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Poker News | World Poker News

Bad Beat for the Bank Behind the Full Tilt Fiasco

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In what has become known as Black Friday, among the ruins of the Department of Justice’s legal actions against Full Tilt Poker in April was the downfall of the bank behind the illegal money handling – SunFirst Bank.

For such a small bank, SunFirst had huge problems, which is what led the bank down the twisted illegal road of processing online transactions for full Tilt Poker. That poor decision found them hooked around the throat by the long arm of the law.

The bank’s headaches started when their home-building and land development loans started going in the toilet following the mortgage meltdown in 2007. Since SunFirst Bank was the biggest real estate lender in St. George, Utah, they were caught up in a tangle of financial and legal predicaments resulting in the credit crisis. They found themselves unable to absorb loan losses and in October of 2009, they were under pressure from the Federal Deposit Insurance Corporation (FDIC) that ordered the bank to immediately do whatever they could to find more capital.

The FDIC order is still in force, which seems to be the catalyst that sent the leaders of SunFirst Bank into the arms of Full Tilt Poker, who needed a bank to process deposits and withdrawals for their online poker players. That bad decision made out of desperation to raise operating capitol resulted in a federal indictment by the Department of Justice (DoJ) last April of John Campos, vice chairman of SunFirst. Campos is charged with unlawfully arranging to process Internet poker transactions for Full Tilt Poker through the bank - in return for a mammoth infusion of desperately needed fresh capital.

Pressure put on the bank by the FDIC also likely led to them selling stock to Jeremy Johnson, the St. George businessman and philanthropist. Johnson now resides in the Davis County jail charged with mail fraud by a federal grand jury. If his legal hole wasn’t deep enough, the Federal Trade Commission has a lawsuit pending against Johnson, accusing him of an Internet marketing scam where he defrauded consumers out of $275 million.

What started out as a headache for the bank turned into a full blown, never ending migraine with their finances continuing to spiral down the drain. Since The Black Friday crackdown, bank President John Allen has been demoted. His would be successor, Gerry Smith, is warming the bench while he waits to see if the FDIC and the Utah Department of Financial Institutions will allow him to take over as the new president of SunFirst. In the meantime, the bank’s daily operations are still limping along run by the same old board with Campos rumored to still be involved.

Although there is no clear cut law that makes playing poker online illegal in the USA; with the passage of the UIGEA, it is unlawful for US banks to process deposits or withdrawals for online poker sites. This is where SunFirst ran afoul of the law and the powerful DoJ. The bank may now be in a hole so deep both financially and legally that they won’t be able to dig themselves out. It comes as no surprise that recent analysis of publicly available financial data shows that SunFirst Bank is still in deep financial trouble.

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