New Jersey: No proof Pala Interactive CEO involved in or knew of cheating at former employer

New Jersey's chief gambling regulator says a preliminary investigation has found no proof that the CEO of a tribal Internet gambling company was involved in or knew of an online cheating scandal at a previous job.

David Rebuck, director of the state Division of Gaming Enforcement, said Jim Ryan, chief executive of Pala Interactive, was CEO of a company whose software was used to cheat online card players in 2006. Pala started offering Internet gambling in New Jersey this week, the first Indian tribe to do so.

In a letter posted on the division's website Thursday afternoon, Rebuck said an investigation of the UltimateBet scandal determined that it occurred while Ryan was head of Excapsa Software. That firm's software was used to cheat players by revealing their hidden cards to other users, resulting in losses of nearly $20 million to players. The money was ultimately refunded. But the software was actually developed by a different company that pre-dated Ryan's employment at Excapsa, according to the report.

"I had no knowledge of it, was not involved," Ryan told The Associated Press. "It was incredibly regrettable. It was a pretty sophisticated scheme."

His current company, Pala Interactive, began a test of its new software this week in New Jersey. The company is owned by the California-based Pala Tribe of Mission Indians. The company expects final approval over the weekend to launch its full palacasino.com site on Monday. Ryan said the software Pala is using in New Jersey now is different and has been tested by the state.

"Part of my baggage in the social media world is that people say the Pala platform is the UB platform," Ryan said. "It is not, in any way, shape or form. We took great pride in building a totally new site with state of the art anti-fraud protections. People coming to Pala are guaranteed a fair and safe experience."

In the letter, Rebuck cautioned the investigation is ongoing, and said that if any incriminating information surfaces, the state can withdraw its preliminary approval or refuse to grant final approval for Ryan and the company to offer Internet gambling in the state.

Ryan said he welcomed the release of the letter as "an amazing way to clear the air. It's going to come to a resolution, and the resolution is going to be the truth."

He said no one was prosecuted in the cheating scheme.

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Wayne Parry can be reached at http://twitter.com/WayneParryAC