Full Tilt Poker was a global ponzi scheme, according to lawyer
Tuesday, September 20, 2011
Full Tilt Poker was a global ponzi scheme, according to lawyer
On April 15th 2011, online poker site Full Tilt Poker was indicted by the US Department Of Justice on various criminal charges - I covered the matter in my Online poker domains seized article.
Today, the indictment was amended to include further charges; namely, that the owners of Full Tilt Poker - Ray Bitar, Howard Lederer, Christopher Ferguson and Rafael Furst - syphoned off players' deposits into their own bank accounts and those of other owners, amounts running to almost 500 million dollars, while maintaining an official position that these funds were safely stored in segregated bank accounts; additionally, that a total of $130,000,000 of deposits credited to players' accounts was never actually collected.
Here's is a slightly trimmed down copy of the new charges:
The Amended Complaint alleges that...Full Tilt Poker...also defrauded its poker players by misrepresenting to players that funds deposited into their online player accounts were secure and segregated from operating funds, while at the same time using player funds to pay out hundreds of millions of dollars to Full Tilt Poker owners.
The Amended Complaint further alleges that...Full Tilt Poker credited players' online gambling accounts with money that had never actually been collected from the players' bank accounts. Full Tilt Poker allowed players to gamble with - and lose to other players - this phantom money that Full Tilt Poker never actually collected or possessed. When other players won these phantom funds, their accounts were credited with money that Full Tilt
Poker did not actually possess, but now nevertheless owed to these players.
As a result, Full Tilt Poker soon developed a massive shortfall between the money owed to United States players and the money actually collected from United States players, with Full Tilt Poker having credited approximately $130 million in phantom money to U.S. players' online accounts that was never actually collected from players’ bank accounts.
The Amended Complaint further alleges that, as of March 31, 2011, Full Tilt Poker owed approximately $390 million to players around the world, including approximately $150 million owed to players in the United States. At that time Full Tilt Poker had only approximately $60 million on deposit in its bank accounts.
The Amended Complaint alleges that, meanwhile, from approximately April 2007 until April 2011, Full Tilt Poker, and its Board of Directors, Bitar, Howard Lederer, Christopher Ferguson, and Rafael Furst, all owners of Full Tilt Poker, distributed approximately $443,860,529.89 to themselves and other owners of the company. Payments to the Full Tilt Poker owners stopped only after April 15, 2011.
The Amended Complaint further alleges that...Full Tilt Poker credited players' online gambling accounts with money that had never actually been collected from the players' bank accounts. Full Tilt Poker allowed players to gamble with - and lose to other players - this phantom money that Full Tilt Poker never actually collected or possessed. When other players won these phantom funds, their accounts were credited with money that Full Tilt
Poker did not actually possess, but now nevertheless owed to these players.
As a result, Full Tilt Poker soon developed a massive shortfall between the money owed to United States players and the money actually collected from United States players, with Full Tilt Poker having credited approximately $130 million in phantom money to U.S. players' online accounts that was never actually collected from players’ bank accounts.
The Amended Complaint further alleges that, as of March 31, 2011, Full Tilt Poker owed approximately $390 million to players around the world, including approximately $150 million owed to players in the United States. At that time Full Tilt Poker had only approximately $60 million on deposit in its bank accounts.
The Amended Complaint alleges that, meanwhile, from approximately April 2007 until April 2011, Full Tilt Poker, and its Board of Directors, Bitar, Howard Lederer, Christopher Ferguson, and Rafael Furst, all owners of Full Tilt Poker, distributed approximately $443,860,529.89 to themselves and other owners of the company. Payments to the Full Tilt Poker owners stopped only after April 15, 2011.
According to today's article in Forbes, the attorney who filed the original charges made the following unflattering comments:
Full Tilt was not a legitimate poker company, but a global Ponzi scheme. Full Tilt insiders lined their own pockets with funds picked from the pockets of their most loyal customers while blithely lying to both players and the public alike about the safety and security of the money deposited.
Ironically enough, these additional charges were filed on the same day that Full Tilt and its regulator, the Alderney Gambling Control Commission, had been in a meeting to discuss the poker room's future licensing prospects. The outcome of the talks has not yet been disclosed, but it would be fair to say that there's a good chance that today's events on the other side of the pond are likely to modify it substantially.
The Full Tilt situation has been fervently discussed at the 2+2 poker forums, and the thread dedicated to today's breaking news had reached over a thousand posts in just over five hours when last I checked.
Additionally, poker player Tom Dwan, aka online poster "durrrr", who was involved with Full Tilt and is something of a halfway house between the company and the players, has answered questions put to him by players about his involvement with the company and other relevant matters - see the Durr answers questions about FTP discussion.
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