Losing over $250k, Denial's former CEO believes he was a mark

After months of silence, Blackbeard comes forward with his story.

Counter-Strike: GO's Icon Kevin Hitt · 27 Jul 2019

3 comments

Photo: Twitter

Alone at a popular lunch stop in Newport Beach, California, self-made millionaire Patrick "BlackBeardAP" Smith sits with his hands behind his head, staring out at the ocean view, searching for answers. The former CEO and money man of Denial Esports is reliving the last six months, asking himself why he didn’t see the signs. Now, with his esports reputation in decline, along with being duped out of more than $250,000, Patrick beats himself up every day, wondering why he fell into league with Zachary Smith, the much-maligned owner of Denial Esports.


“This whole ordeal has affected all my relationships,” Patrick says as he looks off into the waves slowly rocking the docked boats. “How do you think my wife is looking at me right now? How many times am I going to make bad decisions? Losing six-figures sucks. I should have done my due diligence. I have a daughter to think about.”


Being involved with Denial Esports and losing upward of $250,000 wasn’t the first mistake Patrick has made in esports investments. In fact, his first mistake was probably how he believes he became a “mark.”


In 2018 Patrick invested in Battle7oken, a supposed crypto currency created by Tom Butler, who owned the Pro Battle League. The crypto currency would have been used to enter events, pay teams and players, and create fan rewards. Patrick gave $60,000 to Butler to help develop the crypto currency only to see nothing delivered.


And whether by coincidence or not, the exact moment Patrick lost that $60,000, Zachary Smith came into his life.


“I got a phone call from Zach, saying, 'oh man I heard you got scammed by Butler. Happened to me too,'” Patrick said. “'We should get together and talk about this Denial thing I am working on.'”


The two got together for meetings where Zachary showed Patrick paperwork that proved there was money in this project and, with a little help, could take Denial Esports into the realm of being a Tier-1 organization. At least, that's what Patrick thought. Zachary offered him the title of Chief Executive Officer.


“It looks like I was just simply targeted,” Patrick said, taking off his glasses to rub his eyes. “He knew that I was a positive person. He knew I had a following and some money. I think he needed a face to get past all the negativity of the brand and himself.”


Patrick invested and paid out over $150,000 in operating costs and investments, while he was told he would receive a return of 10%-15% every 30 days.


Patrick accepted the role of CEO without signing any paperwork and went ahead on a media campaign where he made videos driving in his car, talking about how he and Denial Esports could be a positive force in the esports ecosystem. And when Patrick asked Zach about being more involved in the day to day operations of Denial, Zachary sent a text message that stated that Patrick should be the positive face of the company. He should keep doing those videos and keep up the positive energy. Nothing more.


But that didn't satisfy Patrick.


Whether he was being naïve or believed he could change the image of Denial Esports, Patrick was fighting against years of neglect initially perpetrated by former Denial Esports owner Robby Ringnalda, where players were not getting paid, girlfriends were paying team house rent, and more. Zachary brought his own set of negativity with accusations of fake stream giveaways and running a gambling site without a license while claiming to have one.


But the biggest scam had yet to be unleashed on the players and staff members of Denial Esports.

Never miss a moment in esports.

Match notifications, latest esports news, and more. Get the Upcomer app now.

Get it on the App StoreGet it on Google Play


Since May, Zachary has been filing disputes with PayPal in an attempt to steal back the money he has paid out in salary and other expenses. Additionally, Denial’s Counter-Strike team had not been paid for over a month, which put Patrick and the squad at odds.


“Zachary told me he would pay them and that he would transfer money to the account so I could pay them,” Patrick relayed. “But that money never showed, so I offered to pay the team out of my own pocket, but they refused to take the money. I think Sir Scoots told them not to.”


The CSGO team was in fact offered back payment from Patrick but refused to take the payment because of one condition associated with signing the paperwork—a Non-Disclosure Agreement clause.


“That was the last thing I was going to do for Denial,” Patrick said. “So, when they refused, I knew I would have nothing to do with Denial again.”


That has not sat well with some people in Denial.


One player, who spoke on the condition on anonymity, said, “He was the CEO and he has responsibilities. He should pay the players. Make this right and move on.”


When asked about being the CEO and that he has a duty to Denial Esports, its players and staff Patrick is conflicted.


“I already gave over $150,000 of my own to this organization," he said. "There is a negative balance in the bank account. I know that I have money and some people see that and say, ‘Why can’t you just pay us?’ Well, I am done paying people out of my own pocket. I know it sounds harsh, but I just can’t afford it anymore.”


Having signed no paperwork and with the business entity in the red, Patrick is under no obligation to pay out of pocket.


“I’ve given money to some of the players in Denial recently because they were going to lose where they lived or needed money for food,” Patrick said as he looked away. “I love all these guys and wish I could do more, but the reality is I just can’t.”


“I know a lot of us are thinking more emotionally than logically,” Patrick said with more than a little sadness in his voice. “I just hope the players can understand, the business has zero money. In fact, less than zero. And now we have Zach taking money from people that they earned. It’s a disgrace.”


Will Patrick ever get back into esports?


“If the people will have me back after this, and I think it’s a worthwhile investment, I am going to find the most professional and best staff I can find," Patrick said. "Otherwise, never again.”

3 Comments

Trending Stories