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Wednesday, December 14, 2011

Finally Put to Bed

It appears the final chapter has been written on the USCF, Susan Polgar, Paul Truong and Gregory Alexander imbroglio that plagued the USCF a few years back.

     In August, 2008, Susan Polgar accused the USCF and some of its associates of conspiring to destroy her career and, possibly, the Texas Tech chess institute that bears her name.
     She filed a lawsuit in Lubbock district court against the United States Chess Federation, Inc., and 14 other associates and entities. She claimed certain federation members used the Internet and media to defame and slander her because they were jealous of her success. "Despite all her successes, there are others who strive for nothing more than to ruin Polgar's career and business relationships and to see her fail," the suit read…Because she is a woman and of foreign descent the USCF has long harbored ill will and jealously toward Polgar and more recently, the SPICE program."
     Several federation board members and the federation's lawyer were named in the suit, in which Polgar sought $25 million in damages. Sam Sloan, an ex-federation board member who lost his seat in the same election in which Polgar and her husband, Paul Troung, won seats on the board accused the couple of posting thousand of obscene Internet messages in his name, leading to his election loss. He filed a $20 million lawsuit against them and the federation in New York in October. Polgar's suit came on the heels of the federation's attempt to subpoena her and her husband.
     Back in January 2010, USCF agreed to a settlement with Polgar and Truong stemming from lawsuits filed by both parties. Polgar’s lawsuit alleged libel, slander, defamation and other claims. USCF’s lawsuit alleged email hacking and wire fraud. The USCF also filed a lawsuit against Susan Polgar and Paul Truong to remove them as Executive Board members and end their relationship with the USCF for not acting in the best interests of the USCF.
     Under the settlement agreement, all named parties except Gregory Alexander and Sam Sloan agreed to dismiss all claims and counter-claims in the actions. The Illinois lawsuit ended with a judgment confirming that Susan Polgar and Paul Truong were no longer Executive Board members. The USCF’s civil case against Alexander for email hacking and wire fraud continued and Alexander faced similar federal criminal charges in California.
     As part of the settlement, Polgar and Truong agreed to never contest the USCF Executive Board’s action in revoking their USCF memberships; acknowledge that they are no longer members of the USCF or members of the USCF Executive Board; agreed to never seek, run for, or accept a leadership position in the USCF; and never contest the Delegate’s actions that ratified the decisions of the USCF Executive Board at the August 2009 Annual Delegates Meeting.  Under the same settlement the USCF allowed Polgar and Truong to be playing, non-members of the USCF and would be listed as “Playing Non-Member Status.”
     The indictment against Alexander charged him with thirty-four separate counts of intentionally accessing a computer without authorization and one count of aggravated identity theft. The indictment alleged that Alexander violated the law by illegally accessing the e-mail account of Randall Hough as well as illegal possession and use of a means of identification of another, specifically the username and password belonging to Randall Hough, in relation to committing a fraud in connection with computers.
     From Fall 2007 to Spring 2008, Gregory Alexander accessed the personal email account of Randall Hough, a Director on the United States Chess Federation Board and obtained privileged attorney-client material. The privileged attorney-client material at issue was comprised of confidential e-mail communications from Karl Kronenberger, external counsel for the United States Chess Federation (USCF), to the members of the United States Chess Federation Board of Directors Legal Subcommittee of which Alexander was not a member.
     The result was a loss of over $50,000 to the USCF. Alexander has admitted in court proceedings that IP addresses used to access Hough’s personal email account belonged to him, Alexander . The use of an IP address masking tool depicted Alexander’s efforts to avoid detection. Messages collected suggest that on at least one occasion, Alexander accessed Hough’s account at the behest of Susan Polgar, who was at the time, a Director on the Federation Board.
     Beginning in June 2005, approximately 2500 messages, many with inflammatory content, were posted to internet newsgroups and attributed to Sam Sloan, a then sitting and now former Director on the United States Chess Federation Board. The postings were concentrated in chess related newsgroups and focused on principals and institutions associated with the USCF.
     In September 2007, Brian Mottershead, a USCF web systems administrator, began an investigation into the source of the postings. Mottershead noticed that several of the Newsgroup postings were copies of posts originally made on an internal USCF web forum. Posts to the USCF web forum were only accessible to USCF members. Mottershead theorized that the source of the postings was a member of the USCF. By matching the publicly available IP addresses in the headers of the Newsgroup postings to the IP addresses attributable to USCF members logging into the USCF web forum, a single suspect was identified: Paul Truong, a USCF Board Member and the husband of Susan Polgar.
     The investigation showed the value of a seat on the USCF Board of Directors carries prestige within the chess community and associated opportunities to monetize that prestige. For example, Directors may garner opportunities to earn speaking fees or host tournaments. At the time the postings began, Sloan was a sitting member of the USCF Board and up for election. Sloan lost his bid for reelection while Truong and Polgar became first-time Directors.
     As a result of the allegations the USCF retained an attorney in October 2007 and subsequently formed a subcommittee consisting of the members of the USCF Board with the exceptions of Truong and Polgar. Truong and Polgar were excluded from the subcommittee since Truong was the subject of the allegations and Polgar was married to Truong.
     In late 2007 and early 2008, Polgar communicated via email to the other members of the USCF Board several times and repeatedly referenced contents of the privileged material to which she, Polgar, referenced privileged material. Polgar made references to confidential legal strategy, confidential negotiations, and/or quoted verbatim from privileged material or private communications between other Board members.
     The USCF initiated an investigation to identify the source and later alerted the United States Secret Service and were able to identify several instances of intrusions into the Hough account. As a result Alexander was revealed as the culprit.
     Upon being questioned about her source for the privileged material, Polgar originally claimed to have obtained the privileged materials from the Internet and, later, an anonymous source who would be willing to testify. USCF investigated Polgar’s claim that the privileged material was available on the Internet and was not able to verify Polgar’s assertion. Additionally, Polgar failed to produce the anonymous source. On June 23, 2008, however, Polgar sent an email to the members of the Subcommittee that referenced the content of an email exchanged just hours earlier between the Subcommittee members Hough, Bill Goichberg, and Jim Berry.
     The USCF filed a John Doe lawsuit in San Francisco Superior Court. An investigation conducted by the U.S. Secret Service revealed that Alexander was a known business associate of Polgar’s. Alexander served as the webmaster for several websites owned by Polgar and it was suspected that Alexander was a source for Polgar of the privileged material. In the United States District Court for the Northern District of California on December 13, 2011 in the case of UNITED STATES v. GREGORY ALEXANDER the defendant pled guilty on Count 1 of Information and was referred to Probation.

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