Report: UB Lawyer Daniel Friedberg Working w/ Authorities in FTX Case
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A former top lawyer for FTX who was previously embroiled in the Ultimate Bet online poker cheating scandal is working with US authorities as they investigate the collapse of the crypto trading firm that prosecutors are calling "one of the biggest financial frauds in US history."
It was recently revealed that Daniel Friedberg met with two dozen investigators �� including from the US Justice Department, Federal Bureau of Investigation and Securities and Exchange Commission �� in November 2022 and told them about FTX founder Sam Bankman-Fried's "use of customer funds to finance his business empire," according to a Reuters exclusive published today.
The report, which is based on information from an unidentified source and several emails reviewed by Reuters, states that Friedberg "recounted conversations he had with other top executives on the subject and provided details of how Bankman-Fried's hedge fund Alameda Research functioned."
Prior to his executive role at FTX, Friedberg served as lead attorney for Ultimate Bet, a defunct online poker site where insiders used a "god mode" feature to cheat thousands of players out of millions in the mid-2000s. The Reuters report noted Friedberg's involvement in the UB scandal and cited PokerNews' 2013 reporting of leaked audio revealing Friedberg, Russ Hamilton and other UB insiders admitting to cheating and plotting a cover-up.
Take a look back at the Absolute Poker & Ultimate Bet scandal
Friedberg to Testify at Bankman-Fried Trial
The collapse of FTX is proving to be one of the biggest financial scandals in recent memory. Several poker players reported losing huge sums in the FTX crash, including former pro Alex Wice who lost his "entire net worth on FTX."
As it turns out, Friedberg, who has not been charged and is not under criminal investigation, according to Reuters, will play a crucial role in the criminal case against Bankman-Fried, who in December pleaded not guilty to federal charges of wire fraud, securities fraud and money laundering.
Friedberg reportedly resigned from FTX, which a now-deleted blog post stated he was with ��from the very beginning,�� in early November as the company's dire financial situation came to light. Emails reviewed by Reuters show Friedberg telling prosecutors he wanted "to cooperate in all respects" and he is expected to be called as a government witness in Bankman-Fried's trial later this year.
No surprise there. Snake in the grass Daniel Friedberg, best known to us for being caught on tape conspiring to co�� https://t.co/adXm22Qj9T
— Todd Witteles (@ToddWitteles)
Friedberg's Troubled Past
More than a decade before he was entangled in the FTX collapse, Friedberg was at the center of the biggest cheating scandal in online poker history.
As PokerNews has reported, Hamilton and others cheated players out of more than $50 million before a Kahnawake Gaming Commission investigation found "fraudulent activity ... traced to unauthorized software code that transferred hole-card information" of opponents to those using God mode.
After finding cheating that went back to June 2003, the Kahnawake Gaming Commission issued Ultimate Bet a $1.5 million fine and ordered the reimbursement of $22 million to affected players.
Audio leaked by former Hamilton assistant Travis Makar revealed the disgraced Main Event champion admitting to stealing between $16 and $18 million from players. It further revealed Friedberg discussing ways to cover up the cheating, including a plot to make Makar the fall guy to deflect blame from Hamilton.
PokerNews will continue to monitor the former UB attorney's role in the ongoing FTX controversy and Bankman-Fried's trial.
