Todd Witteles aka “Dan Druff,” owner of the site PokerFraudAlert has gone public over the weekend with a series of emails dating back to this spring between himself and former Poker Room Manager for Lock Poker, Eric Lynch. Lynch had originally agreed to talk to Witteles about his role at Lock and what he knew at the time – and what he found out subsequently – about the illegal actions taken by the company and its owner Jennifer Larson, which led to the loss of between $10 and $15 million in player funds before the site ultimately closed down for good in April.
A chain of scandals
The history of Lock Poker is one long chain of scandals, often feeding into one another in an increasingly desperate cycle that could only ever have ended in disaster. The site was initially modest in scale, just one of many smaller online card rooms operating in the pre-Black Friday years. After the unsealing of United States v. Scheinberg, all these smaller sites had to make a choice between shutting down, continuing to operate but serving only non-U.S. clientele, or continuing to serve U.S. customers in violation of the law.
What Larson opted to do with Lock was not only to stay, but to treat the crisis as an opportunity, ramping up operations and hoping to fill the void left by those sites which opted for compliance with the law. Of course, rapidly expanding a company requires a lot of free capital; Larson acquired a large team of sponsored professional players to promote the company and began development of Lock’s own proprietary software, so the company would be free to operate on its own terms rather than dependent on networks like Cake and Merge. Both of these initiatives were expensive, and meanwhile U.S. authorities were seizing some of the funds being paid out to players, putting an additional financial drain on the company.
The usual way to raise capital is of course to find investors, but this is quite a bit more difficult when your company’s business is illegal. Unable to procure the necessary funds through normal means, Larson opted to fund the company’s expansion using player funds. This would of course be illegal in a regulated poker economy, but since the business was illegal to begin with, there was nothing to prevent her from doing so.
It’s Lynch’s belief – and likely the truth, in my opinion – that Larson did not believe that she was stealing; her thinking was probably that as the business grew, profits would grow as well, to the point that she’d be able to replace the funds. Effectively, she was treating her player base as an unwitting and unwilling group of investors. Of course, as we all know, poker as an industry has been contracting rather than expanding since Black Friday, so this was a plan that was doomed to fail from the start.
At some point, Larson must have realized this, but rather than attempting to scale down and mitigate the damage, or at least postpone the inevitable, she began spending even more lavishly, culminating in a hugely expensive, week-long retreat at a castle in Portugal for a group of Lock pros, employees and potential investors. It’s possible that she knew Lock was doomed and just wanted to keep the band playing on the Titanic, as it were. More likely, though, it was a desperate bid for investment capital, hoping that by projecting the image of wealth and success, she’d make others more likely to trust her with their money; based on the few con artists I’ve had the misfortune of encountering personally, I think that this is a pretty common strategy.
The trouble with Larson
The plot arc for Lock’s downfall is one that’s all too common. It’s something that almost always happens when a person makes the mistake of tying their sense of self-worth too tightly to the idea of success, whatever that word means to them. It can happen in business, in politics, in sports, at universities, and anywhere else some people visibly succeed and others visibly fail. It’s a mistake that society encourages us to make, unfortunately; neither the media nor the general public is usually much inclined to celebrate those with the wisdom necessary to know when to call something quits and move on. Instead, we celebrate persistence in the face of adversity, which is of course a commendable quality when it does ultimately lead to success, but one which can become pathological if taken too far.
You can see the basic pattern playing out in tiny ways and in big, from minor cases of academic plagiarism, say, or Ben Warrington’s recently-confessed oversell scam, all the way up to outright tragedies like the case of Christian Longo, as described in the book True Story by Michael Finkel, and recently made into a movie by the same title. Longo’s attempts to succeed (or appear successful) at all cost began small enough – small lies, pinching cash from a register – but spiraled to the point that he eventually murdered his wife and children in order to avoid having to admit his failure to them.
Whatever the endpoint of the cycle ends up being for a given person, it always starts out the same way; the person feels that they’ve worked hard enough to be owed success. When it doesn’t come to them, they feel wronged by the world, but also fear how others will see them; that they will be perceived as “a failure,” rather than simply as someone who has failed. They start by bending the rules a little bit to try to squeeze a success out of a failure. When that doesn’t pan out, admitting to their misdeeds would only compound the embarrassment of failure, so they feel they have no choice but to resort to ever more desperate deceptions to try to avoid losing face. The pattern tends to continue until circumstances are such that no amount of further wrongdoing can prevent the truth from coming out; the longer this takes to happen, the more things are likely to have escalated by the time it does.
Lock’s run was a good long one, so the sums of money involved were quite large by the time Larson found herself with no further room to maneuver. The damage could have been reduced if someone like Lynch had intervened at any point, but there was never any chance of Larson herself throwing in the towel until forced to do so. She likely knew on some level that what she was doing was wrong and that she should stop before things got worse, but the consequences to her ego of admitting so would have been too high. It’s fortunate for the poker world that she didn’t end up receiving the investment capital she was looking for to keep the site going. If she had, it’s anyone’s guess how much further out of control things could have become before the inevitable crash-and-burn.
The trouble with Lynch
Lynch’s emails to Witteles are likewise a fairly typical example of the psychology of those taken in by such cons. It’s not uncommon for the victims of confidence artists to continue to have positive feelings for them even as they begin to sense that something isn’t right; this goes equally for those, like Lynch, who end up being used as collaborators in their schemes. They’re called confidence artists for a reason, after all. Indeed, at least for the type of con artist I’ve described above, it’s pretty hard not to like them precisely because they genuinely do want you to like them; in my opinion and experience, it’s that misguided drive to earn people’s respect at all cost that starts them down that road in the first place.
In the emails, even as he’s detailing his increasing misgivings with Larson’s behavior over the years he worked for Lock, Lynch repeatedly talks about how loyal Larson was to those on her team. He even goes so far as to cite this as his take on why she attempted to cover for and defend Lock pro Jose “Girah” Macedo after he was revealed to have cheated in order to win a promotion on Lock. The actual reason is likely that Larson again wished to avoid looking bad at any cost, but Lynch feels that she was simply “loyal to a fault,” and unwilling to throw anyone working for her under the bus.
Lynch also talks about his personal relationship with Larson, and how she was there for him in tough times, such as when he was going through a divorce. This is again typical of confidence artists I’ve encountered; they attempt to leverage business relationships into personal ones, both because it gains them the validation they crave, but also because it makes it harder for people to say no to them later; indeed, Lynch finishes off his last email to Witteles by saying that he’s unwilling to go public with what he knows about Larson because he still feels some loyalty to her, even after everything that’s happened.
Poker, ambition and the entrepreneurial spirit
Poker players and entrepreneurs have a lot in common, in that self-belief and ambition are critical to success in both worlds, and that both are fields that draw in people who crave self-determination and aren’t comfortable working somewhere in the middle of a hierarchy. It’s not surprising, then, that there’s a lot of overlap between the two, and so many professional poker players branch out into related endeavors, such as coaching, authoring books, or working on the business side of poker itself.
It’s also not surprising that poker also leads to so much dishonest behavior, both on the playing and business sides of things. After all, it’s the same traits that help one succeed in these fields which, when taken too far, can lead to cheating, conning and other forms of shady behavior. The only thing that’s surprising to me about the Lock saga – and Ultimate Bet, PokerSpot and so on – is that they still seem to be the exception, rather than the rule.
But again, it’s often being faced with impending failure that knocks a person’s moral compass off kilter and starts them snowballing down the slippery slope of dishonesty, and for most of the past decade, poker was enjoying a boom which made it easy to succeed as a player and as an entrepreneur. Now that we’re collectively feeling the other side of variance, I worry that stories like these will only become more common.
I hope I’m wrong, however. I hope that more players and site owners have the integrity to call it quits when they see no honest way forward, and I believe that we all should praise them when they do. When someone moves on to greener pastures in the face of adversity, that doesn’t make them a failure or a quitter, it makes them someone who could have decided to cheat, but didn’t.
Alex Weldon (@benefactumgames) is a freelance writer, game designer and semipro poker player from Montreal, Quebec, Canada.