Steven provides counsel and guidance to emerging companies, small businesses and tech startups in the e-commerce and defense industries. Clients appreciate Steven’s thorough understanding of the law and his straightforward assessment of their issues and rights under the law. Since many of his clients are small businesses, they also turn to him to manage their general legal matters, such as corporate formation documents, operation agreements and employee contracts. In all of these areas, Steven excels at resolving his clients’ various legal challenges and surpassing their expectations.
As daily fantasy sports has surged in popularity, Steven has applied his knowledge of the online space to companies and niche players in the iGaming market. He provides analysis of current and proposed daily fantasy sports games to ensure compliance with state and federal laws and opinion letters for companies in need of payment processing verification.
Steven has significant experience in the investigative domain of the government. He has a clear understanding of how these proceedings work and how to best represent his clients to obtain the best possible result. His successes include drafting the operating documents for a joint venture that successfully bid on a government contract worth over $10 billion, and prevailing on behalf of a government contractor in a size protest before the U.S. Small Business Administration. He has also enjoyed considerable success for clients in debarment proceedings before the DOD and EPA, achieving decisions of no debarment period for government contractors that were subject to a suspension and debarment proceeding.
Clients in the e-commerce and online advertising sphere turn to Steven for his familiarity with the nuances of their industry. First and foremost, he helps protect clients from legal liability from both consumers and contracting parties. This is achieved through thoughtfully prepared privacy policies, terms and conditions, end user license agreements and online distribution agreements. Beyond immediate industry-related concerns, Steven also provides guidance on legal needs such as product manufacturing agreements, creating LLCs, and writing bylaws.
Steven extends his legal skills in the community by assisting individuals in pro bono matters, including providing legal advice in landlord-tenant disputes and uncontested divorce proceedings. Steven has also served on the boards of a number of community organizations.
Professional + Community
- Bancroft Village Homeowner’s Association, Treasurer
- DC Bar, Member
- KAYTT, Board Member
Successfully Obtaining a Preliminary Injunction at the Court of Federal Claims
Our client, a long-time government contractor, rightly turned to Ifrah Law when it suspected a competitor had violated FAR regulations. Our client submitted a proposal in response to a government RFP to provide seminars and library services to detainees at the U.S. Naval Station Guantanamo Bay. The RFP stated that this would be a “lowest price technically available” (LPTA) contract.
Our client’s proposal was unsuccessful, and they moved to challenge the award. Our critical review of the record revealed that the successful bidder may have utilized unbalanced pricing. We successfully argued that our client’s pricing was balanced and potentially fairer to the government – a difficult argument to make in LPTA solicitations because of the discretion granted to contracting officers. Our challenge was successful and following the court’s order granting a preliminary injunction, the government was forced to take corrective action.
(Torres AES v. United States, 1:13-cv-00898 (Damich, J.))
Successfully Defending a Government Contractor Against a Terminated Employee’s Health Care Claim
Ifrah Law successfully defended a government contractor against claims by a terminated company employee. Our client, a health care professional supplier, faced allegations that it failed to offer the former employee COBRA insurance coverage, as required under the COBRA statute.
Ifrah Law conducted a bench trial in the U.S. District Court for the Eastern District of Virginia in January 2012. The judge sustained minimal claims and awarded the plaintiff a mere $500.
(Middlebrooks v. Godwin Corporation, U.S. District Court, Eastern District of Virginia, No. 1:10CV1306))
Prevailing in a Government Contractor’s Debarment Proceeding
How long should your past haunt you? A client of Ifrah Law faced that question when it was confronted with a potentially crippling debarment from a federal agency.
The government contractor had participated in a conspiracy to bribe a public official for a contract award. However, it was the first to cooperate in the resulting federal investigation, which led to a successful conviction. Fast forward four years, and the Department of Defense moved to debar our client. The DoD had already placed the contractor on the Excluded Parties List System (EPLS) but wanted to go a step further. Debarment would have been devastating for our client’s business, resulting in an almost complete loss of revenue.
Presenting the client’s strong performance record since the bribery incident (we even got the prosecutor from the contract bribery case to write a letter to the court on our client’s behalf), Ifrah Lawyers successfully represented the contractor in the debarment proceeding. We obtained a decision of no debarment period at all.
Protesting Procurement Irregularities to Keep a Client in Competition
A client contractor participated in a procurement competition over a multi-award contract with the Department of the Army that was valued at almost half a billion dollars. After submitting a proposal, our client (along with other bidders) was excluded from the competition because of a deficiency in a proposed labor rate. The other excluded parties protested to the Government Accountability Office, and the Army permitted five of the protesting parties to rejoin the bidding process.
With just a week left before the final proposal revisions were due, our client asked us for help. We filed a U.S. Court of Federal Claims protest asking to reverse the exclusion based on irregularities in the procurement process. We also asked for an injunction to prevent the bidding process from ending.
As a result of our filing and subsequent negotiations with the Department of Justice, our client was permitted to rejoin the bidding and to submit a revised bid.
(Platinum Business Corporation, et al. v. United States, 1:12-cv-00001, Court of Federal Claims, Bid Protest (2012))
Effectively Advocating for a Government Contractor Facing Debarment
Having spent over 30 years in the environmental and renewable energy industry, our client was dismayed when he received a Notice of Suspension and Proposed Debarment (the Notice) from the EPA. Facing the possibility of a three-year debarment, our client knew that such a black mark would mean not only the end of his company, but also the end of his career.
Ifrah Law set to work on contesting the Notice and addressing the mitigating and aggravating factors. While our written response was strong, the bold and clearly reasoned advocacy we provided during the oral argument had the biggest impact on the case. Ifrah argued that this was a one-time oversight during an alleged emergency situation, for which our client was truly remorseful. But we took the additional step of arguing that that our client never should have been prosecuted in the first place, and that he was the victim of an overzealous prosecutor.
After the record closed, we were told that a settlement of two years was feasible, but we refused to settle. When the decision was rendered, our client faced no debarment whatsoever, allowing him to resume his government contracting business immediately. The EPA legal counsel involved in this matter told us that the advocating we did on our client’s behalf was one of the best she has ever seen.
Do you remember when I wrote about how a federal district court had ruled that an online poker account was akin to a bank account and should therefore be subject to FBAR reporting?
It seemed nonsense to me at the time—and I also worried about whether the court’s expanded definition of a “financial institution” would be applied to other types of escrow accounts beyond gaming.
So I’m relieved to hear that the Ninth Circuit just reversed the district court’s ruling and clarified that a bank means a bank; not an online poker site.
In its decision, the Ninth Circuit explained:
Hom’s PokerStars and PartyPoker accounts do not fall within the definition of a “bank, securities, or other financial account.” PartyPoker and PokerStars primarily facilitate online gambling. Hom could carry a balance on his PokerStars account, and indeed he needed a certain balance in order to “sit” down to a poker game. But the funds were used to play poker and there is no evidence that PokerStars served any other financial purpose for Hom.
I hope this provides comfort to online poker players who might have been alarmed by the district court’s half-baked decision. I would also like to see this put to rest any other worries about escrow accounts. The Ninth Circuit concluded that “there is no evidence that PartyPoker and PokerStars were established for any of those purposes, rather than merely for the purpose of facilitating poker playing.” By the same rationale, escrow accounts are there merely to hold escrowed funds and not for any other purpose.
The iGaming world is excited about Assembly Bill 2863—better known as the Gray bill because of lead sponsor Adam Gray—which would legalize and regulate intrastate online poker in California. A few weeks ago, the bill unanimously cleared the Assembly’s Governmental Organization Committee; now it looks set to clear the Appropriations Committee as well.
Those are promising signs—but we’ve seen this before. Last year, a similar bill—also by Adam Gray—cleared the same two committees and caused much enthusiasm, only to “die on inactive file.” California has tried, and failed, to pass an online poker bill for almost a decade: is there any reason to get excited over this bill?
Actually, there is. For one, the Gray bill is the first to resolve the dispute between racetracks and tribal casinos. Previous bills allowed only tribal casinos and card rooms to apply for an online poker license, and the racetracks didn’t think that was fair. They wanted in—but the tribal casinos didn’t think that would be fair, because they worried that letting racetracks run poker games would infringe upon the gaming exclusivity granted to the tribes by the state’s constitution.
The Gray bill compromises; it asks racetracks to rescind their online poker eligibility in exchange for a subsidy of $60 million a year, taken directly from the online poker revenue made by other operators. Despite uncertainty over how soon, if ever, online poker will make that much in a year, the racetracks have shown support for the Gray bill.
But a second controversy remains unresolved. This has usually been called the debate over the “bad-actor clause,” although we’re seeing an increase of references to the issue of “suitability.” Either way, it’s clear enough what it is: some tribes want the bill to contain language that prohibits licensing any online poker operator who offered real-money play in California after the passage of the UIGEA in 2006. Others protest the inclusion of such language and would rather the matter be decided by the California Gambling Control Commission without the need to take cues from a bill.
The Gray bill shows cognizance, but ambivalence, about this issue. Some have gone so far as to say that the bill doesn’t contain suitability language at all; that is not true. Go to Subsection 19990.405 and you’ll find plenty of dead giveaways that make you unsuitable. For example, you cannot have been convicted of a felony. Nor can you be under 21 years of age. And don’t even think about turning in your paperwork late.
But none of them specifically address whether you were taking bets online in California between 2006 and the present day—the most salient segment of time by which “bad actors” are judged. There is, instead, a very vague but critical subparagraph, typed in an electric blue that sets it eerily apart from the rest of the black-and-white bill:
The act that added this subparagraph shall not become operative until criteria are established by statute to address involvement in Internet betting prior to the state’s authorization of Internet poker pursuant to this chapter.
That’s a fancy way of saying “this bill goes nowhere until we’ve decided what to do about PokerStars.”
That subparagraph is likely to cause trouble—but it need not nullify everything else the bill says about licensing, most of which you’ll find under Article Four of the 11-article document. (Because almost every section of the bill begins with 19990, I will refer only to the last three digits for brevity.) Section 404 provides directives to the Commission about how to screen prospective applicants. It’s a section that is worth studying more closely because, even if the Gray bill never becomes law, the investigative protocol it recommends could set a precedent with staying power.
The Gray bill directs the Commission to carry out two investigations per applicant—a preliminary “partial” investigation followed by a more penetrating “full” one.
The partial investigation is like a bad-actor receptionist, stationed upfront to turn away the very obvious bad guys. 404 (c) describes it:
A partial investigation shall include fingerprint-based state and federal criminal history checks and clearances, and inquiries into various public databases regarding credit history and any civil litigation. … A full investigation shall be conducted of only those service providers that pass the partial investigation …
The full investigation is instead so scrupulous, one could almost hope not to get to it. As described in 404 (d):
Before the commission issues a service provider license to an applicant, the department shall conduct the full investigation required by this section of all of the following persons:
(1) All officers of the license applicant.
(2) The owner or owners of either of the following:
(A) The license applicant.
(B) Any corporate affiliate of the license applicant.
(3) Any persons otherwise providing goods to, or performing services for, the license applicant related to core functions.
(4) Any person deemed by the department to have significant influence over the license applicant or its service providers or their respective operations.
And mind the next subsection about what a “report” entails. We will return it later:
… A full investigation shall include … the required submission of a report prepared on each service provider by an outside firm contracted and supervised by the department … The report shall include information necessary for the department to make a determination of suitability, consisting of, but not limited to, personal history, prior activities and associations, credit history, civil litigation, past and present financial affairs and standing, and business activities, including whether the applicant or an affiliate of the applicant has a financial interest in any business or organization that is or was engaged in any form of gaming or transactions related to gaming prohibited by the law of the federal or state jurisdiction in which those activities took place.
Curiously, nothing so far indicates whether anything uncovered from the investigative process would bar an applicant from a license; there are only mandates that this or that information be solicited. So, an applicant who’s had some troubling things come up during the investigation or inside the report could still be recommended for a license. For a list of clearly disqualifying offenses, you need to go to the aforementioned Section 405—which is exactly where the proponents of a bad-actor clause hope to stick one.
But is that really the only way you could keep out people you don’t like, if those people are online poker operators who took bets in California after UIGEA?
Go back to the part about the report that says it has to include information about “whether the applicant has an interest in any business that was engaged in any form of gaming prohibited by the law of the jurisdiction in which those activities took place.” (Abridged.)
Could that do the work of a bad-actor clause? It’s not quite the definitive red card that some tribes have in mind, but could it stick some operators into a litigious licensing process like the one that PokerStars had to endure in New Jersey for years before being licensed?
We would hate to see that happen. The Gray bill and all of its investigative measures seem fit to do quick work of clearly bad people. What would be the use of dragging an applicant through a licensing battle of the wills? The Commission would look inefficient. The industry would look obtuse. Californians would be annoyed; they have waited almost ten years to play the kind of online poker promised to them bill after bill, and if this controversy continues to rage, they might have to wait another ten.
In light of Tax Day (note that it’s on the 18th of April this year due to a holiday on the 15th) we want to point out a curious ramification from a federal case concerning online gambling, tax reports, and foreign accounts.
In United States v. Hom , the defendant, John C. Hom, was an online poker player who had money in player accounts situated outside America. Accounts such as these are used for depositing funds, wagering them on the site, and withdrawing whatever remains; they are not generally treated as “bank accounts” proper, and Hom did not bother to file a tax return on them. Surprisingly, the court said he should have.
As explained by the court in its decision, an individual is mandated to file an FBAR (a Report of Foreign Bank and Financial Accounts) for a reporting year if all of these requirements are satisfied:
(1) he or she is a United States person;
(2) he or she has a financial interest in, or signature or other authority over, a bank, securities, or other financial account;
(3) the bank, securities, or other financial account is in a foreign country; and
(4) the aggregate amount in the accounts exceeds $10,000 in U.S. currency at any time during the year.
Id. at 1178.
In Hom’s case, three of the requirements were clearly satisfied: the defendant was a U.S. citizen (1), the accounts, like the gaming companies holding them, were located in a foreign country (3), and the aggregate amount in those accounts exceeded $10,000 (4).
Requirement (2) was the sticking point. Could an online poker account really clear the definition of “other financial account,” thus compelling Hom to file an FBAR? His team argued that it didn’t: the funds weren’t held in a bank or securities account and the defendant’s actions were limited to making deposits and withdrawals. Strikingly, the court ruled that it was a financial account because “he opened up all three accounts in his name, controlled access to the accounts, deposited money into the accounts, withdrew or transferred money from the accounts to other entities at will, and could carry a balance on the accounts.” Id. at 1179. The ability to deposit and withdraw at will sufficed to make the gaming companies “function as institutions engaged in the business of banking. Accordingly, defendant’s accounts are reportable even under the current regulations.” Id.
This is a very broad expansion of what passes for a financial institution, and it begs the question of how far it can go. For example, are funds in an attorney escrow account, or other escrowed accounts for a foreign transaction, FBAR reportable? After all, they, too, permit the client to make withdrawals and deposits and carry a balance—and possibly even control access.
Hom is only one case; other courts aren’t bound by it. However, they could still be influenced by this decision. It is therefore prudent to file an FBAR on gambling accounts located overseas that exceed $10,000. Furthermore, one should wonder whether other courts will borrow this reasoning and apply it to other forms of escrow accounts. These questions are very pertinent in light of the IRS’s continuing emphasis on the disclosure of foreign accounts.
 United States v. Hom, 45 F. Supp. 3d 1175 (N.D. Cal. 2014)
The post Online Poker: A New Way to Bank? appeared first on Crime In The Suites.
In 2015, Amazon filed suit against over 1,000 unnamed individuals for allegedly offering to sell fake online reviews (positive or negative) on Fiverr.com (“Fiverr”). The unnamed defendants offer to provide 5-star reviews and some defendants even encourage sellers to provide their own text to use in the review. In order to avoid detection, defendants offer to submit reviews from multiple IP addresses, utilize multiple Amazon accounts, and to complete a Verified Review (which means the reviewed has purchased the product, even though they don’t always require the actual product to be shipped for review). In short, the allegations are that these reviews for sale violate Amazon’s Customer Review Guidelines (which prohibit paid reviews), Fiverr’s own Terms of Service (which requires compliance with third party guidelines), and deceptively provides false reviews to consumers (which violates consumer protection laws).
Interestingly, Amazon did not name Fiverr as a party to the complaint. Instead, Amazon went after the individual sellers and indeed explicitly stated in the complaint that “Amazon will amend this complaint to allege their true names and capacities when ascertained.”
In contrast to Amazon’s approach, the Metallica Plaintiffs in a previously filed case against Napster, sued Napster directly and not the individual users (and eventually obtained their desired result). Indeed, Amazon has not always omitted operators from its case captions. Last April, Amazon filed a similar lawsuit against a number of companies that operated websites to promote the sale of Amazon reviews. That lawsuit contained very similar allegations to this recent suit against individuals and alleged selling positive reviews, offering a Verified Review, a slow posting of reviews to avoid detection by Amazon, etc. Similar as well to the Napster case, the first Amazon lawsuit also yielded a successful result because the websites targeted in that case were all closed down.
So why is Amazon now going after the individual sellers? And why did Amazon omit Fiverr in this lawsuit?
One possible explanation is that Amazon, like Napster, first attempted to take down the providers (i.e. the website owners) that enabled the fraudulent review process. While that was successful, Amazon likely realized that it was insufficient because the individual reviewers would easily migrate to sites like Fiverr to continue their activities. So, Amazon was forced to file suit against the individual users.
At the same time, Amazon did not include Fiverr as a named defendant because it is more likely to get Fiverr’s cooperation in providing the identities of the unnamed defendants, and, because Fiverr is a legitimate global online marketplace offering tasks and services- in sharp contrast to the defendants in the prior Amazon lawsuit that operated sites and companies for the sole purpose of providing fraudulent Amazon reviews (and further antagonized Amazon by utilizing the Amazon logo on their sites). Additionally, as noted in the current Amazon complaint, Fiverr itself prohibits paid reviews and has tried to prevent them- again in sharp contrast to the companies in the first Amazon lawsuit, whose entire business was selling Amazon reviews.
Or it may be that Amazon has embarked on a process to stop paid reviews and these are the first steps in that ongoing process. As noted in this complaint against the Fiverr sellers, the lawsuit is “the next step in a long-term effort to ensure these providers of fraudulent reviews do not offer their illicit services through other channels.” Thus, Amazon may have simply first pursued the enablers (i.e. the company websites dedicated to fraudulent reviews) and then it pursued the individual reviewers on Fiverr.
The extent to which Amazon will continue to pursue questionable reviews remains to be seen. In 2015, Amazon limited its lawsuits regarding fraudulent reviewers to paid reviewers. In 2016, we may see an assault on the groups of independent people who exchange positive reviews on Amazon (i.e. each party agrees to submit a positive review of the other’s product). This type of arrangement also violates Amazon terms and poses similar concerns to the reliance of consumers on Amazon reviews. Amazon may also question whether this prohibited practice merits attention.
When it comes to a conviction, or even an arrest, the collateral consequences that are sometimes overlooked by client and counsel can be extremely damaging, especially when dealing with government agencies and programs.
One such set of consequences is unique to contractors who do business with federal or state governments. Because even a plea to a criminal conviction represents a person’s affirmative statement of the underlying facts, that can lead to a proceeding to suspend or debar (that is, prohibit) the contractor from federal or state business. A government agency may issue a notice of suspension or debarment based on the criminal conviction alone, if the statute provides for such a basis of debarment. Moreover, in some circumstances, a government agency may issue a notice of suspension or debarment based on the underlying conduct (which the plea or conviction affirms as true) that poses a risk to the integrity of government contractors. Thus, even if a government contractor facing serious charges and a lengthy trial enters a plea to a less serious charge, that plea may cause the debarment of the government contractor and possibly deal a fatal blow to its business based on the conduct on which it was based.
Another example of an unforeseen consequence is when a person applies for one of the various government programs that are a “privilege” and not a right. The U.S. Customs and Border Protection (CBP) has implemented Trusted Traveler Programs, such as the Global Entry program, which allows expedited clearance for pre-approved, low-risk travelers upon arrival in the United States. There is no right to participate in that program; rather, it is a privilege granted to individuals upon acceptance by the CBP. There is an application process for entry into the program, and, the CBP explicitly warns that applicants may not qualify if they have been convicted of any criminal offense or have pending criminal charges or outstanding warrants. Notably, as with similar statutes or prohibitions, there is no end date for when the CBP will stop considering the criminal conviction. Therefore, the criminal conviction will likely act as a lifetime bar to gaining acceptance into this program and into similar types of programs.
Collateral consequences are increasingly becoming an important area of law due to the fact that the total number of collateral consequences has increased tremendously in recent years. This requires a broad understanding of many areas, which is contrary to the trend in law practice of specialization in niche practice areas. Unfortunately, counsel are often completely unaware of the potential collateral consequences in practice areas outside their scope of practice. With funding provided by a DOJ grant and other sources, the ABA has developed an interactive tool called the National Inventory of the Collateral Consequences of Conviction (available at www.abacollateralconsequences.org), which provides a database of the sanctions and restrictions in each state. This is a useful tool for both counsel and client in understanding the full gamut of collateral consequences resulting from a criminal conviction.
The post The Hidden Regulatory and Licensing Consequences to a Conviction or Arrest appeared first on Crime In The Suites.