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CEO of poker site Full Tilt arrested

Online GamblingOnline Gambling: CEO of poker site Full Tilt arrested

The chief executive of Full Tilt Poker, the beleaguered one-time Web poker giant, was arrested Monday on a plane that had just landed at John F. Kennedy International Airport as the government unveiled new criminal charges against him related to an alleged Ponzi scheme.

Ray Bitar, 40 years old, is the most significant person yet to turn himself into the Justice Department's 15-month-long effort to prosecute the three one-time leading online poker companies in the U.S. He pleaded not guilty in a hearing in Manhattan federal court Monday, and will be able to be out on bail after posting a $2.5 million bond, a judge ruled.

The government first unsealed criminal indictments against Mr. Bitar, who is from Los Angeles but was residing in Ireland, and 10 others in April 2011 that charged the group with money laundering, bank fraud and illegal gambling. Six members of the group have pleaded guilty to some charges, while five, including Mr. Bitar, remained outside the country and hadn't yet entered pleas. One person among the group — a bank executive — has been sentenced to three months in prison.

Mr. Bitar had remained in Ireland in order to try to negotiate a possible resolution for his company and decided to return now to face charges because his part in that effort is now complete, his attorneys said in court Monday. The company is expected to finalize a deal for a one-time rival, PokerStars, to acquire its assets shortly, a person familiar with the matter said.

A representative for PokerStars said he had no comment on talks involving PokerStars and Full Tilt.

In the indictment unsealed Monday, the government added the allegation that Mr. Bitar and an employee had committed wire fraud by misrepresenting to potential customers that their funds would be safe in order to convince them to transfer money to the company.

The company also used a Ponzi scheme to enrich Full Tilt owners — mainly a group of professional poker players — while covering up financial problems at the company, the government alleged.

A perpetrator of a Ponzi scheme illegally uses money from one group of people to pay off another group.

The alleged schemes, first mentioned by the government in connection with a civil complaint last year, is part of what led the company to fail to pay back poker players credited with $350 million in their player accounts, the government says. Full Tilt has denied it operated a Ponzi scheme.

"I know that a lot of people are very angry at me," Mr. Bitar said in an emailed statement from his lawyers' office earlier Monday. "I understand why. Full Tilt should never have gotten into a position where it could not repay player funds."

John Baughman, an attorney for Mr. Bitar attorney, said, "We hope that we will be able to resolve Mr. Bitar's remaining legal issues in a way that is satisfying to all parties."

The charges last year involving Full Tilt Poker and PokerStars, which were both civil and criminal, have upended the online poker industry in the U.S., which in 2010 represented around $18 billion in wagers from around 1.9 million customers, according to market watcher H2 Gambling Capital. Online poker wagers in the U.S. have plummeted 83% since then. In April 2011 the U.S. Attorney for the Southern District of New York blocked Full Tilt and PokerStars in the U.S.

Executives at PokerStars have denied the charges against them and the company.

Full Tilt was started around 10 years ago in Los Angeles by Mr. Bitar, a stock trader, and Chris Ferguson, a successful professional poker player. The company moved to Ireland as the U.S. government increasingly clamped down on online gambling companies.

In the indictment unsealed Monday the government portrayed Mr. Bitar as the director of an increasingly out-of-control scheme between 2008 and 2011 to keep profits flowing to himself and the sites owners and continued to do so even as a government investigation and other factors were increasingly causing the site to become depleted of funds.

The site's users, thousands of individual poker players, had set up accounts with Full Tilt in order to have money to wager with, the government says. Yet toward the end of 2010, it became increasingly difficult for Full Tilt to transfer money due to the government's crackdown on payment processing for poker. Full Tilt all but ran out of funds after money was seized by the government, stolen by payment processing companies or never collected from players yet credited to their accounts, the government says, yet portrayed to players that their funds were safe.

At the time of the government crackdown in April 2011, Full Tilt had just $60 million left, the government says. Only then the company stopped making monthly $10 million profit-sharing payments to owners, according to the government and people with knowledge of the situation.

"For the last 15 months, I have worked hard on possible solutions to get the players repaid," Mr. Bitar said in the statement Monday. "Returning today is part of that process. I believe we are near the end of a very long road, and I will continue to do whatever is required to get the players repaid, and I hope that it will happen soon."

WSJ

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15 comments. Last comment 2 years ago by LottoGuyBC.
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Avatar

United States
Member #122696
February 6, 2012
202 Posts
Offline
Posted: July 3, 2012, 11:45 am - IP Logged

The government does not like competition. 

    maximumfun's avatar - Lottery-064.jpg

    United States
    Member #124621
    March 16, 2012
    1492 Posts
    Offline
    Posted: July 3, 2012, 12:19 pm - IP Logged

    The ultimate gambling...

      Littleoldlady's avatar - basket
      Clarksville
      United States
      Member #487
      July 15, 2002
      17638 Posts
      Offline
      Posted: July 3, 2012, 12:24 pm - IP Logged

      Apparently some of the players filed suit against the company complaining of not receiving their money.  They did an show on 20/20 or 48 hours about this.  The players lost a LOT of money and the company did not try to do the right thing and pay them.  I don't blame them, I would have filed suit, too.  Some of those players lost from thousands to  million dollars of dollars each...They couldn't even get back the money they had depositied in their accounts.

      If you know your number is going to hit, have patience and then KILL IT!

      You never know when you will get another hit.

        dpoly1's avatar - driver
        PA
        United States
        Member #66141
        October 16, 2008
        1450 Posts
        Offline
        Posted: July 3, 2012, 12:28 pm - IP Logged

        Arrest Congress, SCOTUS & THE entire Executive Branch for their Ponzi scheme!

        Mad

        dpoly1 - Playing the lottery to save the jobs of those that build, transport, sell & maintain luxury items! -

         

        Eschew Poverty ........... Vote Conservative!


          United States
          Member #111446
          May 25, 2011
          6323 Posts
          Offline
          Posted: July 3, 2012, 12:48 pm - IP Logged

          The government does not like competition. 

          Well said Venom!

            RedStang's avatar - threefin zpsd48411ab.jpg
            Dutchess NY
            United States
            Member #121966
            January 21, 2012
            2675 Posts
            Offline
            Posted: July 3, 2012, 1:56 pm - IP Logged

            Funny how Mastercard and Visa are quietly hiding out.Sulk OffSulk Off.   They are the loan sharks for this so called illegal gambling. They never said no to me when i played.

              Littleoldlady's avatar - basket
              Clarksville
              United States
              Member #487
              July 15, 2002
              17638 Posts
              Offline
              Posted: July 3, 2012, 5:33 pm - IP Logged

              Funny how Mastercard and Visa are quietly hiding out.Sulk OffSulk Off.   They are the loan sharks for this so called illegal gambling. They never said no to me when i played.

              You are right, they are hiding out.  A group of those players were Ivy League graduates and they were the ones who contacted the TV show that aired that segment.  They had so much evidence against those guys for the Ponzi scheme they were running. They had records of just their deposits and wins and it was a lot of money. The reporter talked to one of the owners of that site and he started laughing but wouldn't give out any information about anything and of course, he denied everything.  I always wondered if they had gotten away with it.

              If you know your number is going to hit, have patience and then KILL IT!

              You never know when you will get another hit.

                Avatar
                Kentucky
                United States
                Member #32652
                February 14, 2006
                5515 Posts
                Offline
                Posted: July 3, 2012, 7:53 pm - IP Logged

                Funny how Mastercard and Visa are quietly hiding out.Sulk OffSulk Off.   They are the loan sharks for this so called illegal gambling. They never said no to me when i played.

                It depended on which bank issued the Visa or Mastercard. I have four different bank cards, but only one would allow me to deposit and withdraw money from my poker account after the President signed the Internet Gaming Act into law. Never had an account with Full Tilt because a friend told me about playing inconsistencies. His reasons were justified too when a player was caught hacking into their program; he could see all the other players hole cards at his table.

                When the Justice Department finally enforced the Internet Gaming Act, Full Tilt couldn't pay its U.S. players. The Poker Players Alliance estimated it was over $60 million. The Pokerstars accounts were fully funded and they paid off all their U.S. players. As a frequent player, I never questioned how I could deposit and withdraw money from my poker account using my bank when I knew my other banks wouldn't. Apparently my bank had an agreement with the bank that laundered the money.

                It was only after Full Tilt's domain was shut down that it was made known the owners were skimming money from its players accounts.

                  JonnyBgood07's avatar - Patriots logo1.jpg
                  Connecticut
                  United States
                  Member #61623
                  May 29, 2008
                  19860 Posts
                  Offline
                  Posted: July 3, 2012, 9:04 pm - IP Logged

                  The government does not like competition. 

                  I Agree!AMEN

                  "...Life is not a matter of holding good cards,but sometimes playing a poor hand well...
                  'Fortune Cookie wisdom'

                   


                    Avatar
                    Seattle, Washington
                    United States
                    Member #121158
                    January 3, 2012
                    88 Posts
                    Offline
                    Posted: July 3, 2012, 9:18 pm - IP Logged

                    When will these nitwits learn that ponzi schemes NEVER work out?  Medium security prisons are filled with ponzi schemers who ended up ripping off people for millions/billions of dollars, and every single one of these remorseless criminals says the exact same thing: "I didn't mean for it to continue; I did it one time because we were short of funds, and I got in too deep & couldn't pay people back..."

                      LottoGuyBC's avatar - Lottery-050.jpg
                      British Columbia
                      Canada
                      Member #116105
                      September 4, 2011
                      3598 Posts
                      Offline
                      Posted: July 3, 2012, 9:30 pm - IP Logged

                      Ray Bitar You're NeXT! Hit With Stick

                      Boxing          Bash         Chair

                      "You have to be in it to win it!"

                        NightStalker's avatar - IMG00073 20100720-1609_2.jpg
                        Nothing Good Happens After Midnight
                        East of Columbus, OH
                        United States
                        Member #120848
                        December 28, 2011
                        417 Posts
                        Offline
                        Posted: July 4, 2012, 9:41 am - IP Logged

                        I am not a fan of video online poker.  I just believe that those running the sites can manipulate the software in their favor.  I prefer to play with live people.

                        However, I don't have any objections to people being able to gamble online.  This is just another intrusion into our personal lives by a helicopter, cradle-to-grave, nanny state government.

                        Life's Too Short To Be Unhappy Cool

                          Cletu$2's avatar - Lottery-050.jpg
                          S.E.Iowa
                          United States
                          Member #120509
                          December 21, 2011
                          534 Posts
                          Offline
                          Posted: July 4, 2012, 10:09 am - IP Logged

                          I am not a fan of video online poker.  I just believe that those running the sites can manipulate the software in their favor.  I prefer to play with live people.

                          However, I don't have any objections to people being able to gamble online.  This is just another intrusion into our personal lives by a helicopter, cradle-to-grave, nanny state government.

                          You took the words right out of my mouth.I don't see the thrill of online poker,but I don't begrudge the people who do enjoy it.

                          When I was a boy I was told that anybody could become President; I'm beginning to believe it. ~Clarence Darrow

                          There ought to be one day - just one - when there is open season on senators. ~Will Rogers


                            United States
                            Member #111446
                            May 25, 2011
                            6323 Posts
                            Offline
                            Posted: July 4, 2012, 10:24 am - IP Logged

                            I am not a fan of video online poker.  I just believe that those running the sites can manipulate the software in their favor.  I prefer to play with live people.

                            However, I don't have any objections to people being able to gamble online.  This is just another intrusion into our personal lives by a helicopter, cradle-to-grave, nanny state government.

                            I Agree!   Let the government work on getting back our jobs, and bringing this economy back to "FULL TILT"

                                       
                                          Keep your noses out of our private affairs. You serve us, not the other way around.  Angry