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Several independent opinions the poker companies solicited did say poker processing likely would be declared legal if the issue came before a court. But one, from the firm of former U.S. Attorney General John Ashcroft, also cautioned that the Justice Department treated the practice as illegal.
In July 2010, Campos and a poker company attorney were stopped in the airport in New York and questioned by FBI agents. Still, SunFirst continued to process poker payments.
Finally, pressed for an answer, Swallow on July 5, 2010, wrote an email to Johnson on poker processing: "Jeremy, I am not aware of any such law in Utah to prohibit what you are doing. I’ll have one of our assistant attorneys general look into it tomorrow. Let’s talk tomorrow."
Johnson, now under a court order to keep silent, has said that email and a subsequent phone call convinced him that the Utah attorney general’s office had given the processing a green light.
Elie has said in a series of Tweets and messages that Shurtleff and Swallow did provide the "go-ahead" for processing. Elie recently finished serving a short prison sentence after pleading guilty in a New York federal court to charges related to processing of online-poker payments.
Swallow, who took over as attorney general in January, turned down a request for an interview, but his attorney, Rod Snow, said his client did not approve poker-payment processing and suggested the email Johnson was relying on was more like a "gentle letdown" that no support would be forthcoming.
"Clearly that email is not a go-ahead," Snow said. "That’s the answer any lawyer would say: ‘I’m not aware but I’ll have to look.’ "
Shurtleff maintains he never was asked by poker company attorneys about the legality of processing payments, only about the playing of online poker itself.
He said running a poker business was clearly illegal in Utah. As for processing poker payments, he told The Salt Lake Tribune that probably was illegal as well. But that became clear, he added, only with a 2012 amendment to the Utah Code that specifically banned gambling through the Internet.
Time to fold » After four years of federal arrests and seizures of millions of poker dollars, after SunFirst’s own attorney said processing was illegal and after the state’s top bank examiner expressed doubts, neither Shurtleff nor Swallow initiated an investigation. Nor does it appear, based on their statements and on documents from an open-records request, that they referred questions to other Utah or federal officials.
Snow, Swallow’s lawyer, said any investigatory or other actions that might have been appropriate at that time would have had to come from the attorney general or his chief deputy for criminal matters, not from Swallow, who oversaw civil matters.
Shurtleff explained that an investigation was up to either the federal authorities — who in 2011 charged Elie and, in the SunFirst operation, Campos — or the Washington County attorney, who had jurisdiction because a gambling violation is a misdemeanor under state law.
"If feds prosecute bank robbery, states and counties don’t also prosecute the same robbery," Shurtleff said. "If more could have (and I’m not saying more could until the Legislature specifically added Internet gambling to the code) or should have [been done], it would have fallen to the Washington County attorney to make a decision on a class B misdemeanor."
Scott Clark, the former SunFirst attorney, called such a stance "ridiculous."
Clark likened Shurtleff’s argument to a crook counterfeiting on a Utah Indian reservation. Such a crime violates federal law while passing phoney money breaks state law.
"So if you were to follow the Shurtleff line of reasoning," Clark said, "You would say, ‘Well we’re waiting for the feds to go in and shut down the counterfeiters. It’s, after all, an Indian reservation. And we could prosecute because, after all, the bills are showing up in Roosevelt. But we’re not going to. We’re going to let the federal government. We’re going to let them come to their senses and do something about it.’ Well, that would never happen. They would go in and say, ‘Where did this money come from?’ They would call the FBI and close down the operation."
By the time federal regulators acted against SunFirst, the bank had processed more than $200 million in poker payments. In November 2011, state regulators closed SunFirst and sold its assets to Cache Valley Bank.
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