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Jackpot Grand Casino was an online casino which was supported by RealTime Gaming software. Jackpot Grand was part of the NetAd Management group of sites, which included real money online casinos like WinPalace, Casino Titan, and Golden Cherry Casino.
Jackpot Grand Casino was launched in 2012 and was managed by the Affactive Group. Over time, the site would become associated more closely with the name “Affactive Group” than NetAd Management. Both entities were owned by the same men, whose alleged criminal conduct led to the closing of Jackpot Grand Casino. Long before that, the website had been blacklisted by several industry watchdog groups.
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Timeline of Jackpot Grand Casino
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On the respected online gambling watchdog website, Ask Gamblers, Jackpot Grand Casino’s reported history is not that bad. Real players complained about the site 22 times. The average amount of cash disputed was $270, which is thousands of dollars less than many sites. The average response was 2 days (not good) and the average resolution took 2 weeks (again, not good). On the other hand, 16 of 22 complaints were resolved, which is much higher than most rogue sites.
Jackpot Grand’s Complaint Resolution
Where players on other sites lost thousands of dollars, at Jackpot Grand Casino they appeared to be disputing over a few hundred dollars. When the complaints happened, about 75% of them were resolved. In the online gambling business, taking into account for a certain number of disgruntled players and those who give bad reviews to hurt competition, 75% satisfaction is not a bad number. Unfortunately, most of those players never left a full review.
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Yet the other sites in the network had major and pervasive issues, so it is hard to explain the discrepancy. Looking at the bigger picture might give an explanation. Affactive Group has been known to launch websites and have them develop a player community for a couple of years. After building a reputation for trust, they would change their policies abruptly. One day, the switch would turn on and new, bad policies would begin.
In fact, Affactive Group had at least one other site which followed this pattern. Jackpot Grand Casino paid on time and resolved disputes, building a nice reputation in 2012 and 2013, despite the website’s connection to rogue casinos. At the beginning of 2014, the policies changed and almost 100% of all complaints were lodged after the beginning of 2014.
To test that theory, I looked at the Ask Gamblers reviews on Jackpot Grand Casino after the beginning of 2014. Several reviews discussed the software, but said they lost money, so they could not give a report on how fast the website paid. One or two reviews suggested Jackpot Grand was “the worst,” but only gave vague details about why the business was so bad.
2014: A Pivotal Year
Thus, the bulk of Jackpot Grand Casino complaints were resolved, but after a certain date, the site began to exhibit the same problems other Affactive Group and Revenue Jet sites had. This might seem like nitpicking or selecting way too small of a player sample, but further events proved the people behind Jackpot Grand and its sister sites were first-class troublemakers.
Events also showed the owners were wanting to wring more money out of the system in early 2014 — and they were willing to commit major crimes to get that money.
In the summer of 2014, the data security personnel of the J.P. Morgan-Chase bank in New York City detected a breach of their database. This cyber-attack had occurred sometime in the past and had exposed the accounts of 83 million customers. This included 76 million private accounts and 7 million small business accounts.
J.P. Morgan-Chase came from the merger of the J.P. Morgan investment bank and the Chase Corporation, one of the largest banking networks in the United States. Combined, JP Morgan-Chase is the largest private financial institution in the United States. It is one of the three largest corporations in the USA and the 6th-largest corporation in the world. It is hard to imagine a cyber-attack of a private institution being any bigger.
U.S. Authorities Get Involved
Immediately, J.P. Morgan’s executives got in touch with American officials at the highest level. The Securities and Exchange Commission (SEC), the Federal Bureau of Investigation (FBI), and Homeland Security were contacted. The Obama cabinet was briefed on the cyber-attack. Early investigation showed that the hackers launched their attack from servers in Moscow, Russia.
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This was a few months after the Russian Federation’s invasion and annexation of Crimea, formerly a recognized province of Ukraine. For months, separatists in the Eastern Ukraine had been firing on Ukrainian government positions. It was suspected by the US and EU these separatists were backed by the Russian Federation, and might include Russian forces.
In response, the United States and European Union imposed economic sanctions on the Russian Federation. These sanctions were fine-tuned to target the 140 oligarchs who control 40% of the wealth of Russia. Thus, Vladimir Putin’s handpicked allies were being targeted. US cyber-defense experts believed the JP Morgan cyber-attack was a state-backed attack on America’s biggest financial institution, as a response to the sanctions.
It took until the middle of August 2014 for the private and governmental Internet security professionals to repair the breach. After that, a global investigation began into the full scope of the cyber-attack. It was discovered that 10 different major American financial institutions had been attacked. Further scrutiny of the data extraction began to reveal a much different picture, though.
Fairly early in the process, the US data experts began to suspect the Russian Federation was not behind the cyber-attack. Instead, experts noted that the data extracted had more to do with targeting a specific type of business person. They hackers apparently wanted information on people who were likely to invest in penny stocks. Officials came to believe the hackers were private individuals who wanted to execute a pump-and-dump scheme.
In a pump-and-dump scheme, the hackers would buy a bunch of penny stocks. They would use access to these potential investors’ accounts to target people likely to invest, then pretend to be a respected financial institution (like JP Morgan) trying to interest these people in investing. When shares of these stocks were pumped up, the hackers would flood the market with their shares and make a fortune.
Arrest of the Hackers
Though U.S. officials decided Vladimir Putin was not behind the cyber-attack, the hackers had gotten their attention. The United States was committed to finding these people and making an example of them. Eleven months later, that led to the arrest of a man named Anthony Murgio in Florida. On the same day in Israel, it led to the arrest (by Israel’s police) of Gery Shalon and Ziv Orenstein.
Officials began to sift through the alleged hackers’ emails. It revealed that Gery Shalon and Joshua Aaron, a 20-something American, were the masterminds. Joshua Aaron appeared to have the technical expertise to breach the security of J.P. Morgan’s database, which happened to be in the middle of a major personnel changeover. Gary Shalon, who was generating about $75 million a month in revenues through his online business, would supply the cash for the pump-and-dump scheme.
The emails revealed several other things. Gery Shalon was recruiting friends in Israel by assuring them they were beyond the long arm of the American law. He promised that in Israel, they would never be extradited, even if officials learned of their involvement.
An Act of Hubris
That proved to be a huge miscalculation. The hackers, unaware of the official reaction the database attack would cause, believed American officials would not be able to investigate the Moscow site where the cyber-attack was launched. They did not believe the authorities would gain extradition, even if they learned the hackers were from Israel. They were wrong.
Russian officials, realizing these people committed a major international crime in Moscow and wanting to avoid unnecessary troubles, aided with the investigation. Israeli officials, understanding their citizens had created a first-rate scare for the Americans, were happy to extradite.
Closing of the Jackpot Grand Casino
Gery Shalon and Ziv Orenstein were arrested in Israel. Four and a half months later, they had been extradited to the United States and were facing charges in a federal court in New York City. Preet Bharara, the US Attorney who prepared the Black Friday indictments, had a press conference to detail the crimes.
It turned out the online business which Shalon and Orenstein ran was Affactive Media (NetAd Management) and Revenue Jet (Milore Ltd.), which linked a group of online casinos including Jackpot Grand Casino. They were generating between $75 million and $78 million a month in revenues, through running scam operations. Their websites, which claimed to be licensed in Curacao, weren’t licensed by anyone. They were rogue online casinos.
Thus, Jackpot Grand Casino ended the same way all of the Affactive Media casinos ended. It was closed and its domain was seized by the U.S. Justice Department. Ziv Orenstein, Gery Shalon, and Anthony Murgio still await trial on 30 felony charges apiece. Each charge carries with it a sentence of 5 to 20 years, if convicted. Joshua Aaron remains at large and is thought to be living in Eastern Europe at the moment.
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