'Moneymaker' class action suit filed against PayPal over account seizures, Lena Evans is case's lead plaintiff

Lena Evans at the 2021 World Series of Poker
Haley Hintze Author Photo
Haley Hintze
Posted on: January 14, 2022 17:52 PST

The long-awaited class-action lawsuit promised by victims of PayPal's alleged unlawful seizure of account balances -- often from accounts with perceived gambling connections -- was filed today in a U.S. federal court in California. The action features well-known poker figure Lena Evans as its lead plaintiff in a case designed to challenge the giant online wallet's account seizure and confiscation policies.

Evans, currently a resident of Southern California, is joined by two other plaintiffs in the action. A second Californian, Roni Shemtov, also appears as a plaintiff, as does Illinois businessman Shbadan Akybekov. Other plaintiffs may be added at a later date.

The lawsuit has been planned for months and initially was to feature famed poker pro Chris Moneymaker as its lead plaintiff. Moneymaker had his PayPal account frozen and $12,000 confiscated, but after news of the planned lawsuit surfaced in poker news outlets, PayPal unexpectedly refunded Moneymaker's $12,000. The refund forced Moneymaker to withdraw from the planned lawsuit as one of its plaintiffs, though he vowed to continue working as an advisor on the case.

In June, Moneymaker's lawyer, Eric Bensamochan, told this writer, “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.”

Bensamochan, with Moneymaker's assistance, continued by finding other PayPal accountholders who had had their accounts frozen and funds seized, allegedly unlawfully.

Poker League of Nations founder Lena Evans emerges as new lead plaintiff

Lena Evans at the 2021 World Series of Poker Lena Evans competes at the 2021 World Series of Poker (Image source: Haley Hintze)

While numerous other possible plaintiffs brought their cases to Bensamochan for consideration, he ultimately selected Poker League of Nations (PLON) founder Lena Evans for the lead-plaintiff role. Evans had her own PayPal horror story to endure, as described within the case filing.

Evans had been a PayPal customer for 22 years and used the online wallet for several purposes. Those purposes included buying and selling new and used clothing on eBay, to organize a private poker league she operates, and to organize and operate her Poker League of Nations entity, which is the world's largest poker-specific group benefiting women's interests and needs.

In November of 2020, Evans discovered that PayPal had frozen her account. Six months later, in May of 2021, Evans discovered that PayPal had confiscated the account's $26,984 balance. Evans repeatedly tried contacting PayPal to find out why the account had been frozen and, later, why the balance was seized, but she never received any responses from PayPal.

Evans' PLON organization operates as a non-profit group, providing aid to needy women in poker including veterans' support, breast cancer, child-custody and other worthy matters. Following the initial publication of this piece, Evans confirmed to this writer that PayPal specifically seized funds from PLONcares, the wing of PLON that helps support poker-involved women who find themselves in emergency situations.

"I personally covered the losses from funds PayPal stole," Evans explained, noting that PLON actually didn't suffer a direct impact from the seizure, though she did. "We have shifted all donations to other payment vehicles; the same with our general PLON account."

Other plaintiffs offer similar claims

PayPal's alleged heavy-handedness in conducting its freezes and seizures runs through the claims made by the other plaintiffs as well. The second California-based plaintiff, Roni Shemtov, sold yoga clothing online for several years beginning in 2014. According to the lawsuit, PayPal froze her account in 2017 without explanation and seized $10,000 from its balance. In 2019, PayPal confiscated another $32,351.87.

Shemtov tried numerous avenues to contact PayPal but was either ignored, hung up on, allegedly told lies and more, all without ever receiving any genuine consideration. One account specialist reportedly told her that her account balance had been confiscated for using the same IP address and computer that other PayPal users used, except those other users on a shared computer had different PayPal accounts and sign-ins, and such sharing of a computer wasn't against PayPal's stated terms anyway.

Shemtov's PayPal horror story included a special bonus: After having her funds seized, the IRS, in 2020, demanded she pay taxes due on the money that had been taken from her by PayPal. She has paid roughly $1,000 to the IRS to date in connection with that claim, despite having no access to the funds PayPal seized.

The third listed plaintiff, Chicago businessman, Shbadan Akybekov, has had over $172,000 seized from the PayPal accounts of several businesses that he and his wife operated. As with the other plaintiffs, Akybekov was able to provide documentation of PayPal failing to respond to inquiries about why accounts were frozen and then had their balances confiscated. Some of Akybekov's confiscated funds may have involved legitimate refunds to customers, yet PayPal provided no accounting and also claimed that additional money was taken for "damages caused to PayPal from the user policy that [Akybekov] broke."

However, according to the filing, PayPal never provided any specifics regarding which part of the policy was violated, nor any explanation of how the "damages" were calculated. And, as with Shemkov, PayPal filed an IRS 1099K form in Akybekov's name in the amount of $162,517.19, as the “gross amount of payment third party network transactions,” while having confiscated the actual money and providing no further explanation.

Nine different actionable claims asserted

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

  • Conversion
  • Civil Violations of federal '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
  • Unjust enrichment
  • Declaratory relief
  • Formal accounting

The filing notes, "This action "stems from Defendant’s widespread business practice of unilaterally seizing funds from its clients’ financial accounts, without cause and without any fair or due process."

The filing also details that, “PayPal has failed to inform plaintiffs and members of the class of the reason(s) for the actions PayPal has taken, even telling plaintiffs and members of the class that they will ‘have to get a subpoena’ to learn the simple information as to why PayPal was holding, and denying plaintiffs, access to their own money,”

Such a subpoena process will likely begin in the months ahead. The case's filing appeared in mainstream outlets such as Bloomberg, which noted that PayPal declined to comment on the case's filing.

The lawsuit asks the federal court to certify the matter as a formal class-action claim. The plaintiffs, including Evans, currently seek "general, specific and compensatory damages, including restitution, in an amount to be proven at trial." The filing then asks for trebled damages as allowed under federal law, in addition to punitive damages and legal expenses as determined by the court.

Featured image source: Haley Hintze