Almost a year after being indicted on multiple charges of wire fraud, Poker Pro Ali Frazeli has been sentenced to 18 months in prison for a Super Bowl ticket Ponzi scheme he ran in 2017.
Sentencing took place this past week in Santa Ana, California. US District Court Judge David O’ Carter was the presiding judge who six months ago accepted a plea agreement between Frazeli and US prosecutors. Under the terms of the agreement, Frazeli pleaded guilty to a single count of wire fraud in exchange for the 18-month sentence, an additional 6 months of house arrest, plus he will be required to pay his victims back $7.5 in restitution.
According to reports, Frazeli concocted this scheme back in 2015. The objective of the plan was to help him raise proceeds to be used as his bankroll for high-stakes poker play at major poker events throughout the world. The plan involved FIFA World Cup tickets and Super Bowl tickets for the 2017 game between the New England Patriots and the Atlanta Falcons in NRP Stadium in Houston, Texas. The plan went down as follows.
In 2015, Frazeli was playing in high-stakes poker games, which gave him access to some of the top poker players in the world. He seized on the opportunity by approaching Erik Seidel, John Juanda and Zachary Clark, all recognizable names on the pro poker tour, and asking them to make substantial amounts upfront for the purchase of the tickets. Note: Erik Seidel is often considered by poker experts and his peers to be one of the top 20 poker players in the world.
Frazeli told these three gentlemen and other potential investors he had an inside tract to buy 2,800 Super Bowls tickets at near face value. In exchange for their investment in the tickets, Frazeli promised huge profits from the resale of those tickets through a ticket resale business, called Summit Entertainment. The problem is there were no tickets and no expected profits from the resale of those tickets.
By using the investment monies to finance his poker playing, he was holding out hope he could use his poker winnings to eventually pay back investors, making it look as though the ticket reselling business had been a success. When it became apparent something was out of whack, a couple of the investors decided to approach authorities in addition to following a civil lawsuit to reclaim their investment monies. Those court documents indicate Seidel and Clark each invested $500,000 while Juanda took the plunge for $300,000. Additionally, Republican donor Mel Sembler handed him $5, 000,000 to account for the total amount of $6,300,000.
In addition to the lawsuit from his victims, Frazeli was also sued by The ARIA for an outstanding line of credit balance that came in at $1,100,000.
Of the monies taken in the scheme, Frazeli deposited $1,800,000 into his Aria vault where he used the funds to participate on the high-profile Aria high-stakes poker circuit. He also used the funds for other forms of casino gambling. While the amount of profits from his poker play during the two years of holding funds is unclear, he did cash out $2,200,000 in live tournament games of record, including first place prizes from winning three Aria poker circuit events.
At sentencing, Frazeli was allegedly overheard saying he was, “sick to my stomach to make me think how much I’ve violated the law and disgraced my family.”
This was the second black eye for pokers players in the past week. Just one day prior to Frazeli’s sentencing, poker pro Micah Raskin had pled guilty to state drug charges in Maryland. In a sting operation put forth by the Baltimore police department, the 50-year-old was arrested after supplying the Baltimore County drug officers with the drug marijuana. After his arrest, the local police force used a search warrant to check Raskin’s residence where they seized 360 pounds of marijuana, a selection of drug paraphernalia and loaded shotgun. He is currently out under court supervision while he awaits sentencing, which is scheduled to take place at a hearing in June.