Welcome Guest
Log In | Register )
You last visited December 2, 2016, 7:21 pm
All times shown are
Eastern Time (GMT-5:00)

Full Tilt Poker a ponzi scheme, says U.S. attorney

Online GamblingOnline Gambling: Full Tilt Poker a ponzi scheme, says U.S. attorney

NEW YORK — An Internet poker company that was blocked from operating in the U.S. in the spring as part of an online gambling crackdown was "not a legitimate poker company, but a global Ponzi scheme," federal prosecutors said Tuesday.

The popular Full Tilt Poker website illegally raided player accounts to fund operations and make lavish payments to its owners, Justice Department lawyers said in a revised civil lawsuit filed in New York.

Over four years, the company used $444 million in player money to pay board members, including well-known professional poker players Christopher Ferguson and Howard Lederer, investigators said.

The poker site had promised players that their accounts were protected and wouldn't be touched. But authorities say that, as of March, the company had only $60 million left in its bank accounts to cover the $390 million it owed to players. It routinely mingled player money with its own finances, and took cash from some customers to pay out winnings due to others, prosecutors said.

"Full Tilt was not a legitimate poker company, but a global Ponzi scheme," U.S. Attorney Preet Bharara said in a statement. "Not only did the firm orchestrate a massive fraud against the U.S. banking system, as previously alleged, Full Tilt also cheated and abused its own players to the tune of hundreds of millions of dollars."

A lawyer for the site, Barry Boss, was traveling Tuesday and not immediately available for comment. The Associated Press could not immediately locate Ferguson, Lederer or their representatives for comment.

Federal authorities initially sued Full Tilt Poker in April as part of a broad crackdown on the most popular online poker sites in the U.S. They also filed criminal charges against the company's two top executives, Nelson Burtnick and Raymond Bitar.

Those charges are pending, and the men are still being sought by authorities. Previously, they have issued statements through a publicist condemning the charges as unfounded.

Executives at two other sites, PokerStars and Absolute Poker, also face charges and civil suits seeking millions of dollars in gambling proceeds.

U.S. lawmakers made it a crime to accept money in connection with unlawful gambling in 2006, but some big card-playing sites continued to operate anyway, saying their off-shore status or methods of processing payments put them outside the law's reach.

Many of the companies did business by having gamblers deposit money in special online accounts. Those accounts were then used to pay losses and receive winnings.

In its revised lawsuit against Full Tilt, Justice Department lawyers said that even though the company had assured players that those accounts "are segregated and held separately from our operating accounts," they were actually drained regularly for other purposes, including paying the company's owners and board members.

Bitar got $41 million and Lederer got $42 million, the lawsuit said. Ferguson was supposed to get $87.5 million, although he may have only received $25 million of that amount so far, federal prosecutors claimed.

Thanks to four4me for the tip.

AP

We'd love to see your comments here!  Register for a FREE membership — it takes just a few moments — and you'll be able to post comments here and on any of our forums. If you're already a member, you can Log In to post a comment.

12 comments. Last comment 5 years ago by Stack47.
Page 1 of 1
dpoly1's avatar - driver
PA
United States
Member #66141
October 16, 2008
1672 Posts
Offline
Posted: September 21, 2011, 8:57 am - IP Logged

Well, the Federal Government should recognize a Ponzi Scheme when it sees one.

Most of what they do is a Ponzi Scheme!  Crazy

    jackpotismine's avatar - kanji for_peace.jpg
    Kunming
    China
    Member #57910
    January 23, 2008
    3626 Posts
    Offline
    Posted: September 21, 2011, 9:24 am - IP Logged

    Well, the Federal Government should recognize a Ponzi Scheme when it sees one.

    Most of what they do is a Ponzi Scheme!  Crazy

    Well said!

    Play to win!

      Eighty0uts778's avatar - spherewall2
      New Member
      Texas
      United States
      Member #69610
      January 13, 2009
      6 Posts
      Offline
      Posted: September 21, 2011, 9:57 am - IP Logged

      they kept 25  dollars of my money , another poplar website i was on gave me back my money 2 months after black friday 4-15-11... the 25 dollars i lost is no big deal ,,,but i feel sorry for the pros an people on the sight that lost so much money...since 2006 its been kinda shakey ground for online poker in the U.S  because there was a law passed making it ilegal to play for money.... there was still ways to make a deposit an play for real money in  America..... probly wasnt a good idea to have kept more than 2 or 3 thousand in the account if you were good enough to be a pro or someome just earning a little extra money...

      Dance

        cantw82win's avatar - Lottery-043.jpg
        New Member
        Simpsonville
        United States
        Member #116839
        September 21, 2011
        1 Posts
        Offline
        Posted: September 21, 2011, 10:10 am - IP Logged

        Well, the Federal Government should recognize a Ponzi Scheme when it sees one.

        Most of what they do is a Ponzi Scheme!  Crazy

        Boy, That's the truth Disapprove . Sounds just like our Social Security System .

          Raven62's avatar - binary
          New Jersey
          United States
          Member #17843
          June 28, 2005
          49615 Posts
          Offline
          Posted: September 21, 2011, 11:21 am - IP Logged

          Well, the Federal Government should recognize a Ponzi Scheme when it sees one.

          Most of what they do is a Ponzi Scheme!  Crazy

          Thud

          A mind once stretched by a new idea never returns to its original dimensions!

            LottoGuyBC's avatar - Lottery-050.jpg
            British Columbia
            Canada
            Member #116101
            September 4, 2011
            4033 Posts
            Offline
            Posted: September 21, 2011, 12:32 pm - IP Logged

            it's a good thing I cashed out half my money in January 2011.

            looks like the other half I will never see again Chair 

            Stars is the only site I play on now

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

              LottoGuyBC's avatar - Lottery-050.jpg
              British Columbia
              Canada
              Member #116101
              September 4, 2011
              4033 Posts
              Offline
              Posted: September 21, 2011, 12:35 pm - IP Logged

              guys like Durrrr kept like a million on there

              prolly wont get that back but who knows

              send  The Professor to prison Group Hug

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

                rdgrnr's avatar - walt
                Way back up in them dadgum hills, son!
                United States
                Member #73904
                April 28, 2009
                14903 Posts
                Offline
                Posted: September 21, 2011, 8:46 pm - IP Logged

                What is the federal government all in an uproar about Ponzi Schemes for?

                They said the Poker outfit promised the players money would never be touched - and it was.

                That's the same thing the feds told us about the money we put into Social Security - that it would never be touched. But it was touched. It was all looted and spent and replaced with worthless IOU's.

                Social Security is now the biggest Ponzi Scheme in the history of the world.

                The thought of the federal government going after somebody for running a Ponzi Scheme is a GD joke.


                                                             
                                     
                                                         

                 

                 

                 

                 

                                                                                                                   

                "The only thing necessary for evil to triumph is for good men to do nothing"

                                                                                                            --Edmund Burke

                 

                 

                  sully16's avatar - sharan
                  Ringleader
                  Michigan
                  United States
                  Member #81740
                  October 28, 2009
                  40252 Posts
                  Online
                  Posted: September 21, 2011, 9:57 pm - IP Logged

                  What is the federal government all in an uproar about Ponzi Schemes for?

                  They said the Poker outfit promised the players money would never be touched - and it was.

                  That's the same thing the feds told us about the money we put into Social Security - that it would never be touched. But it was touched. It was all looted and spent and replaced with worthless IOU's.

                  Social Security is now the biggest Ponzi Scheme in the history of the world.

                  The thought of the federal government going after somebody for running a Ponzi Scheme is a GD joke.

                  Yeah, more like a turf war.

                  Did you exchange a walk on part in the war ?

                  For a lead role in a cage?

                   

                                                              From Pink Floyd's " Wish you were here"

                    rdgrnr's avatar - walt
                    Way back up in them dadgum hills, son!
                    United States
                    Member #73904
                    April 28, 2009
                    14903 Posts
                    Offline
                    Posted: September 21, 2011, 11:59 pm - IP Logged

                    Yeah, more like a turf war.

                    Yep, I'm not too crazy about Perry but he hit the nail on the head on this one.


                                                                 
                                         
                                                             

                     

                     

                     

                     

                                                                                                                       

                    "The only thing necessary for evil to triumph is for good men to do nothing"

                                                                                                                --Edmund Burke

                     

                     

                      CrazyHazyYay!'s avatar - atlanta sports-teams-300x208.gif
                      Born in the USA
                      United States
                      Member #108003
                      March 19, 2011
                      46 Posts
                      Offline
                      Posted: September 22, 2011, 7:55 am - IP Logged

                      Hahahahaha I cant believe I considered dropping out of college to become an online poker pro on that exact site. I seriously dodged a bullet there.. I only played freerolls after reading Chris Jesus Ferguson's journey to turn a freeroll dollar into over $100,000. Guess I should really count my blessings I didnt lose any real money there. I think I'll just stick to Powerball and Mega Millions.

                      While the value of a dollar is substantial, hope is priceless. But if you ain't got a dollar, then it's hopeless.

                        Avatar
                        Kentucky
                        United States
                        Member #32652
                        February 14, 2006
                        7295 Posts
                        Offline
                        Posted: September 23, 2011, 5:45 pm - IP Logged

                        "The popular Full Tilt Poker website illegally raided player accounts to fund operations and make lavish payments to its owners"

                        The Justice Department caused the problem when they closed down Full Tilt and confiscated millions of dollars from US banks. While it's true Full Tilt didn't have enough money to cover all their accounts, they never expected to be closed down or expected their US players to demand to be paid in full the money they had in their accounts all at the same time.

                        Full Tilt is a foreign based company and are subject to the laws in their jurisdiction. They and other foreign based poker companies continued to operate in the US after the online banking bill was passed in 2006 because the full force of the bill was extended. When the major sites were shut down in April to US players, at least two bills were on the tables in Congress to legalize online poker in the US.

                        In the US, it's common for Savings and Loan type banks and credit unions to loan out a large percentage of deposits and they too could not withstand a "run" on their banks if the majority or all of their depositors demanded to be paid in full; all in the same week. When many Wall Street companies were given their share of the 2008 $880 billion bailout money, several of them gave lavish bonuses to their CEOs, directors, and employees.  Despite public outcry, none of those activities were illegal.

                        "Over four years, the company used $444 million in player money to pay board members"

                        The board members were also investors and the amount in the player's accounts was probably close to $444 million on any given day. It's not unusual for companies to pay their CEOs outrageous salaries and give their board members stock options when their companies operate at a loss. For this to be a true Ponzi Scheme, Full Tilt would have to make little or no profit and 100% of payments to the board members would come straight out of the players account funds.