Further Discussion of All World Trust

[The Philosopher]

It might help to reiterate what the All World trust account procedure is. This is what I’ve gathered from earlier posts, and I’m relying on memory rather than going back and reading the various discussions of it, so if I’ve misunderstood anything I would appreciate being corrected by Pariaction or Rick or whomever. In any case, here’s what I think is being claimed:

All World gives to Deloitte & Touche what purports to be a complete list of customers and their current account balances. (NOT what they posted up originally, but their current account balance.) Customers are identified not by name or any personal information, but only by their account number. The documentation provides the balance for each individual account, plus the aggregate total.

All World gives to Deloitte & Touche access to the web links that are provided to individual customers to enable them to check their audited balances.

Deloitte and Touche compares the documentation they were given with what is available to the customer online. (“OK, in the paperwork they gave us, All World claims customer 55569 currently has $2,492.11 in his account. Now, let’s see, as I click on the link from the allworldtrust web page, and I enter 55569, just as that customer himself could be doing, it says ‘$2,492.11.’ Good. Now, All World is telling us customer 22922 has $10.00 in his account. Let’s see if that matches what they’re telling him he has….”)

Deloitte & Touche stroll on down to the First National Bank of Curacao or wherever All World has told them they’ve set aside the customer account money. “Hello Mr. Banker. I’m Mr. Deloitte and this is my sidekick Touche. We’d like access to the account information for one of your customers, a Mr. All World. As you can see, we have all the necessary signed paperwork authorizing us to see that information.” The banker shows them what they have come to see, and they compare the figure given to them by All World with what the bank says All World has in their account.

If the individual account information to be provided to customers online matches the paperwork All World gave them, and if the amount of money in All World’s bank account is at least equal to the total of all of those accounts, then Deloitte & Touche draws up a document to that effect and provides it to All World to post on the allworldtrust page. They do not state there how much money was in the bank account they checked, but only how much excess there was. (So if the paperwork they were given shows $1,000,000 in customer accounts, and they confirmed that All World has $1,115,005 in the bank, then they write that “As of such-and-such date, All World has $115,005 more than the minimum needed to cover their customer accounts.”)

Repeat once per month.

Now, one might say, what if All World customers in fact have $3,000,000 in their accounts, but All World just lies to Deloitte & Touche by only giving them the account information for $1,000,000 worth of their customers? In that case, big deal that they have the funds to cover $1,000,000, since that’s a phony figure anyway.

I believe that’s where the provision for customers to check their accounts individually comes in. If Deloitte and Touche checks that online information with the figures All World gave them, they better match. And if All World makes them match at $1,000,000 by fudging things, then that means there are $2,000,000 worth of account balances left out. The problem with doing that is that All World has no way of knowing in any given month which of their customers will bother to go to allworldtrust and see if the information about their individual account is accurate. If customer 12357 has an account balance of $5,000, but they conveniently leave that account out entirely or claim it has but $500, what is going to happen in the unlucky event that customer 12357 decides to click on the link and check how much they told Deloitte & Touche was in his account?

As I recall, there is also a claim not only that they have the money and that it has been verified by Deloitte & Touche, but also that there is some separation between All World ownership and All World management preventing ownership from easily pulling the money out of the bank between monthly audits and disappearing into the night. Apparently at the very least the management (Rick and company) would have to be in cahoots with the ownership for that to happen, and maybe there would be other hurdles as well. I’m not sure of the details on that, and I’m not sure if that is part of what Deloitte & Touche attests to, or simply some extra information All World is claiming that we would have to take on trust.

All World has also mentioned that while the auditing procedure really only compels them to have enough funds to cover all account balances once a month, in fact they true them more like once a week. This too, though, is something that does not come with independent verification; it’s just a little extra information they’ve stated.

Before we can intelligently talk about the pros and cons of this system, what it proves and what it doesn’t, how it could be improved, whether it should be adopted by other books, how it compares with procedures at Australian or other books, etc., let’s make sure we know what the system is. Does the above accurately describe what All World claims to have put in place, or have I misunderstood?

[docriver]

one correction : I just looked up my account - and it does have my name on the "Trust Certification"...so it is not completely anonymous with just account numbers.

It looks like they just updated today, as the certification is dated October 23. Unfortunatley, the total bank balance's latest update is September 4.....so its a little bit out of date.

[Machiavelli]

I think a thread like this is very important. A while back, I tried to understand it myself but I was not able to make much headway.

I would like to thank "Pariaction" and rick for taking the time to go through this with us. I hope they can understand that although the hypothetical situations and questions that we are proposing might sound like a cross-examination, we are only acting in good faith to better understand it. (Well, at least I am.)

And let me say, that it is very comforting to know that they have an accounting firm simply verifying that they have X + 100k in a bank account somewhere. That puts them near the front of the class in terms of security right there, I am sure that half of the outs I use cannot even produce that verification.

[Mr White]

Philo,

I have been in contact with Pariaction via e-mail and he has been very forthcoming about the system. I am going back to him with a couple of questions, but I think that you have pretty much identified part of the process. There is another aspect to the certification that deals with database verification.

They have database experts certify their database to insure no separate books are kept. I am not sure if the certified database is then given to the accounting firm or if it is for other use I am writing back to get clarification on this issue. I will update the thread when I find out.


I also talk to Canbet and here is a summary that they provided with their process.


As part of our licensing arrangements, Canbet is required to establish segregated bank accounts specifically for the purpose of holding customers funds. At all times, the funds in these segregated accounts must at least equal or exceed the sum of our customers betting accounts. For example, if the sum of all customers betting accounts is $8.5m (this figure also includes any outstanding bets), then we are required to hold at least $8.5m in the segregated accounts. All funds in these accounts are treated in accordance with the provisions of the Trustee Act 1957. Rather than trying to monitor and balance this on a daily basis, we keep an amount well in excess of what is required in and perform a weekly reconciliation in conjunction with other aspects of our financial operations.

Canbet is required to submit monthly reports to the Australian Capital Territory Government (bank statements, customer account balances etc.) to demonstrate our compliance with this regulation. In addition, the regulatory body (ACT Gambling and Racing Commission) can also conduct random checks to ensure our continued compliance.

Also, Canbet is also required to lodge a security guarantee bond which is controlled by the ACT Gambling and Racing Commission. This money is held in the event that we are unable to pay customers winnings. The amount of this bond is set by the ACT Gambling and Racing Commission, who can vary the amount required.

Failure to comply with these regulations would result in the ACT Gambling and Racing Commission taking action against us. This could be any number of measures, ranging from issuing a notice to comply, fines, suspension or cancellation of our licence, depending on the seriousness of the offence.

I hope this has been of some assistance - please contact me if you require any further information.

I would also like to thank Pariaction and Canbet for the help they have provided me over the last couple days.

[Mr White]

I have more detailed information about All World's post up trust system. I do not have time to post it right now, but I will try and provide it for you later today.

[Pariaction]

DocRiver,
The information that the accountants can access is only usernames and not the actual names of people. That is why the second part of our system is so impoortant, having the database certified and letting individuals check to see the amount in their accounts at the time of the audit is the same as the amount that the certificate states. This ensures that the company is not using two separate sets of books or leaving off a few large balances. This is the largest problem that I can see with the Australian system is that they are sending a report and the end-user (bettor) has no way to see if his balance is included.

It took me a long time of pondering to come up with this idea and I think that it is a very important part to have a way for individuals to check that their money is included in the trust account (s). The only bettor thing would be individual accounts held by a bank. The problem is that if you got a bank to go along, the book would probable own the bank and it would end up not much different and you would have to rely on a small offshore bank and where do THEY have your money,,, etc.

I plan to write up a complete description of the process when I have a few spare moments... I sent a description toi Mr White as a start...

[PATTON]

I just want everyone to know I asked around a bit, using my contacts in the industry, concerning the use of a "Final Four" accounting firm in Curacao, as All World is doing to oversee its player trust account.

There appears to be no government regulation or auditing standards in the Netherlands Antilles. Thus, you have to deal with a reputable firm.

All of the Final Four accounting firms conduct internal oversight of their member firms in the region, including the Netherlands Antilles, in order to preserve each firm's international standards of practice. Given the lack of government oversight and other rules, this is a very important factor.

Most of the staff at the Final Four firms are Dutch ex-pats rotating through, which is good, meaning they are well-trained and reliable.

In sum, since the international D&T firm is reputable, and it performs periodic quality assurance checks of the Netherlands Antilles office, the certifications of D&T Curacao with regard to the Allworld Trust should be reliable.