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Government Seizes $4.8MM+ From Oregon Poker Pro for Online Piracy

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Judge Anna Brown is a District Judge from the US state of Oregon whose May 7 ruling regarding an Internal Revenue Service (IRS) matter has intersected with the world of poker. Judge Brown directed the IRS to hold on to more than $4.8 million in cash, crypto-currency, and real estate seized from Talon White, a professional poker player in Newport, Oregon.

The seizure was not connected to poker but rather related to illegal online streaming services selling copyrighted content such as pirated television shows and movies. Talon White is also suspected of money laundering in connection with the revenues he derived from these enterprises.

Photograph of Judge Anna BrownSenior United States District Judge Anna Brown Ordered the IRS to Keep Talon White's Seized Possessions

About the Alleged Culprit

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The gentleman targeted is 28 years of age. His identity was at first kept hidden by news outlets reporting on the story, but court filings show that it's Talon White. He's an Oregon-based poker player who has about $100,000 in live tournament cashes, including a 14th place finish in the WSOP $10,000 Limit Omaha/8 Championship event in 2018.

Photograph of Talon WhiteTalon White at the World Series of Poker in 2018

Talon's total career winnings of a bit more than $100k over the course of seven years are not enough to really entitle someone to refer to himself as a poker pro. However, White's lawyer has confirmed that her client is a professional poker player. Thus, it's highly likely that Talon White is active in Oregon tribal casinos or perhaps plays Oregon online poker on a day-to-day basis with live tournaments representing just a supplemental source of income.

Assets Seized

Money Bag

The authorities took into their possession various property belonging to White, including funds held in the name of Viral Sensations Inc., a company over which White had control. A search and seizure warrant dated Nov. 13, 2018 gave law enforcement the power to conduct a raid at White's house on Nov. 15. The full list of seized assets, as best we are able to determine at present, is as follows:

  • $2,457,790.72 in a Chase Platinum Business Checking account in the name of Viral Sensations
  • $1,266,650.00 in a Chase Platinum Business Checking account in the name of Viral Sensations
  • $1,383.68 in a Chase Platinum Business Checking account in the name of Viral Sensations
  • $200,653.71 in a Chase Premier Platinum Checking account in the name of Talon V. White
  • $32,921.00 in US dollars captured from White's residence:
    • In White's wallet: $1,521
    • In nightstand: $5,200
    • In safe: $26,200
  • $1,940.77 in a Stripe account belonging to White
  • 31.53810677 Bitcoin (BTC) (worth approx. $254,605.24) in White's Coinbase account
  • 1,022.390668 Ethereum (ETH) (worth approx. $257,407.30) in White's Coinbase account
  • 5.74017141 Bitcoin Cash (BCH) (worth approx. $2,372.13) in White's Coinbase account

Later during November 2018, the government filed to seize Talon White's home in Newport, Oregon, which had been purchased for $336,000 in January 2017.

Adding up the value of all the cash, cash equivalents, real estate, and crypto-currency at stake in this case, we arrive at the staggering figure of $4,811,724.55.

Cash and Bitcoin Seized in Oregon Piracy Case

Background and Investigation

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The case originated in October 2013 when PayPal sent information to Homeland Security Investigation (HIS). This regarded the www[dot]noobroom7[dot]com and www[dot]noobroom[dot]com websites. These sites enabled the streaming and downloading of copyrighted television shows and movies.

The MPAA was contacted to determine if the websites were authorized. The MPAA protects the intellectual property rights of the television and motion picture industries while monitoring for illegal distribution and reproduction. The report provided to HSI by the MPAA in November 2013 stated that the above websites did not have authorization from the holders of the copyrights.

The websites charged a $9.99 monthly subscription fee from their users. Revenue was also received from Lanista Concepts for advertising on the sites. Payments were processed using a United States company called Stripe, which operates in a similar fashion as PayPal.

An email was sent by the MPAA on July 17, 2014 to Noobroom. Noobroom was told to stop operating these illegal websites because they violated copyright laws. The letter included a list of television shows and motion pictures used illicitly by Noobroom. Several days later, the undercover subscription the MPAA placed with Noobroom received an email from Noobroom stating that a new website was being used for the service: www[dot]superchillin[dot]com.

Logo of NoobroomNoobroom Offered Subscriptions Allowing Users to Download Illegal Content

The HSI agents obtained the IP address of Superchillin by downloading movies from the new website. The servers were hosted by Hosting Services Inc. This account was linked to Talon White and a phone number associated with him.

Two additional sites were identified in June 2016. When the HSI agents tried to renew their subscription in 2017, they found a notification stating the site had moved again. Talon White was listed for the billing, administrative, technical, and registrant contacts of the new site.

HSI agents downloaded content from these sites from 2016 to the present. Financial records led the agents to determine that substantial revenue was being earned from these websites.

In an official declaration submitted to the court, IRS Special Agent Keith Druffel stated:

13. Based on financial records obtained during the investigation, I determined that White received substantial revenue from the above-listed websites. In 2018, he was averaging revenue over $500,000 per month. In 2017, White received over $2.2 million. In 2016, White received over $1 million in revenue, and in 2014 and 2015, White received on average about $400,000 a year in revenue.

Follow the Money

Coins and Currency Bills

In order to gather evidence leading to the seizures, the authorities monitored the flow of Talon White's funds. They found that the subscriptions for the illegal streaming sites were paid into Stripe and PayPal accounts controlled by White. The money was then withdrawn into a number of White's bank accounts.

From there, Talon used the money to purchase crypto-currency, his house, and other miscellaneous goods. It seems he paid for his home upfront with the majority of the purchase price being covered by a single bank wire he sent from a Wells Fargo account to a company called Western Title & Escrow. This Wells Fargo account had allegedly previously been used to receive $1.4 million from his illegal online businesses.

Talon White not Charged

Courthouse Building

Talon White has not been charged with any crime, nor has he been arrested. The seizures of his property were performed under civil asset forfeiture laws. Thus, he's not listed as a defendant in any of the court proceedings related to these assets.

This is interesting since the seizure complaint includes two major violations, copyright infringement and money laundering. Both of these offenses usually incur significant prison sentences.

As is common in civil asset forfeiture, the name of the case is presented as though the government were suing the property involved directly. For instance, the action relating to the repossession of the house is listed as:

Case Name for Oregon Civil Forfeiture Proceedings

The only choice White has left is to try to fight the seizures by filing in court as a claimant. Thus, the onus is on him to prove that the money and crypto targeted were not involved in the crimes that he supposedly was involved with. It's not up to the IRS to prove anything.

Given the fact that Talon White has not yet been arrested, the authorities may be trying to use the possibility of his being detained in the future to obtain a more favorable outcome. Perhaps they would be willing to let the entire matter drop, and even maybe return some small fraction of his belongings, should Talon “voluntarily” acquiesce in the repossession of the bulk of the assets seized from him.

Another possibility is that officials are playing hardball with White in order to convince him to testify against others. In the declaration of the IRS agent assigned to the case, we find the following sentence:

…I do believe, that beginning in at least 2013 and continuing to the present, White engaged in a scheme with other known and unknown co-conspirators to reproduce and distribute copyrighted material, including motion pictures and television broadcasts, for the purpose of personal financial gain by making it available on a computer network accessible to members of the public by subscription.

It could be that White is viewed as small fry, and the authorities are putting pressure on him to cooperate in order to go after these “known and unknown co-conspirators.”

Talon Trying to Fight Back

Two Pistols

Rain Minns is the Texas defense attorney specializing in white-collar crime who's working with Talon White. She has said regarding his case:

We don't generally comment on a current case, but as a matter of principle the government should not grab a person's assets and strip them of their resources unless and until proven guilty.

Rain Minns of Minns Law FirmTalon White's Attorney Rain Minns

The Minns Law Firm submitted an “Answer and Affirmative Defenses to the Government's Civil Complaint for Forfeiture in Rem” on April 5. In it, Minns lays out the reasons why the seizure of White's properly is illegitimate.

This document states that White's Fourth Amendment right “to be free from illegal searches and seizures” was violated. The warrant authorizing the actions taken against him was “impermissibly vague, based on misleading, incorrect or illegally obtained information, was otherwise defective, or was improperly executed.”

Furthermore, the text argues, the government deprived him of his property without due process, a violation of the Fifth Amendment. Also, the seizure contravened Eight Amendment provisions against excessive fines.

At the heart of Talon White's defense is the claim that the government has not established any connection between the property it repossessed and the crimes that were alleged to have occurred. White demands a trial by jury, as is his constitutional right, before any assets are taken from him.

The answer filed by Talon White's attorney will not be sufficient in and of itself to forestall the forfeiture of his property. Judge Brown has decreed that he must file a formal Claim as required by the Federal Rules of Civil Procedure before June 3.

About Civil Asset Forfeiture

Judge's Gavel

The current practice of civil forfeiture has historical roots in the old English common law concept of the deodand, which held that chattel property that caused someone's death had to be forfeit. This was not meant as a recompense to the victim or the victim's heirs; rather, the deodand (from the Latin “deo dandum” – “to be given to God”) was a kind of punishment that found the object or animal itself to be culpable irrespective of the guilt or otherwise of its owner.

The “guilty” property, or monetary equivalent, was forfeit to the Crown, which was supposed to put it to some holy purpose. After a while, this religious element of the deodand was phased out, and it simply became a fine, tied to the value of the property in question, that had to be paid by the wrongdoer.

Statutory forfeiture, as opposed to that contained in the common law, came about in the 1600s as a way of impounding ships breaking maritime law even if the owner was not present. Today, however, it is applied in a wide variety of cases in the United States, including illegal gambling, drunk driving, and tax evasion. Notably, unlike in its original form, civil forfeiture does not require that someone has died before it comes into play.

Though the purposes to which asset forfeiture is now put differ greatly from what they were in the old days, some aspects remain the same. The idea that it's undertaken against the property itself rather than any person is retained in the legal fiction that prosecution is being directed against the property rather than the owner.

Rife With Abuse

The modern revival of civil asset forfeiture in the United States came in the 1980s. As with many of the expanded powers now granted to police, it was sold as a measure to combat drug trafficking, similar to how law enforcement was able to enhance its ability to conduct warrantless searches and implement wiretaps. Like these other remedies, asset forfeiture has been abused by those in power on countless occasions.

Civil forfeiture requires only that a “preponderance of the evidence” supports the view that the property was used in a crime. This is easier for prosecutors to demonstrate than the “beyond a reasonable doubt” burden of proof demanded for criminal proceedings.

This had led to the unusual spectacle of individuals being found not guilty of any crime yet having their possessions taken from them and kept by the state. In some instances, the suspects aren't even charged with any crime at all. This doesn't prevent their items from being seized.

Challenging the forfeiture of any assets is a time-consuming and potentially expensive affair. Thus, even those who have a fair chance of winning in court are often dissuaded from trying.

Because the agencies empowered to conduct the seizure of property get to keep it unless a judge rules against them, unhealthy incentives are created. Cops who capture cash suspected of being the proceeds of crime can then use this money to purchase equipment and vehicles, which then enables them to investigate more illicit activity, resulting in further confiscations. This cycle contributes to a predatory environment, weakens trust in the law and its representatives, and, most of the time, bypasses judicial restraints on state executive authority.

ProfRB's Opinion

Pen on Paper

We're aghast at the heavy-handed tactics employed against Talon White in seizing millions of dollars' worth of his property, and indeed we have serious reservations about the growing prevalence of civil asset forfeiture in general.

The strong-arm strategy of confiscating any and all cash found anywhere that could have possibly been used in connection to unnamed crimes should be particularly worrisome to poker players. After all, they're one of the few groups in society with legitimate reasons for carrying around large amounts of money: noticeable sums that may attract the attention of greedy, incompetent, or corrupt law enforcement personnel.

Indeed, poker players have been targeted before.

In April 2013, William Davis and John Newmerzhycky were traveling through Iowa after participating in a WSOP Circuit event. They were stopped, for failing to use a turn signal, and $100,020 was seized from them. The police searched their car and discovered a massive stash of 0.001 grams of marijuana.

Later video evidence showed that the driver had, in fact, applied the turn signal correctly. And the marijuana present was adequately explained by the fact that both Davis and Newmerzhycky possessed medical marijuana cards from California.

Still, they had to embark on an expensive and time-consuming lawsuit to get their money back. Finally, after more than three years, the two of them received a settlement from the state, which, after deducting legal expenses, just about restored the amount that had been taken from them in the first place.

Talon White Displayed Poor Judgment

Notwithstanding our support for him against the shady and arbitrary application of civil asset forfeiture, though, we must conclude that Talon White is an idiot. If the testimony of IRS agents can be believed (yes, we know this is a big “if”), then it appears that White had blithely commingled his personal and business funds for several years.

Even if all of his enterprises were perfectly legitimate (yeah, another big “if”), it's just asking for trouble to mix one's finances together. At the very least, it may lead to problems come tax time. Even worse, moving more than $10,000 at once, as Talon did to purchase his home and crypto coins, triggers certain reporting requirements at financial institutions, which can lead to increased scrutiny from the federal government.

Oregon Trail MessageThe Trail of Piracy, Money Laundering, and Questionable Activities Sometimes Leads to Misfortune

Processing questionable transactions through mainstream processors, like PayPal and Stripe, is also a dubious decision. This arrangement becomes all the more astonishing when we reflect that Talon White was clearly aware of crypto-currency and how it works as shown by his balances of more than half a million dollars' worth of crypto coins in his Coinbase account. Why he didn't simply accept cryptos directly as payment is beyond our ability to comprehend.

We encourage all of our readers to avoid the missteps of Talon White in his online money-making ventures. He may serve as a cautionary example of what happens to winning poker players when they develop leaks of astounding stupidity in their lives away from the tables.