Straight Flush: The True Story of Six College Friends Who Dealt Their Way to a Billion-Dollar Online Poker Empire--and How It All Came Crashing Down . . .

by Ben Mezrich

  He quickly shifted right and headed for door number two.

  It wasn’t a bathroom—it was even better. A second later he found himself outside in an alley behind the casino. To his left, a narrow road curved up the hill back toward the plaza; elegant lampposts lit the way to his palatial hotel and the comfort of his marble bathroom and canopied bed.

  Wiping vomit from his lips, he staggered upward, lamppost to lamppost. It dawned on him as he went that these were the same curves the Formula 1 cars would take, tires screaming against the pavement, as the entire city applauded and cheered.

  In Brent’s inebriated mind, he was suddenly one of those race cars, tearing through the city—it was a wonderful feeling, a high that felt like it was never going to end.

  CHAPTER 24

  AUGUST 2006

  Pete read through the fax on his desk for the third time, but still the numbers didn’t change. His gold-plated Cross pen—etched with the SAE insignia, a gift from the house when he’d handed over presidential duties to the president before Brent—danced in the air, rising and dipping precipitously between his first and second fingers; still, he couldn’t bring himself to mark up the document. Because really, what was there to say?

  The fax was only the first page of the report that the M&A fund had made of their nearly complete third-year financials, but it told Pete, and everyone else, everything he needed to know. The company’s revenues had increased by more than 100 percent, year over year, and they were now funded at a valuation of more than one hundred million dollars. Since Pete was working in accounting and heading up an affiliate team, Scott had asked him to go through the report and add his input, point out things they might need to work on in the last few weeks before they were set to begin their IPO talks—but there was very little that Pete could think to add. One-hundred-million-dollar valuation, revenues exceeding forty million a year, and all of it increasing at a rapid pace.

  Pete spun the pen between his fingers, its gold surface flashing in the sunlight that streamed in off the bay, reflected through the large picture window behind his desk. The view was spectacular, a straight shot through a corner of the financial district to the water, high enough to see over the low pincushion of office buildings, with sight lines to the mountains to the east as well. But in the past few months he’d gotten used to that view; the giant numbers on the fax were much harder to digest.

  Still, he had to give Scott something. His salary had already been bumped up twice since they’d launched the Vancouver office and management had hired their new Fijian-Canadian CFO, who went by his first name, Shay. He began to scribble in the margins of the fax about dropping some of Brent’s more disreputable payment processors when he heard a tapping on his office door.

  He looked up to see Megann Cassidy, one of his marketing department heads—another recent hire, Canadian with an advanced business degree from McGill—standing in the doorway. Her face looked pale, and she was leaning into his office like she was trying to make herself even smaller than her five-foot-five frame.

  “Mr. Barovich? I think there’s something going on in the lobby.”

  Pete put his pen down on top of the fax.

  “What do you mean?”

  “Well, these two ladies came in a few minutes ago,” she said, pausing as Pete nodded. Pete had seen them come in; he had been on his way back from lunch and had just gone through the glass doors that led from the lobby into the cubicled Marketing and PR Department when he caught sight of the two women. The truth was, they would have been hard to miss. Both were dressed in dark gray business pants, matching blouses, and heavy gray jackets. One was tall, at least five ten, the other around five seven. Both had dark hair—one in a tight ponytail, the other bunned up on top of her cubic head. Neither had been smiling, which was strange, considering it was Canada. Everyone seemed to smile in Canada.

  “Well,” Megann continued, “they just showed Lucinda their badges. They’re agents with the RCMP.”

  Pete stared at her. RCMP: the Royal Canadian Mounted Police, Canada’s version of the FBI.

  “What do they want?”

  “I don’t know—” Megann started, her voice shaking, and then the phone on Pete’s desk buzzed to life, signaling a call from the lobby. He waved Megann away, and she backed out of the office in full reverse, shutting his door behind her. Pete took a breath, then lifted the receiver.

  “What’s going on, Lucinda?”

  The moment Pete heard Lucinda Palmer’s voice, he knew that something big was happening. The secretary was as fierce as they came; in her midthirties, she favored leather skirts, high boots, and thick wool jackets, and she had been hired to man the front lobby specifically because she knew how to handle people without ever losing her cool. It was a lesson Pete had learned running numerous businesses since college: the customer may always be right, but he’s often also an asshole.

  But this was something different. These women weren’t customers, they were federal agents. And Lucinda sounded like she was almost in tears. She told Pete that the women were asking for whoever was in charge. She’d tried to connect them to Shay, but Shay wasn’t answering his phone. Shay’s secretary had told her that he wasn’t there, but Pete knew that wasn’t true—Shay had returned from lunch a few minutes before he himself had. So if Shay was avoiding them—well, maybe that wasn’t such a bad idea.

  “Tell them I’m sorry too, I’m just on my way out.”

  He quickly hung up and rose from his desk. He crossed to the door of his office, quietly pulled it open, took one step out into the hall—and saw his newly hired CFO about five yards away, down on his hands and knees, literally crawling behind the row of cubicles. The heavyset Fijian cut an absurd figure; all six foot three of him, dressed in a tightly fitting tailored suit and tie, his face inches from the carpet as he tried to stay below the sight line of the women on the other side of the glass wall that separated the cubicles from the lobby.

  Pete realized with a start that Shay was heading for the fire exit. Within minutes, the CFO crawled the last few feet to the fire door, then raised himself to a crouch. He looked back at Pete and made a frantic gesture with a tanned hand, telling him to follow. Then the man put his weight into one thick shoulder and leaned into the door. The door came open, and then Shay was gone, sprinting heavily down the fire stairs.

  Pete swallowed. He glanced toward the glass lobby wall; he could barely make out the two federal agents, the ponytail and the bun, as they berated Lucinda. He knew he had to make an immediate decision, because any second now, those women were going to push past the secretary—and God only knew what might happen next.

  So he did the only thing he could think of, and dropped to the floor. Hands in front of knees, he crawled toward the fire exit as fast as he could.

  Five minutes later he was standing next to Shay at the window of the Starbucks across the street, watching the RCMP agents rifling through his office. He had no idea what they were looking for, or even if they had the legal right to do what they were doing. He and Shay had put three calls through to Scott and the Absolute Poker legal team, but they hadn’t heard back yet. He was pretty sure Scott was actually on vacation somewhere in Europe with a girl he’d begun seeing seriously; Pete had heard from Garin that the girl was a real head case, and not a long-term potential—par for the course, since Scott’s relationships usually involved so much drama. At the moment, Pete wouldn’t have given a damn if she were a spear-toting harpy. He needed to talk to Scott or their lawyers, because he had no idea what they were supposed to do next.

  Another twenty minutes went by, he and Shay standing in the Starbucks in near silence, and finally the two RCMP agents left the way they had come, through the building’s front doors. Pete and his CFO waited another ten minutes, then decided it was safe to go back inside—via the elevator this time, not the fire escape.

  When the elevator deposited them back on the third floor, a loud buzzing sound greeted them. It was coming from the financial wing, where
Brent had set up his processing department before he’d gone back to Costa Rica. It took Pete a full minute to realize what the buzzing was—and when he did, his face went a shade paler. Paper shredders, running nonstop. He had no idea what, exactly, was being shredded, or by whom. And he decided that he didn’t want to know.

  Instead, he led Shay into the lobby, where they found Lucinda slumped behind her desk, in tears. After she’d gone through a box of tissues, she told Pete that the RCMP agents had first demanded to know who was in charge—and then they’d demanded to know what, exactly, was going on in the third-floor offices. Lucinda had been both terrified and bewildered; the RCMP couldn’t be there to arrest anyone, because they weren’t even sure what sort of business the company was in. In fact, as far as Pete could gather from the questions they’d asked Lucinda, the agents were only there because a high-level Canadian official was convinced something illegal had to be transpiring, simply because of the amount of money that was moving through the building in such a short period.

  It was ridiculous, sheer harassment—and yet Pete could understand the terror Lucinda was feeling. When she told him that fully three-quarters of the staff had already quit—dropping their ID cards on the lobby desk on their way out—he realized that this wasn’t the sort of trouble they could simply get past. He looked at Shay and could see that his CFO was thinking the same thing. If the RCMP had sent agents to harass them in the middle of the day, there was a good chance that it was just the beginning. Soon there would be more agents, search warrants, maybe even confiscations.

  Pete also knew that in the back of those offices there were computer servers engaged in running their hundred-million-dollar business; if the RCMP confiscated those servers, even under illegitimate orders, it could destroy Absolute Poker.

  He thanked Lucinda, did his best to comfort her, then accepted her resignation. He told her that they would pay everyone who had quit double their expected severance. Then he pulled Shay aside and lowered his voice. “We need to find a U-Haul truck—fast.”

  Ten minutes past midnight, and Pete rolled the oversize U-Haul the last few yards into the parking lot behind his office building with the engine off. Shay, in the seat next to him, hunched as low as a 250-pound person could hunch, was sweating beneath his three-piece suit.

  “Are we really going to do this?” Shay asked, but Pete didn’t answer. He had already spoken to Scott twice, and he knew that they didn’t have a choice. As wrongheaded as the RCMP seemed to him, there was no reason to believe that they wouldn’t go after their servers next—and that simply couldn’t happen. As far as Pete knew, the company hadn’t broken any Canadian laws, and the servers were their property. The computers themselves were worth six figures, but the information on them was worth potentially many millions.

  Pete got out of the truck, Shay behind him. They made their way through the darkened lobby. When they got to the elevators, Pete swiped his key card into the after-hours security slot—and instantly discovered that his key card no longer worked. Another really bad sign. He looked at Shay, wondering how they were going to get through, when he heard noise from the far corner of the lobby. He turned to see a cleaning man in a blue janitorial uniform dragging a heavy vacuum cleaner toward the thick shag carpet.

  “Wait here,” Pete said to Shay. Then he hurried over to the janitor. The man recognized him, of course; Pete and Shay had often worked late since setting up the new offices. It wasn’t unusual to see them there well after midnight.

  “I think my card got demagnetized,” Pete said, offering as easy a smile as he could. “I wonder if you could help me out.”

  Before the man could answer, Pete pulled out his wallet and took out a fifty-dollar bill. The janitor looked at the money, then shrugged, smiling back.

  “Happens all the time,” he said. And he handed Pete his own key card. “Just bring it back on your way out. I should be here all night.”

  Arriving on the third floor, Pete and Shay went to work like men possessed. They found a pair of huge metal roller carts in a supply closet behind Lucinda’s desk, then went through the offices, grabbing everything they could get their hands on—not just the huge servers, which were boxy steel cabinets the size of small tables, but also laptop computers, monitors, phones, and any notebooks that looked important. All of it needed to be done in one trip—two people, two roller carts, and enough stuff to fill an entire office floor. Since they could fit only the crucial material, they had to leave behind hundreds of thousands of dollars’ worth of equipment. But there was no choice. An hour later, having gotten as much onto the carts as they could manage, they headed for the elevator. Then Pete remembered one more thing. He rushed to his office and retrieved his gold SAE pen. Shoving it into his jacket pocket, he ran back to Shay, and they took the elevator back down to the lobby.

  Adrenaline pumping, they began to push the two roller carts across the freshly vacuumed thick shag rug. Just as they reached the doors leading out to the parking lot, the janitor rushed toward them. Pete remembered the key card, yanking it from his pocket and offering it to the man. The man grabbed it, then lowered his voice.

  “I just got a call from the owner. He said the cops were on the lookout for anyone who worked in your company. I told him you just left—so you’ve got about five minutes at the most to get out of here. Good luck.”

  Pete and Shay sprinted the last few yards to the U-Haul truck, pushing the metal carts in front of them. They threw the computers and equipment into the back, trashing most of it in their haste, then slammed the doors and started the engine.

  They could see police lights flashing in the rearview mirror as they pulled away from the office building.

  It was 5 A.M. by the time they finally got Scott on the phone. They were in Shay’s apartment, in a corner of his brightly lit kitchen, standing a few feet from the refrigerator—because that was where Shay’s only landline was connected and neither of them wanted to use their cells.

  As Pete had guessed, Scott was somewhere outside of Paris; there was a woman’s voice in the background, but it was hard to tell from her accent where she was from. Pete had barely gotten three words across to his friend before Shay had calmly taken the phone out of his hand. Leaning back against a granite kitchen counter, the oversize CFO methodically told Scott exactly what had happened. He explained that after they had left, they had made some inquiries and had found out that the RCMP had indeed opened up an investigation.

  Pete couldn’t hear exactly how Scott responded, but obviously he wasn’t taking the situation quite as seriously as Shay wanted—because one second later Shay’s face turned bright red, and everything calm and methodical about him went right out the fucking window. He began screaming into the receiver, “You better fucking figure this out, and get us legal right now! You better get us some fucking lawyers and get this shit under control—”

  Pete wrestled the phone out of Shay’s hand. He gave the man a moment to calm himself down, then put the receiver to his own ear and listened to Scott, who was obviously trying his best to remain rational in the wake of their CFO’s meltdown.

  “What do you want us to do?” Pete finally asked. Shay had slumped to the floor, shaking his head.

  “I want you to get your asses back to Costa Rica,” Scott responded quietly. Then he hung up the phone.

  Pete replaced the receiver, then dropped to the kitchen floor next to Shay and rested his chin in his hands. Shay glanced at him.

  “Are we doing something illegal?” Shay asked.

  Pete didn’t answer. He didn’t know what to say. He had sold his whole life and moved his wife and dogs to Vancouver, he had been there a few months, and the whole thing felt like it was blowing up around him. He was only twenty-nine years old, but even at that young age he knew that this wasn’t the way a billion-dollar company was supposed to be run. And up until that moment—that vivid, seemingly frozen moment with his CFO on his hands and knees and federal officers standing in the lobby—Pete had thought that
Scott’s company was just like any other rapidly expanding Internet corporation, providing a service for millions of people, revenues skyrocketing as the world moved online. In just a few weeks they were supposed to start preparing for a billion-dollar IPO. Hell, there was still a fax sitting on his desk in his ravaged office with numbers telling him that the company Scott had founded was worth more than a hundred million dollars at that very moment, with revenues in the tens of millions.

  But now he had to wonder.

  What, exactly, had he gotten himself into?

  And where did they go from here?

  CHAPTER 25

  Two weeks later, on a Friday night in September, Pete still hadn’t quite gotten a handle on what happened in Vancouver. The next few days had been a whirlwind, setting up the rescued servers in an apartment near their raided offices so that the accounts could keep spinning—a hundred-million-dollar company basically run out of a one-bedroom, four-hundred-bucks-a-month walk-up—and then hightailing it out of Canada, wife and dogs in tow. As far as Pete knew, he personally wasn’t in any trouble. He hadn’t broken any laws that he knew of, and there hadn’t been any Canadian federal claims made against Absolute Poker either. But Scott hadn’t wanted to take any chances—if the Canadians didn’t want them there, they would leave.

  That’s how it had been with Absolute Poker from day one: if someone wanted to regulate them, they were happy to comply with any and all rules. In the UK, online poker was indeed taxed and regulated, and as Party Poker had proven, you could successfully IPO on their exchanges. In many other countries as well, Absolute Poker was licensed and approved, paying whatever fees were necessary—or, in other cases, simply blocking people from playing when a country made it clear that it wasn’t legal to play from there. Players from China, for instance, weren’t accepted by Absolute Poker; it was as easy as blocking any computer with a Chinese ISP.