Daybreak update: Renova boss questioned over Columbus Nova’s alleged payment to Michael Cohen

    
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MMOs and politics once again collide this week as last night CNN broke the news that Robert Mueller’s FBI team has zeroed in on Russian oligarch and Renova Group chairman Viktor Vekselberg as part of the Special Counsel investigation into Russian election interference, questioning Vekselberg about money Renova’s US “affiliate” transferred to US President Donald Trump attorney Michael Cohen. (Tangentially, those allegations were brought to light by Stormy Daniels attorney Michael Avenatti.)

And the name of that US affiliate under investigation? Yeah, it’s Columbus Nova, the firm that claimed it acquired MMORPG studio Daybreak back in 2015. Here we go again.

“FBI agents asked Vekselberg about payments his company’s American affiliate, Columbus Nova, made to Cohen, according to one source,” CNN reports. “The Russian was questioned as well about $300,000 in political donations by Andrew Intrater, Vekselberg’s American cousin who is the head of Columbus Nova, sources said.” Columbus Nova claimed to CNN that it is “owned and controlled by Americans”; it further denies any use of “Columbus Nova as a conduit for payments” to Cohen.

A little backstory: In April, we covered the US government’s impending sanctions and asset freeze of Renova Group, fearing that MMORPG company Daybreak’s overlords at Columbus Nova would be swept up in the chaos, which in retrospect is adorable, given how it’s since teleported to the front page of the New York Times. So we reached out to Daybreak seeking reassurance. Daybreak then did the bizarre: It effectively made Massively OP the beneficiary of the breaking news that Daybreak in fact claimed “no affiliation with Columbus Nova” and that former Columbus Nova rep Jason Epstein “is and has always been the primary owner and executive chairman of Daybreak Game Company.”

This came as a huge shock that rippled outward even to mainstream gaming sites, as Daybreak and Columbus Nova had been claiming in press releases, privacy policies, Reddit, interviews, and even Wikipedia that CN had acquired Daybreak since February of 2015 when SOE sold it. When pushed for clarification, Daybreak told us that its three years of statements amounted to a “miscommunication,” that the “distinction was never corrected in the past, so [it was] correcting that now.” Oh, and by “correcting,” it apparently meant outright deleting hosted documents and Wikipedia entries to the contrary (which the MMO community dutifully anticipated and recorded).

That stunner was followed up by the sudden departure of Daybreak’s Chief Publishing Officer and former Senior Vice President, Laura Naviaux. And then the day after that, Daybreak laid off at least 70 people; according to our sources, it was an unrelated downsizing due to the poor performance of H1Z1, but its catastrophic timing added fuel to the fire and ignited new rumors, such as the rumor that Daybreak was in the middle of acquisition talks and that it in fact owned Standing Stone Games outright rather than merely published LOTRO and DDO.

After the layoffs, Daybreak then made a new claim to Ars Technica – and this should bring us full circle – that not only did Columbus Nova never own Daybreak, but Renova didn’t own Columbus Nova, and so therefore Daybreak would clearly prefer we conclude that Daybreak is in no danger whatsoever, in spite of the fact that “ownership” is not really the only thing that matters to the investigation or the sanctions (hence why the papers keep using the term “affiliate”). In any case, these claims are seemingly contradicted by the public record as well as Renova’s own website as of February of this year, and it remains unclear whether law enforcement will be persuaded by corporate semantics.

Source: CNN, New York Times, WaPo. With thanks to Serrenity, David, Scott, Brett, A Dad Supreme, Yrys, Derek, Paul, Gil, and everyone else who pinged us with this.

Get caught up on the whole Daybreak/Columbus Nova fiasco:

Update #1: We’ve since been made aware that MMORPG.com has a piece on this too from last night. Moreover EQ2Wire has a thread wondering whether Daybreak is about to shut down, now updated with this new development.
Update #2: NBC is reporting that “Columbus Nova has also registered many alt-right internet domains, though the domains return an error message,” implying that the company was used for other nefarious purposes within the US as well.

“They were purchased in Columbus Nova’s name by Frederick Intrater—the company’s design manager, brother of CEO Andrew Intrater and cousin of Russian oligarch Viktor Vekselberg, who owns parent company Renova—using Columbus Nova’s NYC address,” the NBC journalist (and article co-author) continued on Twitter. “It doesn’t appear any of these sites actually hosted any content, but the alt-right domains were purchased in 2016 and 2017.” So yep. With thanks to Dan.

Update #3 (Thursday): CNN has a new piece up on the apparently continuing but pointless efforts on the part of the Renova/CN “affiliates” to scrub the web of references to their relationship. Apparently, they’ve said they’re just trying to help “clear up media confusion” about the whole scenario. Because it’s the media that’s confused, see. Wonder where Daybreak got the idea to try this back in April? Thanks, Wil!
Update #4 (Friday): A few more updates for your Friday afternoon. Commenter Edene linked us to a Slate report that basically repeats a lot of the digging MOP writers and commenters did back in April into the relationship between Daybreak, CN, and Renova, though of course now it’s on mainstream websites. Good work folks!

@MSandersonD, who’s been digging up a lot of dirt on Daybreak and CN on Twitter, noted a GIbiz piece that reports game studio Harmonix – which was also purchased by Columbus Nova – is denying that the purchase ever happened. Bizarrely, Harmonix also claims it has “corrected [it] multiple times over the last 7+ years,” though the Harmonix rep making the claim could not provide those corrections. GIbiz says it couldn’t find any record of those corrections in its research either. Somehow, we suspect they don’t exist.

Finally, a Daybreak community manager told H1Z1 players on Reddit that the game’s weekly stream had been effectively canceled because of a “company-wide meeting today that starts before and ends after our usual stream times.” It’s not clear what that meeting is about, though there’s plenty of speculation right now about the bleak future of Just Survive, given that Daybreak hasn’t piped up about the future of the game since the layoffs back in April. (Thanks, Kinya!)

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Adam Russell

Rumors of DBG being shut down by June 6 appear to be false.

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John D A

Daybreak were warned about the investigations into them for years, and their response was to try and ban those who were trying to warn them, to lie and to pretend that nothing was happening. They’re incompetent and dishonest.

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Denice J. Cook

They might have known all about it or had heard the rumors, but as they’re not Columbus Nova or Renova, but merely owned by them, there was little they could do about any of it.

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John D A

Nonsense. For a start, they could stop lying and pretending that they’re not owned by Columbus Nova.

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Killick _

Exactly. The only people they are fooling are the ones ( MMO players) still paying them money within their games. Now that’s dishonest when they know what’s coming.

I believe looking at the earlier topic postings here (legal links) that DB had until April 06 to sell the IP’s. After that it was impossible as part of the 2Billion dollar asset freeze legal order by the US government to wind down operations for good by June 06, 2018.

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Denice J. Cook

Actually, the government issued the smackdown April 6th, too, so no one knew it was coming beforehand (that’s the point when the long arm of the law intercedes). The ensuing paperwork said that no selling could be done from April 6th, on, meaning “the minute you hear about this, it’s already too late to sell off anything.” Just an FYI there. You are making Daybreak devs themselves out to be a lot worse than they really are. It’s the Russian oligarch who owns CN who’s the legal problem here.

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Killick _

I never mentioned the DB devs. My point was for whoever was making the final business decisions ( Epstein) on continuing to disconnect himself from the parent company and bilk players.
And thats dishonest. Im well aware of the situation, Denise, thanks.

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John D A

Except that representatives from Daybreak are actively lying, and have done that repeatedly since 2015, when they claimed that Columbus Nova had nothing to do with Renova. You seem to have forgotten that part for some reason.

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Adam Russell

“Daybreak were warned about the investigations into them for years,”

What on earth are you talking about?
I have seen no information in this or any other article that says Daybreak itself is or was under investigation – for anything. The only investigating going on will be to determine whether they do or do not fall under the umbrella of the sanctions. And if they do, its purely an ownership issue – not an indication of wrongdoing on their part.

Surely you are not implying that Daybreak helped interfere with US elections???

amkosh
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amkosh

While I can see why Daybreak et al want to distance themselves, I don’t know why on earth they would take this approach. Smells a ton like at the very least Obstruction of Justice, if not outright racketeering. Its also stupid. Every one of these sales there’s paperwork on both sides. Sony, or more properly, a unit of Sony has all the paperwork on SOE’s sale. There’s no way in hell Sony is going to not turn that over to DoJ when asked. And if it says that Columbus Nova is the purchasing entity? Well, I suppose Epstein could produce a transfer document dating conveniently back, but would the feds believe it? I doubt it. As a juror, I doubt I would buy it. I certainly wouldn’t buy it unless the one of the parties that made it introduced it, and I doubt any competent lawyer would allow Epstein on the stand.

What I don’t know is what it actually means for Daybreak’s games. I can’t imagine that if there’s a hint of money laundering (and there seems to be WAY more than a hint), that the DoJ would allow it to continue. It has assets and I would imagine they would be sold. I can’t imagine any company wanting to buy this problem now as Daybreak itself is tainted.

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Kevin McCaughey

I can’t see how they are going to let it go. At the least I see EQ being sold.

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Adam Russell

The thing is – how much effort does the doj want to put into vetting the buyer? How much distance from CN does there need to be before its sufficiently divested? Would Epstein owning it be sufficient? What about his cousin? How far from CN would it need to be before its considered to be a “real” sale?

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Adam Russell

Im fairly sure whenever you sell a corporation there is paperwork filed with the government too.

VentyRed
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VentyRed

The Messy Businesses of Andrew Intrater, Who Paid Michael Cohen Bigly and Took a Bite of Gawker, Too

Detailed history of Vekselberg, Intrater and Epstein and their sordid business dealings (hint: they do well, most others do not). They even credit MOP which is nice :-)

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Edene

Such shady characters. Why are we giving them our money?

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Adam Russell

You arent giving them your money – you are trading your money for something you desire.

Celestia
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Celestia

I click the link each day thinking “surely there’s not any more new information in the news about this” and am proven wrong.

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VentyRed
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VentyRed

Question: What does Harmonix and Daybreak have in common?

A) Both were announced as acquired by Columbus Nova
B) Jason Epstein is involved in both somehow, someway
C) Both have sketchy PR departments that underestimate the intelligence of their customers
D) All of the above

VentyRed
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VentyRed

However, Daybreak customers haven’t shied from suggesting that a company like Daybreak — one that spent the past few years saying that it was ultimately owned by a Russian oligarch now sanctioned by the U.S. — could be a handy tool for laundering funds, especially for someone trying to get money out of Russia proper.

As one user wrote on Massively Overpowered, laundering money via the types of games Daybreak provides “is not impossible, and in the grand scheme of money laundering is probably logistically much simpler [than] many of the other scheme[s], and it would all look legitimate and be mixed in with a fair amount of actual legitimate consumer transactions.”

Why is this American video game company suddenly distancing itself from a Russian oligarch?

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Alex Willis

The funniest take on it so far…

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Kevin McCaughey

This is so outrageous. I cannot believe that a western democracy would stand for this but you are all just sitting there laughing about it. Yes the above is funny, but in any other country except possibly Russia/North Korea/Iran etc said Presidente would be up in front of a judge. But you guys just keep rolling. I thought I couldn’t be surprised by what came out next about Trump but even now I am outraged on your behalf about how your democracy has been totally bought and sold on live TV. C’mon people get angry FFS!!!

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Zen Dadaist

Well for what it’s worth, I am pretty angry. But I’m not American, in America or have any way of getting those corrupt AF shitheads out. My own country is busy decapitating itself anyway (Brexshit) and I have my hands full trying to deal with that. So what do folks like me do? Laugh because the alternative is cry :p

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Leontes

Yeah, my daily “Google Trump Show” beats the s*** out of even House of Cards… Never gets boring, and there’s this totally surreal element of this being non-fiction (I so much wish it was)…

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Alex Willis

Hey bud, I’m not American! I reserve the right to laugh at the greatest shitshow in global democracy.

I do agree with you that Americans should be very, very angry about what is happening and demand change. But here’s the thing: maybe they’re more OK with it than you think they are. Trump’s favourite justification for acting like a jackass is “I won the election”. It’s circular logic, the logic of a schoolyard bully. And he is just right enough to call attention to an ugly truth: enough people want him there to keep him there.

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Bruno Brito

Wait, what?

Did you ever came to Brazil?

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Armsbend

It’s because the economy has been doing the best it has done since the pre-Bush years. If it weren’t – the house would be burning down as we type. Sadly – for most people – it is a deceptive ruse that the majority of people will not understand for years to come. All of those tax cuts are going straight to stockholders – who were well off to begin with. Not only is the upper echelon’s yearly tax status being enhanced starting next tax season – but they are being handed easy profits in the form of stock buybacks. The stock market is at this time being artificially (somewhat there are many positive indicators) held up by the buybacks.

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Nathan Aldana

Except it really isnt. Its only doing well if you own a company or are upper middle class.

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Armsbend

Doing well yes but you cannot deny that the demand for employment is much better than it was 5-10 years ago. There is job demand. In my area of Atlanta it is stark.

Wages are still stagnant – I don’t seeing that changing any time soon if ever. Wages are the most important thing facing workers – not the amount of jobs filled imho.

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Adam Russell

If the shortage of labor was real then wages would rise. Its like a law of nature.

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DeadlyAccurate

If you think we’re not furious, you’re not paying attention. We’re beyond furious. But we can’t spend every minute of every day being angry all the time, and people like Seth Meyer and Trever Noah and John Oliver help to remind us to laugh at the absurdity of it all, and to make time to enjoy life, too.

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Adam Russell

Mueller is doing his job the right way and you need to give him the time to do it right. If you rush something like this it wont work.

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rufty

I’ve returned to EQ2 to try out the Tradeskill Storyline that was recently patched in and in case – you know – the game closes in June. I’m really glad I have. It’s much a great MMO even if it’s no longer in it’s golden age!