US Attorney dubs Full Tilt Poker Ponzi Scheme

Posted by Steve Ruddock on Sep 20, 2011 Posted in Legal Poker News, Online Poker News | No Comments »

full tilt ponziAs principles from Full Tilt poker are busy meeting with the Aldernay Gambling Control Commission over in London regarding their currently suspended license, the principle owners of the company are finding themselves in some potentially serious legal troubles back in the United States. On Tuesday US Attorney Preet Bahrara announced he would be seeking an amendment to their original complaint which was unsealed on April 15, 2011.

The amendment sought by Bharara calls Full Tilt poker nothing but a “Global Ponzi Scheme” citing the fact that “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,”

The Amended Complaint alleges a number of fraudulent activities by Full Tilt Poker, and states by name Howard Lederer, Chris Ferguson, Rafe Furst, and Ray Bitar. Here are some of the juicier passages from the amended complaint:

Alleged E-Mails sent to players in 2008 stated “To protect both our players and business from financial problems, all player account funds are segregated and held separately from our operating accounts. Unlike some companies in our industry, we completely understand and accept that your account money belongs to you, not Full Tilt Poker.”

Another tantalizing excerpt is the obscene amounts stated to have been paid to the four principles named in the amendment: “2007 and April 2011, Full Tilt Poker and its Board distributed approximately$443,860,529.89 to Board members and owners. Bitar received approximately $41 million, Lederer received approximately $42million, and Furst received approximately $11.7 million. Ferguson was allocated approximately $87,486,182.87 in distributions, and received at least $25 million, with the remaining balance characterized as “owed” to him. Much of the money that was distributed was transferred by the Board members and owners to accounts in Switzerland and other overseas locations.”

The amended complaint also touches on the matter first brought to light by, “Beginning in August2010, Full Tilt Poker’s payment processing network in the United States was so disrupted that the company often could not withdraw-2-money from U.S. players’ bank accounts in order to fund credits to their online gambling accounts. In order to maintain its false image of financial security, Full Tilt continued to credit player accounts without disclosing its inability to fund those credits. Ultimately, the company credited approximately $130million to players’ online gambling accounts that it never actually withdrew from their bank accounts. When players gambled with these phantom funds and lost to other players, a massive shortfall developed.”

All in all, the news is not looking very good for Full Tilt Poker and even more so Howard Lederer, Chris Ferguson, Rafe Furst, and Ray Bitar.

You can read the entire amended complaint at the following link

Stay tuned for more details as they eege.

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