OLD ONLINE GAMBLING NEWS CAN STILL BE REVEALING

25 May 2007

Settled Aussie sportsbetting case resurfaces

The Australian newspaper The Age delved into the recent past this weekend to uncover a little-reported settlement in the high roller tussle between International All Sports online sportsbook and The Commonwealth Bank of Australia, and what fascinating reading it made.

Readers may remember 2003, when the news that a branch manager of the bank, Kim David Faithfull was found to have misappropriated almost 20 million Aussie dollars to feed his big thirst for sportsbetting (see previous InfoPowa reports) Faithfull, a branch manager in the Pilbara mining district of Western Australia, was eventually convicted and jailed for stealing $18 998 309.36 from the bank.

Between 1999 and 2003 he pumped all but $2 million of the money into his betting accounts with International All Sports.

The Age recalls that the Commonwealth Bank wanted its money back and sued IAS in 2004, later adding IAS founder Mark Read to the legal action. The bank alleged that the betting company knew that the income Faithfull got from his job with the bank could not have supported his huge betting, which in one year ran to almost $35 million in wagerthrough. IAS denied the allegation.

The dispute went low profile, generally evading the public domain, but on Friday, December 22 last year - the last business day before Christmas - IAS released a two-paragraph statement revealing that the fight was over. The Age reports that this brief statement appears to have attracted virtually no publicity.

In the statement, IAS revealed that it had settled the bank's litigation with the repayment of $7 million, with no admission of liability. The IAS board said it believed the settlement fair and reasonable and finally put an end to a legal matter that had distracted the company from its business operations.

The lawyers did rather well out of it, harvesting legal fees to the tune of $1.6 million.

The Age's report resurrects some of the fascinating elements in the case. For example, when the bank sent investigators in to Faithfull's branch they found a handwritten note from Faithfull, who had with commendable diligence if not honesty entered the word "stolen" against nearly $19 million recorded in a "foreign currency notes" suspense account. The betting branch manager had also left a handwritten confession, duly signed and dated.

In its defence, IAS claimed the bank inadequately supervised Faithfull's activities, failed to detect the thefts and failed to adequately investigate nearly $10 million in a suspense account at Faithfull's branch.

Not surprisingly, the errant branch manager was a special client of IAS which sent him wine and hospitality tickets for the Melbourne Cup horse race meeting. But the bank claimed that despite this IAS did not regard Faithfull as a knowledgeable (or "smartie") gambler. Quoting from an internal IAS memo, the bank illustrated his importance as: "(Faithfull's) internet revenue is clearly the main reason for our excellent internet figures from May 2002 to August 2002 … without the trade of (Faithfull) our results for the financial year to date would be a loss in excess of $500k."

Further accusations made by the bank involved IAS founder, Mark Read who it claimed directed two IAS employees not to inquire about the source of Faithfull's gambling funds - an allegation to which Read did not admit.

Faithfull explained his wealth to an IAS employee as the results of dealing in mining stocks, but did not disguise his employment with a bank or his identity. His deals were transacted through the Commonwealth Bank, and the sportsbook did not suspect that anything was wrong, it claimed.

IAS has fallen on harder times since it listed in 1999, reports The Age, revealing that its share price has declined from $2 when it listed to a current low of 29 cents.

Online Casino News courtesy off InfoPowa