Chris Moneymaker-inspired Class Action Lawsuit Filed against PayPal

08:42
15 Jan

Image courtesy of WSOP.com

Chris Moneymaker’s battle with PayPal has made it to federal court, a class-action lawsuit finally filed against the payment provider for what is claimed to be unlawful account seizures.

The lawyer acting on behalf of those who had money taken, Eric Bensamochan, has described PayPal’s transactions and practices as “illegal, highly questionable and akin to outright theft.”

Although 2003 WSOP Main Event champion, Chris Moneymaker, is no longer involved directly as a litigant, the class action was launched after Moneymaker had his account frozen, and then $12,000 “stolen” from it...

So @PayPal@AskPayPal froze my account last year and said i could access my money in 180 days. Well they straight up stole the money!!!! Money out of my account pic.twitter.com/fnQtkPw7s9

— Chris Moneymaker ⭕ (@CMONEYMAKER) May 18, 2021

With the ACR ambassador’s claims going viral among the poker and gambling world, PayPal finally relented and returned Moneymaker’s funds, but it was “too little, too late” – big Chris having already lawyered up.

well @paypal I messaged you and told you what was coming and you choose to do nothing. I got no response sooo..... https://t.co/a0YdbPjpnY

— Chris Moneymaker ⭕ (@CMONEYMAKER) June 16, 2021

“I guess @paypal chickened out and gave me my money back when they heard about the lawsuit and backlash,” Moneymaker tweeted. “Unfortunately, for @paypal I have been contact by over 50 people that you have done this too. The lawsuit I am filing will continue!!”

On the back of his money being returned, Moneymaker also explained:

“I will not be a plaintiff in the lawsuit anymore but an advisor and facilitator to get people that do not have a big platform their money back. I gave you a shot but Hell is still coming @paypal.”

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That brings us up to this week and the filing of a class-action lawsuit by Moneymaker’s lawyer Eric Bensamochan, with another well-known member of the poker community – Lena Evans – as the lead plaintiff.

Evans is the founder of the Poker League of Nations (PLON) and used her PayPal account for PLON purposes, as well as for running a private poker league and other non-poker activities.

In November 2020, just as happened to Moneymaker, Lena Evans had her account frozen and 180 days later saw the account’s balance of $26,984 confiscated.

Evans’ enquiries to PayPal as to what exactly she had done wrong to deserve the confiscation were met with a wall of silence.

As we reported previously, certain payments require PayPal pre-approval, the company’s ‘acceptable use’ list including “activities involving gambling, gaming and/or any other activity with an entry fee and a prize.”

This includes, but is not limited to “casino games, sports betting, horse or greyhound racing, fantasy sports, lottery tickets, other ventures that facilitate gambling, games of skill (whether or not legally defined as gambling) and sweepstakes, if the operator and customers are located exclusively in jurisdictions where such activities are permitted by law.”

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Mike Matusow also hit by Paypal seizure

Other poker players have also been victims of PayPal’s apparent abuse of the small print, which along with their unwillingness to respond to legitimate complaints and concerns, not to mention media enquiries.

Danielle “dmoongirl’ Andersen had $20k taken from her in a similar raid, while Mike “The Mouth” Matusow has previously tweeted his own story.

My attorney told me if you read fine print they are allowed to steal our money. It’s criminal but we can’t do anything. https://t.co/FUNqPC5dh9

— Mike Matusow (@themouthmatusow) May 18, 2021

Matusow’s legal advice is rather different from that of Moneymaker’s lawyer, Eric Bensamochan, who told Haley Hintze of Poker.org last summer:

“PayPal [was] clearly feeling the heat from the pending litigation. [They] thought that by simply giving Chris Moneymaker his money back, that things would end. They could not be more incorrect. Mr. Moneymaker will continue to consult with the Bensamochan Firm in proceeding with the class action on behalf of the thousands and thousands of people who have had their hard-earned money seized at will and with impunity by PayPal.”

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Paypal add insult to injury with tax hit

Among those “thousands and thousands” are two further named plaintiffs in the class-action suit launched in a US federal court in California this week.

Online yoga clothes seller, Roni Shemtov, has been hit hard twice by PayPal, her account frozen and $10,000 confiscated in 2017, with another $32,351.87 taken in 2019.

Shemtov claims she was given various different reasons by PayPal employees for the confiscations, including having used the same IP address and computer that other PayPal users used.

Shemtov was then informed she had to pay tax on the confiscated funds after PayPal informed the IRS, a similar tale to that of the third named litigant, Chicago businessman, Shbadan Akybekov.

Akybekov could only look on in horror as PayPal took more than $172,000 from the accounts connected to various businesses he runs. As with Moneymaker, an additional sum was taken for “damages caused by Acceptable Use Policy violation”.

As with many similar cases which have come to light since Moneymaker’s initial refusal to accept the “theft” lying down, PayPal have repeatedly refused to explain exactly what offences the plaintiffs have been guilty of to have their money taken in such a way.

As with Shemkov, an IRS 1099K form was filed meaning Akybekov was hit with a tax bill on $162,517.19 of PayPal transaction, despite that money having been confiscated.

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“Outright theft” says lawyer

Mr Bensamochan, acting on behalf of the plaintiffs, claims in the lawsuit:

“PayPal essentially claimed a deduction for an expense that it never paid. PayPal seized $172,206.43, while reporting only $162,517.19 to the IRS. PayPal’s transactions and practices are illegal, highly questionable and akin to outright theft.”

The class action lawsuit, which can be viewed in its entirety here lists the following nine separate claims against PayPal:

The class action as filed by Bensamochan lists nine different claims:

• Conversion
• Civil Rico (Violation of the ‘RICO’ (racketeering) Act.)
• Violation of the Electronic Funds Transfer Act
• Breach of Written Contract
• Breach of Fiduciary Duty
• Violation of California Business and Professions Code (17200)
• Unjust Enrichment
• Declaratory Relief
• Accounting

The lawsuit, which may see additional plaintiffs added, seeks “general, specific and compensatory damages, including restitution, in an amount to be proven at trial.”

The filing also asks the court to award “enhanced (treble) damages, three times the amount of monetary damages proven at the trial of this matter,”... as well as “punitive and exemplary damages as permitted by law.”

PayPal have so far declined to comment.