U.S. Attorney in Manhattan Preet Bharara didn’t mince words yesterday when he called out former online poker giant Full Tilt Poker.
In a statement, Bharara said that “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.”
Federal prosecutors are now charging the major players with a new civil money laundering complaint that alleges Full Tilt Poker used online poker players’ money to pay its board of directors. That would include famous poker stars Howard Lederer and “Jesus” Ferguson. The alleged fraudulent payoff is claimed to be $440 million over the last 4 years.
Here’s how the poker world is responding on Twitter –
Bad day for poker FTP Tilt boys and Howardhlederer
Poker star Daniel Negreanu commented on the situation indirectly, responded to a tweet from a fan that read “Wonder if I have better odds of getting a RT from @RealKidPoker or seeing my money from Full Tilt? #LOL” with this –
@PunisherOnTilt this should answer your question…
Just a week after the initial Black Friday events that shut down on Full Tilt, Absolute, and PokerStars, the DOJ reached domain agreements that allowed the sites to begin using them again to process payments to players.
The first to slowly begin to process payouts was PokerStars, who began payments near the end of April.
From the get-go, Full Tilt Poker players have complained about how the company handled the whole situation. It wasn’t until nearly a month after Black Friday that they contacted users about cashouts. In June, Phil Ivey famously announced that suing Full Tilt and boycotting the World Series of Poker on behalf of all the players who had yet to receive their money.
At the end of August, Full Tilt released a statement about its inability to pay back its players, blaming the U.S. government’s original indictment and cash seizures for the hold-up. They also claimed a “massive theft perpetrated by one of its payment processors.”
And now, this new Ponzi scheme accusation hits. Federal prosecutors have amended the original complaints to include Lederer, Ferguson, and CEO Ray Bitar. Apparently, Full Tilt payed off its board members with player funds while keeping miniscule amounts of funds in the bank. From Forbes –
Federal prosecutors claim that Full Tilt’s board members got rich because the company used player funds to pay them massive amounts of money that largely was transferred to their accounts in Switzerland and other overseas locations. Specifically, the feds allege that Bitar pocketed $41 million and Lederer got $42 million. Jesus Ferguson allegedly was allocated $87 million in distributions and received at least $25 million, federal prosecutors claim. Another owner, described by the feds as a professional poker player, received at least $40 million in distributions, as well as millions of dollars more characterized as loans from Full Tilt that have only been partially repaid. The government claims Full Tilt continued to make payments to its owners of up to $10 million per month even after the company was insolvent.
The indictment alleges that soon after April’s original crackdown, Lederer told others at Full Tilt that the company only had $6 million.
Sadly, with legislation ramping up for the legalization of online poker, all this news does is hurt the game.