The Baazov Brothers: Crime Without Punishment

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The rise and fall of the gambling business “kings”. In the 2010s, David Baazov attracted general attention several times: at first as a young successful businessman who became the “king of poker” at the age of 34 and then as a defendant in a number of high-profile scandals.

Canadian dream

The Baazov family moved from Israel to Canada in the early 1980s. The youngest of the brothers, David, showed outstanding mathematical abilities and strong character at an early age. When he turned 16, he announced to his parents that he was leaving the school, and, as a result, his family kicked him out of the house. For several weeks, he slept on benches in parks. However, he soon managed to find support and opened a computer hardware store. After a while, he reconciled with his family.

In 2005, David sold his company and started developing software, mostly related to gaming. Therefore, he founded Amaya Gaming company. In 2010, the company’s revenue exceeded $6 million. During that time, David acquired small firms that were developing game software and auxiliary tools.

In 2012, Baazov makes a major deal — he purchases the manufacturer of slot machines Cadillac Jack for $117 million. A year later, David goes to the next level and buys the Rational Group brand, which owned the legendary PokerStars and FullTitl. The deal amounted to $4.9 billion. To pay the sum, Baazov contributed $3 billion, while the rest was invested by BlackStone company. At the same time, David proves himself as an outstanding businessman and skillful negotiator.

The backside of success

After this merger, David’s name became widely known in the gambling world. An extremely bold and successful deal resulted in fame… and the attention of state regulators. Several structures (Britain’s Financial Conduct Authority, Ontario Securities Commission, Investment Industry Regulatory Organization of Canada, Wall Street’s self-regulator, Financial Industry Regulatory Authority) started to wonder how a much smaller company managed to buy such a giant as Rational Group? They began an investigation, and it turned out that the story is not quite smooth, and the actions of the “mathematical genius” were far from legitimate.

In 2016, a leak of documents from the law firm of Mossack Fonseca caused the Panama Papers scandal. Thanks to the information received from the documents, the Financial Markets Commission (AMF) accused David Baazov of trading using insider information. The offices of the company were searched, and as a result, the shares fell by 20%. David was charged with five counts. He firmly denied all charges and said that he would prove his innocence. However, he did not manage to do it, and at the beginning of 2016 he “went on vacation”, and six months later he was fired from the post of director at Amaya. The company was rebranded to Star Group.

Having a brother up the sleeve

Another defendant in the criminal cases is David’s brother Josh (also known as Ofer Baazov). According to the investigation, David passed inside information about the Amaya company to his brother, and Josh leaked the information to his partner Levett. The latter provided it to interested parties. This allowed the partners to earn about $1.5 million.

Ofer and Levett had already had a sketchy past in the gambling industry: they were associated with the gambling site BetonUSA, which went bankrupt ten years earlier and let “disappear” at least $1 million in bad customer deposits. Also, according to various AMF reports, Baazov and Levett were associated with the Oddsmaker.com operation.

In 2017, there appeared interesting information about Amaya’s management. It turned out that the real power was not in the hands of the talented David, but his brother Josh-Ofer. He and his partner Craig Levett owned 75% of the company since at least 2007. The elder brother avoided publicity due to the charges of drug possession (for which he was arrested for 90 days in 1995) and of scamming with a prize drawing in a TV shop. For the last case, the court sentenced Ofer to pay the victims $777,000 in compensation. At that time, Ofer began calling himself Josh. All these facts did not fit well with the image of a solid company, that is why the “golden boy” David was always in sight. Between themselves, the brothers agreed that no important decision would be made without Josh.

Like dominoes

As often happens in such cases, one criminal case raises the other one. Baazov was accused of bribing the governor of New York in 2014 with an illegal donation of $25,000 for the election campaign of Andrew Cuomo. The motive for such generosity could be a bill to legalize online casinos in the state.

The brothers were also noted in Africa. In 2017, the non-profit organization Lion’s Heart Self Help accused David Baazov of fraudulent donations. In 2010, Amaya subsidiaries organized the M-Lotto and Kwachu 6/48 lotteries in Kenya. It was announced that 25% of the proceeds will go to charity. However, representatives of Lion’s Heart Self Help never saw that money. The money accumulated in the deposit accounts of the Kenyan NIC Bank and later were withdrawn abroad.

Later, Baazov was also charged with civil suits. In 2017, another interesting story with the participation of Baazov came up. Kalani Lala, president of the investment company KBC Aldini Capital, filed a lawsuit against him. According to the plaintiff, David illegally used his name and signature to look more presentable and to facilitate the takeover of the company. It turned out after the U.S. Securities and Exchange Commission questioned Baazov’s financial reliability and launched an investigation, during which it interviewed all the specified shareholders. Kalani Lala stated that misuse of his name caused serious damage to his reputation since he deals mainly with Muslims who disapprove of the gambling business and the people who do it.

In 2018, Florida-based Gideon van Kessel filed a lawsuit against the Star Group, accusing them of not being paid for the work he did. According to him, he worked as a consultant and strategic advisor for four years. He was hired by ex-director David Baazov to search, prepare, and acquire promising companies related to online games. After the Quebec securities regulator became interested in the activities of Amaya Inc in 2014, Kassel and some other employees stopped paying their salaries. Star Group representatives refused to comment on Kassel’s claim.

A gift of fate. Or Themis.

In 2018, David appeared before a Canadian court. The proceedings went on for about two years, Baazov managed to evade responsibility in a somewhat paradoxical way: the prosecutors accidentally sent 320,000 confidential documents to David’s lawyers and then asked him to give them back. The incident, to put it mildly, is not typical of Canadian legal proceedings. The lawyers accused the AMF of not presenting their evidence in the proper form, which complicates the defense of the accused. The judge sided with Baazov, and the case was closed due to procedural errors.

And yet the company and former executives had to pay about $30 million in compensation to investors affected by the disclosure of classified information after they filed a class-action lawsuit.

As you can see, happiness in the gambling business is quite fickle. However, the brothers continue to do their highly precarious activities. In any case, they do not leave the gaming business. Now, they are, for instance, taking part in constructing a casino on the reservation territory in Quebec. Time will tell whether this process will turn into new scandals.

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