allegedly used fraudulent and racketeering means to obtain a $19 billion judgment in an Ecuadorian court.
According to Roger Parloff of Fortune, Chevron contends that DeLeon, who invested millions of dollars to fund the litigation, was aware that the plaintiffs, headed by his Harvard Law School classmate Steven Donziger, were "employing fraudulent and other criminal means to win the judgment."
Previous court documents revealed that DeLeon invested at least $1.6 million for 25%-30% of any future settlement. Chevron is seeking unspecified damages from DeLeon, who has denied any wrongdoing. A court in Gibraltar, where DeLeon took up residence in 2008, issued a ruling in which it stated that it will hear the suit.
On March 4, U.S. District Judge Lewis Kaplan of New York called the lawsuit a massive fraud against the company in which the plaintiffs violated the Racketeer Influenced and Corrupt Organizations Act.
"A U.S. federal court in New York has ruled that the judgment against Chevron in Ecuador is the product of a fraudulent scheme intended to extort billions of dollars from the company," Morgan Crinklaw, a Chevron spokesman, said in a prepared statement. "Chevron believes that the perpetrators of that scheme should be held accountable for knowingly advancing the fraud. This action is part of that effort."
DeLeon made his fortune working for PartyGaming when it launched partypoker. DeLeon married Ruth Parasol in 2003. Parasol is the woman behind PartyGaming, which she launched in 1997. The two separated in 2010 and are currently selling off their shares as part of a divorce settlement. Last year, both DeLeon and Parasol agreed to divest their holdings in bwin.party in order to avoid regulatory hurdles associated with the New Jersey licensing process.
For more information, check out Roger Parloff's piece at Fortune.