14 ms·

Write Gambling Software, Go to Prison

216 points by cyphersanctus 14y ago

JohnLBevan 14y ago
It's nice to know that those who are happy to ignore the law and gamble illegally still pay their licensing fees.
- pc86 14y ago
  Did you read the article? All of his clients operate in countries where gambling is legal. Most of his clients don't even operate casinos themselves.
- JohnLBevan 14y ago
  (sarcasm)
hef19898 14y ago
Seriously, if it wasn't illegal gambling where these people gambled I don't see a problem. Let them find proof for the charges. Sad thing is that it actually hurt an otherwise legal business. This and the whole megaupload story show very much the problem of law enforcement and the de-facto borderless nature of the internet.
- objclxt 14y ago
  > Seriously, if it wasn't illegal gambling where these people gambled I don't see a problem That's not the case. What appears to have happened is the guy's software was sub-licensed or resold to a company that took bets from people living in the US (which is, until the US legalizes online gambling, illegal). However, if you go by the Wired article then the Manhattan DA doesn't actually have any proof that the developer of this software knew this was going on. You can only be an accessory to a crime if you have knowledge of it: selling your gambling software to a company that you knew was running an illegal operation would be a crime. Selling it to a company that subsequently resells it to an illegal operation and doesn't tell you would not. If you go by the Wired article what seems to have happened is the developer in question had no knowledge of this, but received some terrible legal advice advising him to sign the plea bargain.
- betterunix 14y ago
  "Seriously, if it wasn't illegal gambling where these people gambled I don't see a problem." Here's the problem: New York State runs a gambling enterprise, the lottery. The lottery is a source of revenue for the state, and it is a sneaky way to tax the poor (who are the most likely to buy lottery tickets, despite the poor odds). New York State does not want competition; they already have to put up with reservation casinos, the lotteries of neighboring states, Atlantic City, etc. The last thing they want is another gambling operation that is more exciting and has a higher profit potential.
sheraz 14y ago
This is alarming. Gambling laws in the US are antiquated and intellectually dishonest. It is unfortunate the Wire Act of 1961 was written more to stop organized crime than it was to actually help regulate gambling. The language in this piece of legislation is so broad and poorly defined that states often reach conflicting conclusions. One hopes this guy can afford suitable counsel and get out of this without too much trouble. I sincerely hope a future victory will set a more business-friendly precedent.
- wissler 14y ago
  Most laws are intellectually dishonest. Creating a legal code that is so big that it's impossible to know what it is and thus, to be able follow it, is intellectually dishonest. Really, the fundamental basis of our legal system is intellectually dishonest.
  - eriksank 14y ago
    Look. It is our own fault, since we are not doing anything about it. They will never, ever respect us, unless they seriously fear us.
    - jacquesm 14y ago
      Who are 'they'?
      - eriksank 14y ago
        Who else but the politicians and their servants? We can let them erode our position further and further and further, or we could also finally start putting a stop to that. As all of us know, respect is ultimately based on the fear for reprisals. Where is the respect?
        betterunix 14y ago
        Politicians are the servants. Not of the general public, of course, but of the new aristocracy that has arisen in this country. Politicians now serve the interests of the ruling class, with the exception of minor parties.
nacker 14y ago
"Under plea agreement discussions that were never finalized by a judge, and that occurred in February 2011 before Stuart was charged with any crime, Stuart says New York authorities pressed him to install a backdoor in his software and distribute it to clients so the data of gamblers and bookmakers could be retrieved." I hope the Bitcoin community is paying attention to this.
- codesuela 14y ago
  Serious question, whats there to backdoor short of bundling a trojan with the official client? All transactions are out in the open in real time. Edit, went on to Google and found this: http://nerdr.com/shutting-down-bitcoin-really-taking-down-the-bitcoin-network/ http://nerdr.com/shutting-down-bitcoin-really-taking-down-th...
jorgeleo 14y ago
In other news, people are still looking for the inventor of the hammer to charge him with multiple accounts of manslaughter, consequence of every death in which his invention was used. People with sore thumbs are waiting for a verdict before presenting their griefs. Faraday commented: "I am not guilty of the use of electricity in Guantanamo"
- suby 14y ago
  This is not a fair comparison. A hammer has multiple purposes. In general, it is not an instrument intended to cause harm. Even a gun can be used for a purpose other than causing harm to others -- it can be argued that it serves as a deterrent to violence. What other purpose could gambling software be used for? It's irrelevant whether it was sold to overseas countries since, given the nature of the internet, New Yorkers would have access to those sites. I'm not saying that I think what is happening is right, I just think your comparison is unfair.
  - rorrr 14y ago
    > What other purpose could gambling software be used for? Educational. Recreational (no money involved). Research (like to collect gambling data). To learn how to code and/or how games/strategies work.
    - eriksank 14y ago
      Well, it may not even matter. As you can see they are very heavy-handed. That means they do not fear any reprisals for this. That is obviously where the problem is. Ultimately, respect is always based on the fear for reprisals.
  - jonknee 14y ago
    > What other purpose could gambling software be used for? It's irrelevant whether it was sold to overseas countries since, given the nature of the internet, New Yorkers would have access to those sites. That's absolutely relevant. There are US companies that make slot machines. Most places in the country their products are illegal, just like the activities that this gambling software allows for. If an underground casino gets busted and is found to have slot machines, it's not the maker of the slot machines that is in trouble (unless there is evidence they were sold illegally).
n3rdy 14y ago
Do those casino's sell their gamblers coca-cola? Better go after them, or maybe even pepsi! Those drinks are being sold to gamblers and these soft drink companies are benefiting directly from gambling proceeds!
carbocation 14y ago
> He says the New York district attorney’s office tried to strong-arm him into a plea agreement that would have had him hacking into the systems of his software clients in order to obtain the usernames and passwords of gamblers and their bookmakers to help authorities gather evidence of illegal gambling. If the premise of Harvey Silverglate's book, "Three Felonies A Day: How the Feds Target the Innocent,"[0] is correct, then this is quite plausible. A key message from Silverglate's book is that because it is impossible to know if one's behavior is lawful[1], it is impossible to be sure that one operates within the contours of the law at all times. Thus, if you would be convenient to nail not because of anything in particular that you've done but because you can probably be convinced to testify against someone higher up in their chain, beware. From my recollection of this book, this was a tactic more typically used at the federal level, so either the tactic is spreading or my recollection of its state-level use is just dim. EDIT: In response to all of the other comments pointing out other absurd choices the authorities could make (they could prosecute Pepsi since they sell soda to these operations, etc), Silverglate's book provides a nice framework for why this programmer would be targeted and not Pepsi. He's not the fodder, but he does have meaningful access to the fodder (whereas Pepsi surely does not). [0] = http://www.amazon.com/Three-Felonies-Day-Target-Innocent/dp/1594035229 http://www.amazon.com/Three-Felonies-Day-Target-Innocent/dp/... [1] = In contrast, it's often quite possible to know when one's behavior is unlawful.
- n3rdy 14y ago
  My ears are burning.
  - carbocation 14y ago
    For clarification, I agree with your implication that the authorities could make these absurd choices, not that I think your comment was absurd.
    - n3rdy 14y ago
      I understand and agree with the point you were making. Last comment was for funsies.
jcromartie 14y ago
$2.3M in cash and money orders? Isn't that a MASSIVE red flag that you are dealing with unscrupulous people? That's textbook money laundering. It's alarming on the surface, but he HAD to know he was dealing with criminals with that volume of untraceable payments. I certainly don't think he should be facing criminal charges, but I can't imagine he's actually surprised. Also, their website: http://www.extensionsoft.com/index.htm http://www.extensionsoft.com/index.htm Apparently designed in MS Word, minimal information, no product details (why not?), can't keep their own tagline straight (is it "International Software Systems" or "International Sportsbook Systems"?). I hope it's not delving into ad hominem territory, but it's a shady website no doubt.
- weego 14y ago
  First I would point out that the people he would be working with are businessmen like anyone; they don't twist their mustaches and have maniacal laughs. If he was working with companies in Costa Rica then he was working with companies that are open to US citizens, which he knew because everyone does. That's why the gambling company scene in Costa Rica is so strong, it's like we like it in the US, but at a safe distance. The idea that a supplier can be held accountable for the actions of the company they are supplying to though... well he would have to have been very closely embedded into the company for him to have had dealings with the payment processing for this to stand a real chance.
- dsl 14y ago
  In the eyes of the law a wire transfer is considered cash, money orders are negotiable instruments. Probably copy and pasted from a court filing somewhere without realizing what it actually meant.
- jonknee 14y ago
  Maybe we're reading it wrong, but "cash" doesn't have to be hard bills, just in money that he actually received. If they had received wire transfers into a checking account it would be accurate to describe that as "cash".
- sbhere 14y ago
  Not necessarily; what is a Paypal payment? "Money Order" implies simply a monetary transfer in some circles, similar to a Western Union/moneygram transaction.
visualcsharp 14y ago
This kind of behavior by the "authorities" is about one thing and one thing only: controlling the flow of dollars overseas. You see, we can't have /real/ free markets--where goods and services are bought and sold according to the laws of supply and demand. The "authorities" can illegally run guns to drug gangs in Mexico (Fast and Furious) but nope, you're not allowed to write a gambling software platform.
venomsnake 14y ago
Do the machines the software ran also had windows or linux ... and the sites were listed in google. i see a lot of fat amicus briefs flooding the courts.
eriksank 14y ago
When balancing my dislike for furthering the practice of gambling with my dislike for the increasingly excessive use of force by the politicians and their servants, I think I should still side with the software developer. Since the politicians and their servants seem to be trying to intimidate our side, I would be for a solution in which we start intimidating back. Otherwise, our own position will keep eroding until nothing's left.
Hawkee 14y ago
> At the time of the raid, Stuart had about 20 clients, all of them outside the U.S. in Costa Rica, Panama, Australia, Jamaica, the UK, the Dominican Republic and elsewhere. Now he’s down to 10 clients. Maybe this was the goal all along. Simply targeting this individual is enough to permanently damage his business. It might even cause others to have second thoughts about developing gambling software. Even if this doesn't end in a conviction the landscape of online gambling software will be altered.
- deleted 14y ago
  [deleted]
- deleted 14y ago
  [deleted]
vaadu 14y ago
Is the DA going after Cisco, Dell, Microsoft and NY ISPs? The software runs on or through those systems. They are part of the conspiracy.
eriksank 14y ago
Even though I am not particularly interested in interfering with how the politicians and their servants are taking the general populace for a ride -- since they may have indeed asked for it -- the politicians and their servants should know their limits and they should know when to stop. If we do not show the courage and the good sense to retaliate, they will simply extend their intolerable excesses over our profession too.
frere 14y ago
This guy made the critical mistake of treating his customers with respect. I would have turned state's witness, installed the backdoor, and kept cashing the checks. Don Aronow would approve.
- techtalsky 14y ago
  And STILL be prosecuted for 2nd and 4th degree money laundering, and STILL need to extract dirt on all your clients (which your other clients would possibly find out and help you accidentally die in a plane crash).
Bud 14y ago
The degree of militarization of, and breathtaking overreach by law enforcement depicted here is stunning. 30 camouflaged SWAT officers? To arrest a coder because someone else was using his software illegally? Really? The case began in February 2011, when Stuart says he and his wife got the Kim Dotcom treatment after about 30 local Arizona law enforcement agents wearing SWAT gear and camouflage dress — some of them with bushes attached to their shoulders to blend into the woods around his house — descended on his home and threatened to send him and his wife to prison for 35 years if he didn’t cooperate. The search warrant used in the raid said Stuart and his wife were engaged in money laundering, operating an illegal enterprise and engaging in the promotion of gambling. Stuart has tried to obtain a copy of the affidavit used to get the search warrant, but it’s currently sealed. The conversation for the plea agreement occurred the day after the raid, when Stuart says he was still traumatized by the experience and had only rent-a-lawyers, hired quickly over the internet, to represent him. The lawyers urged him to cooperate and agree to the terms. And then once they arrested him, this: Stuart showed Wired a plea agreement (.pdf) signed by former Manhattan Assistant District Attorney James Meadows, which stated that he would plead guilty to second- and fourth-degree money laundering charges and assist the DA’s investigations by, among other things, “aiding in the design of software used to obtain records, usernames, passwords, and other information stored on websites using” his company’s software. Stuart says authorities specifically told him that they would not use the backdoor themselves but that he would be expected to access the servers of online casinos and others who used his software overseas in order to retrieve the information of gamblers and bookmakers on their behalf. “They made it clear that they would do nothing. I was expected to do everything, to modify the system to allow myself to get in to get the information they wanted,” he says. “Their whole intention was for me to retrieve information from those databases that were located in foreign countries…. They were going to use me to get to the clients…. But I’m not a hacker, I’m a software developer.” So in other words, these guys are too lazy to do any of the hard things associated with their job: not investigating, not establishing proof, not getting a valid search warrant that passes the laugh test. So they've decided to find ways around doing their job, and get the accused to do their job for them, via SWAT teams and threats.
- rhizome 14y ago
  The conversation for the plea agreement occurred the day after the raid, when Stuart says he was still traumatized by the experience and had only rent-a-lawyers, hired quickly over the internet, to represent him. The lawyers urged him to cooperate and agree to the terms. As an aside, this is why you first hire lawyers only to get you out of jail, after which you hire your real lawyers.
revelation 14y ago
The irony of this is that unless you have solved the halting problem, how do you want to prove that a given piece of software does not do something illegal like facilitate gambling? They are called "general purpose computers" for a reason.
maeon3 14y ago
if gambling were legal, then corporations would be fairer than the government run lotteries on every street corner's store. it's not about legal or illegal gambling. it's about protecting their income streams.
inetsee 14y ago
It seems to me that this Assistant DA was trying to coerce this guy into breaking international law. I would think that some of these foreign countries have laws about hacking (installing back doors, secretly extracting user information, etc.). It could be argued that this Assistant DA could be charged with an attempted conspiracy to violate said international laws. I can imagine a scenario where he goes on vacation outside the US and discovers that there's an international warrant for his arrest.
- sleazebreeze 14y ago
  No way would any country on that list dare cross the US. An international warrant for a US government employee? That shit would get canned faster than you can say State Department.
  - hef19898 14y ago
    Italy did it back the day with some CIA guys. Never want came out of it, so.
unabridged 14y ago
Your identity is becoming more of a liability than an asset. In the next iteration, guys like this and Kim Dotcom will only be known by pseudonymous online handles and accept payment in bitcoin.
- gknoy 14y ago
  What's the point of an anonymous receiving identity if there's a trail of where the bitcoins came from is visible as soon as you go to use it to pay for house/car/rent/colocation? I must be missing something about Bitcoin's usability for nefarious purposes.
  - jrogers65 14y ago
    You exchange your bitcoins for traditional currency using an exchange then pay by cash. You can even buy bitcoins with cash - http://bitcoin.stackexchange.com/questions/4616/how-can-one-be-truly-anonymous-without-mining http://bitcoin.stackexchange.com/questions/4616/how-can-one-... Meaning that no transaction ever touches anything related to your identity.
    - krichman 14y ago
      The solution appears to be sending cash in the mail. That's a bit less than ideal.
      - jrogers65 14y ago
        It's also possible to do it in person, from what I gather. Definitely less than ideal but anonymity is almost guaranteed.
rograndom 14y ago
The NY State government has a huge hang up about gambling. I've had multiple discussions with NY State liquor control and the AG's office about what they consider "Gambling instruments", which you cannot possess in a establishment that serves alcohol. Not Gambling instruments: Darts Chessboard & Chess Pieces (including checker pieces) Bowling Balls (and Bowling in general) Pool cues (and Pool tables & balls) Gambling Instruments (possession of any of these items is a Class A misdemeanor punishable by up to 1 year in jail): Deck of cards Dice That makes the following games illegal: Any card game (Poker, Blackjack, Rummy, Go Fish, Solitare) Yahtzee / Boggle Trivial Pursuit (just having the cards are OK for some reason) Candy Land (!!!) Just to further the point, you can shoot pool, for money, and it's not gambling. But if you carry a child's boardgame into a bar, you've violated NY State gambling laws.
- csense 14y ago
  Thanks for the heads up. Sometimes I carry around a deck of cards for entertainment (solitaire or 500 rummy if multiple players are available) -- it's tiny, light and doesn't depend on electronics being available. Knowing I could be arrested for this in NY makes me really not want to visit that state. And their unconstitutional stance on gun control, but I digress.
  - nextstep 14y ago
    Good, stay away.
    - jacquesm 14y ago
      Mean much?
    - jessaustin 14y ago
      Yeah you guys will be totally safe from the twin scourges of guns and playing cards if HN people like this vacation elsewhere.
- rprasad 14y ago
  Gambling is generally waging money on an outcome determined by (a) chance or (b) the actions of others. Chess, bowling, pool, and darts are games of skill; all events in the games proceed directly from the player's actions. Players can play these games for money themselves but generally cross into gambling if they place wagers on games in which they are not participating. Boggle, Yahtzee, and Candyland (among other board games) are largely or entirely based on chance (i.e,. the dice rolls). Similarly, the card games enumerated are also games of chance (because skill is not a meaningful determinant until you reach the upper echelons of players). NY appears to have gone pretty far overboard with their enforcement of the gambling laws, but the actual laws themselves (i.e., the distinction between gambling and non-gambling) is pretty uniform across the states (excepting NJ and NV).
therandomguy 14y ago
In cases like this I have always wondered if you could ask the judge/jury if they would also shut down Dell, Microsoft, Apple etc. as the wares from these companies are also used?
16s 14y ago
TCP packets facilitate online gambling too.
MaysonL 14y ago
There's a really striking contrast between the treatment this guy gets, and the treatment HSBC got for knowingly laundering billions of dollars.

216 points by cyphersanctus 14y ago

JohnLBevan 14y ago

It's nice to know that those who are happy to ignore the law and gamble illegally still pay their licensing fees.

pc86 14y ago
Did you read the article? All of his clients operate in countries where gambling is legal. Most of his clients don't even operate casinos themselves.
JohnLBevan 14y ago
(sarcasm)

hef19898 14y ago

Seriously, if it wasn't illegal gambling where these people gambled I don't see a problem. Let them find proof for the charges. Sad thing is that it actually hurt an otherwise legal business. This and the whole megaupload story show very much the problem of law enforcement and the de-facto borderless nature of the internet.

objclxt 14y ago
> Seriously, if it wasn't illegal gambling where these people gambled I don't see a problem That's not the case. What appears to have happened is the guy's software was sub-licensed or resold to a company that took bets from people living in the US (which is, until the US legalizes online gambling, illegal). However, if you go by the Wired article then the Manhattan DA doesn't actually have any proof that the developer of this software knew this was going on. You can only be an accessory to a crime if you have knowledge of it: selling your gambling software to a company that you knew was running an illegal operation would be a crime. Selling it to a company that subsequently resells it to an illegal operation and doesn't tell you would not. If you go by the Wired article what seems to have happened is the developer in question had no knowledge of this, but received some terrible legal advice advising him to sign the plea bargain.
betterunix 14y ago
"Seriously, if it wasn't illegal gambling where these people gambled I don't see a problem." Here's the problem: New York State runs a gambling enterprise, the lottery. The lottery is a source of revenue for the state, and it is a sneaky way to tax the poor (who are the most likely to buy lottery tickets, despite the poor odds). New York State does not want competition; they already have to put up with reservation casinos, the lotteries of neighboring states, Atlantic City, etc. The last thing they want is another gambling operation that is more exciting and has a higher profit potential.

sheraz 14y ago

This is alarming. Gambling laws in the US are antiquated and intellectually dishonest. It is unfortunate the Wire Act of 1961 was written more to stop organized crime than it was to actually help regulate gambling. The language in this piece of legislation is so broad and poorly defined that states often reach conflicting conclusions. One hopes this guy can afford suitable counsel and get out of this without too much trouble. I sincerely hope a future victory will set a more business-friendly precedent.

wissler 14y ago
Most laws are intellectually dishonest. Creating a legal code that is so big that it's impossible to know what it is and thus, to be able follow it, is intellectually dishonest. Really, the fundamental basis of our legal system is intellectually dishonest.
- eriksank 14y ago
  Look. It is our own fault, since we are not doing anything about it. They will never, ever respect us, unless they seriously fear us.
  - jacquesm 14y ago
    Who are 'they'?
    - eriksank 14y ago
      Who else but the politicians and their servants? We can let them erode our position further and further and further, or we could also finally start putting a stop to that. As all of us know, respect is ultimately based on the fear for reprisals. Where is the respect?
      - betterunix 14y ago
        Politicians are the servants. Not of the general public, of course, but of the new aristocracy that has arisen in this country. Politicians now serve the interests of the ruling class, with the exception of minor parties.

nacker 14y ago

"Under plea agreement discussions that were never finalized by a judge, and that occurred in February 2011 before Stuart was charged with any crime, Stuart says New York authorities pressed him to install a backdoor in his software and distribute it to clients so the data of gamblers and bookmakers could be retrieved." I hope the Bitcoin community is paying attention to this.

codesuela 14y ago
Serious question, whats there to backdoor short of bundling a trojan with the official client? All transactions are out in the open in real time. Edit, went on to Google and found this: http://nerdr.com/shutting-down-bitcoin-really-taking-down-the-bitcoin-network/ http://nerdr.com/shutting-down-bitcoin-really-taking-down-th...

jorgeleo 14y ago

In other news, people are still looking for the inventor of the hammer to charge him with multiple accounts of manslaughter, consequence of every death in which his invention was used. People with sore thumbs are waiting for a verdict before presenting their griefs. Faraday commented: "I am not guilty of the use of electricity in Guantanamo"

suby 14y ago
This is not a fair comparison. A hammer has multiple purposes. In general, it is not an instrument intended to cause harm. Even a gun can be used for a purpose other than causing harm to others -- it can be argued that it serves as a deterrent to violence. What other purpose could gambling software be used for? It's irrelevant whether it was sold to overseas countries since, given the nature of the internet, New Yorkers would have access to those sites. I'm not saying that I think what is happening is right, I just think your comparison is unfair.
- rorrr 14y ago
  > What other purpose could gambling software be used for? Educational. Recreational (no money involved). Research (like to collect gambling data). To learn how to code and/or how games/strategies work.
  - eriksank 14y ago
    Well, it may not even matter. As you can see they are very heavy-handed. That means they do not fear any reprisals for this. That is obviously where the problem is. Ultimately, respect is always based on the fear for reprisals.
- jonknee 14y ago
  > What other purpose could gambling software be used for? It's irrelevant whether it was sold to overseas countries since, given the nature of the internet, New Yorkers would have access to those sites. That's absolutely relevant. There are US companies that make slot machines. Most places in the country their products are illegal, just like the activities that this gambling software allows for. If an underground casino gets busted and is found to have slot machines, it's not the maker of the slot machines that is in trouble (unless there is evidence they were sold illegally).

n3rdy 14y ago

Do those casino's sell their gamblers coca-cola? Better go after them, or maybe even pepsi! Those drinks are being sold to gamblers and these soft drink companies are benefiting directly from gambling proceeds!

carbocation 14y ago

> He says the New York district attorney’s office tried to strong-arm him into a plea agreement that would have had him hacking into the systems of his software clients in order to obtain the usernames and passwords of gamblers and their bookmakers to help authorities gather evidence of illegal gambling. If the premise of Harvey Silverglate's book, "Three Felonies A Day: How the Feds Target the Innocent,"[0] is correct, then this is quite plausible. A key message from Silverglate's book is that because it is impossible to know if one's behavior is lawful[1], it is impossible to be sure that one operates within the contours of the law at all times. Thus, if you would be convenient to nail not because of anything in particular that you've done but because you can probably be convinced to testify against someone higher up in their chain, beware. From my recollection of this book, this was a tactic more typically used at the federal level, so either the tactic is spreading or my recollection of its state-level use is just dim. EDIT: In response to all of the other comments pointing out other absurd choices the authorities could make (they could prosecute Pepsi since they sell soda to these operations, etc), Silverglate's book provides a nice framework for why this programmer would be targeted and not Pepsi. He's not the fodder, but he does have meaningful access to the fodder (whereas Pepsi surely does not). [0] = http://www.amazon.com/Three-Felonies-Day-Target-Innocent/dp/1594035229 http://www.amazon.com/Three-Felonies-Day-Target-Innocent/dp/... [1] = In contrast, it's often quite possible to know when one's behavior is unlawful.

n3rdy 14y ago
My ears are burning.
- carbocation 14y ago
  For clarification, I agree with your implication that the authorities could make these absurd choices, not that I think your comment was absurd.
  - n3rdy 14y ago
    I understand and agree with the point you were making. Last comment was for funsies.

jcromartie 14y ago

$2.3M in cash and money orders? Isn't that a MASSIVE red flag that you are dealing with unscrupulous people? That's textbook money laundering. It's alarming on the surface, but he HAD to know he was dealing with criminals with that volume of untraceable payments. I certainly don't think he should be facing criminal charges, but I can't imagine he's actually surprised. Also, their website: http://www.extensionsoft.com/index.htm http://www.extensionsoft.com/index.htm Apparently designed in MS Word, minimal information, no product details (why not?), can't keep their own tagline straight (is it "International Software Systems" or "International Sportsbook Systems"?). I hope it's not delving into ad hominem territory, but it's a shady website no doubt.

weego 14y ago
First I would point out that the people he would be working with are businessmen like anyone; they don't twist their mustaches and have maniacal laughs. If he was working with companies in Costa Rica then he was working with companies that are open to US citizens, which he knew because everyone does. That's why the gambling company scene in Costa Rica is so strong, it's like we like it in the US, but at a safe distance. The idea that a supplier can be held accountable for the actions of the company they are supplying to though... well he would have to have been very closely embedded into the company for him to have had dealings with the payment processing for this to stand a real chance.
dsl 14y ago
In the eyes of the law a wire transfer is considered cash, money orders are negotiable instruments. Probably copy and pasted from a court filing somewhere without realizing what it actually meant.
jonknee 14y ago
Maybe we're reading it wrong, but "cash" doesn't have to be hard bills, just in money that he actually received. If they had received wire transfers into a checking account it would be accurate to describe that as "cash".
sbhere 14y ago
Not necessarily; what is a Paypal payment? "Money Order" implies simply a monetary transfer in some circles, similar to a Western Union/moneygram transaction.

visualcsharp 14y ago

This kind of behavior by the "authorities" is about one thing and one thing only: controlling the flow of dollars overseas. You see, we can't have /real/ free markets--where goods and services are bought and sold according to the laws of supply and demand. The "authorities" can illegally run guns to drug gangs in Mexico (Fast and Furious) but nope, you're not allowed to write a gambling software platform.

venomsnake 14y ago

Do the machines the software ran also had windows or linux ... and the sites were listed in google. i see a lot of fat amicus briefs flooding the courts.

eriksank 14y ago

When balancing my dislike for furthering the practice of gambling with my dislike for the increasingly excessive use of force by the politicians and their servants, I think I should still side with the software developer. Since the politicians and their servants seem to be trying to intimidate our side, I would be for a solution in which we start intimidating back. Otherwise, our own position will keep eroding until nothing's left.

Hawkee 14y ago

> At the time of the raid, Stuart had about 20 clients, all of them outside the U.S. in Costa Rica, Panama, Australia, Jamaica, the UK, the Dominican Republic and elsewhere. Now he’s down to 10 clients. Maybe this was the goal all along. Simply targeting this individual is enough to permanently damage his business. It might even cause others to have second thoughts about developing gambling software. Even if this doesn't end in a conviction the landscape of online gambling software will be altered.

deleted 14y ago
[deleted]
deleted 14y ago
[deleted]

vaadu 14y ago

Is the DA going after Cisco, Dell, Microsoft and NY ISPs? The software runs on or through those systems. They are part of the conspiracy.

eriksank 14y ago

Even though I am not particularly interested in interfering with how the politicians and their servants are taking the general populace for a ride -- since they may have indeed asked for it -- the politicians and their servants should know their limits and they should know when to stop. If we do not show the courage and the good sense to retaliate, they will simply extend their intolerable excesses over our profession too.

frere 14y ago

This guy made the critical mistake of treating his customers with respect. I would have turned state's witness, installed the backdoor, and kept cashing the checks. Don Aronow would approve.

techtalsky 14y ago
And STILL be prosecuted for 2nd and 4th degree money laundering, and STILL need to extract dirt on all your clients (which your other clients would possibly find out and help you accidentally die in a plane crash).

Bud 14y ago

The degree of militarization of, and breathtaking overreach by law enforcement depicted here is stunning. 30 camouflaged SWAT officers? To arrest a coder because someone else was using his software illegally? Really? The case began in February 2011, when Stuart says he and his wife got the Kim Dotcom treatment after about 30 local Arizona law enforcement agents wearing SWAT gear and camouflage dress — some of them with bushes attached to their shoulders to blend into the woods around his house — descended on his home and threatened to send him and his wife to prison for 35 years if he didn’t cooperate. The search warrant used in the raid said Stuart and his wife were engaged in money laundering, operating an illegal enterprise and engaging in the promotion of gambling. Stuart has tried to obtain a copy of the affidavit used to get the search warrant, but it’s currently sealed. The conversation for the plea agreement occurred the day after the raid, when Stuart says he was still traumatized by the experience and had only rent-a-lawyers, hired quickly over the internet, to represent him. The lawyers urged him to cooperate and agree to the terms. And then once they arrested him, this: Stuart showed Wired a plea agreement (.pdf) signed by former Manhattan Assistant District Attorney James Meadows, which stated that he would plead guilty to second- and fourth-degree money laundering charges and assist the DA’s investigations by, among other things, “aiding in the design of software used to obtain records, usernames, passwords, and other information stored on websites using” his company’s software. Stuart says authorities specifically told him that they would not use the backdoor themselves but that he would be expected to access the servers of online casinos and others who used his software overseas in order to retrieve the information of gamblers and bookmakers on their behalf. “They made it clear that they would do nothing. I was expected to do everything, to modify the system to allow myself to get in to get the information they wanted,” he says. “Their whole intention was for me to retrieve information from those databases that were located in foreign countries…. They were going to use me to get to the clients…. But I’m not a hacker, I’m a software developer.” So in other words, these guys are too lazy to do any of the hard things associated with their job: not investigating, not establishing proof, not getting a valid search warrant that passes the laugh test. So they've decided to find ways around doing their job, and get the accused to do their job for them, via SWAT teams and threats.

rhizome 14y ago
The conversation for the plea agreement occurred the day after the raid, when Stuart says he was still traumatized by the experience and had only rent-a-lawyers, hired quickly over the internet, to represent him. The lawyers urged him to cooperate and agree to the terms. As an aside, this is why you first hire lawyers only to get you out of jail, after which you hire your real lawyers.

revelation 14y ago

The irony of this is that unless you have solved the halting problem, how do you want to prove that a given piece of software does not do something illegal like facilitate gambling? They are called "general purpose computers" for a reason.

maeon3 14y ago

if gambling were legal, then corporations would be fairer than the government run lotteries on every street corner's store. it's not about legal or illegal gambling. it's about protecting their income streams.

inetsee 14y ago

It seems to me that this Assistant DA was trying to coerce this guy into breaking international law. I would think that some of these foreign countries have laws about hacking (installing back doors, secretly extracting user information, etc.). It could be argued that this Assistant DA could be charged with an attempted conspiracy to violate said international laws. I can imagine a scenario where he goes on vacation outside the US and discovers that there's an international warrant for his arrest.

sleazebreeze 14y ago
No way would any country on that list dare cross the US. An international warrant for a US government employee? That shit would get canned faster than you can say State Department.
- hef19898 14y ago
  Italy did it back the day with some CIA guys. Never want came out of it, so.

unabridged 14y ago

Your identity is becoming more of a liability than an asset. In the next iteration, guys like this and Kim Dotcom will only be known by pseudonymous online handles and accept payment in bitcoin.

gknoy 14y ago
What's the point of an anonymous receiving identity if there's a trail of where the bitcoins came from is visible as soon as you go to use it to pay for house/car/rent/colocation? I must be missing something about Bitcoin's usability for nefarious purposes.
- jrogers65 14y ago
  You exchange your bitcoins for traditional currency using an exchange then pay by cash. You can even buy bitcoins with cash - http://bitcoin.stackexchange.com/questions/4616/how-can-one-be-truly-anonymous-without-mining http://bitcoin.stackexchange.com/questions/4616/how-can-one-... Meaning that no transaction ever touches anything related to your identity.
  - krichman 14y ago
    The solution appears to be sending cash in the mail. That's a bit less than ideal.
    - jrogers65 14y ago
      It's also possible to do it in person, from what I gather. Definitely less than ideal but anonymity is almost guaranteed.

rograndom 14y ago

The NY State government has a huge hang up about gambling. I've had multiple discussions with NY State liquor control and the AG's office about what they consider "Gambling instruments", which you cannot possess in a establishment that serves alcohol. Not Gambling instruments: Darts Chessboard & Chess Pieces (including checker pieces) Bowling Balls (and Bowling in general) Pool cues (and Pool tables & balls) Gambling Instruments (possession of any of these items is a Class A misdemeanor punishable by up to 1 year in jail): Deck of cards Dice That makes the following games illegal: Any card game (Poker, Blackjack, Rummy, Go Fish, Solitare) Yahtzee / Boggle Trivial Pursuit (just having the cards are OK for some reason) Candy Land (!!!) Just to further the point, you can shoot pool, for money, and it's not gambling. But if you carry a child's boardgame into a bar, you've violated NY State gambling laws.

csense 14y ago
Thanks for the heads up. Sometimes I carry around a deck of cards for entertainment (solitaire or 500 rummy if multiple players are available) -- it's tiny, light and doesn't depend on electronics being available. Knowing I could be arrested for this in NY makes me really not want to visit that state. And their unconstitutional stance on gun control, but I digress.
- nextstep 14y ago
  Good, stay away.
  - jacquesm 14y ago
    Mean much?
  - jessaustin 14y ago
    Yeah you guys will be totally safe from the twin scourges of guns and playing cards if HN people like this vacation elsewhere.
rprasad 14y ago
Gambling is generally waging money on an outcome determined by (a) chance or (b) the actions of others. Chess, bowling, pool, and darts are games of skill; all events in the games proceed directly from the player's actions. Players can play these games for money themselves but generally cross into gambling if they place wagers on games in which they are not participating. Boggle, Yahtzee, and Candyland (among other board games) are largely or entirely based on chance (i.e,. the dice rolls). Similarly, the card games enumerated are also games of chance (because skill is not a meaningful determinant until you reach the upper echelons of players). NY appears to have gone pretty far overboard with their enforcement of the gambling laws, but the actual laws themselves (i.e., the distinction between gambling and non-gambling) is pretty uniform across the states (excepting NJ and NV).

therandomguy 14y ago

In cases like this I have always wondered if you could ask the judge/jury if they would also shut down Dell, Microsoft, Apple etc. as the wares from these companies are also used?

16s 14y ago

TCP packets facilitate online gambling too.

MaysonL 14y ago

There's a really striking contrast between the treatment this guy gets, and the treatment HSBC got for knowingly laundering billions of dollars.