The online poker world in the United States was brought to a halt in April as PokerStars, Full Tilt Poker and Absolute Poker were charged with bank fraud, illegal gambling offenses and money laundering. On Tuesday, the Manhattan U.S. Attorney has motioned to amend the forfeiture and civil money laundering complaint to highlight that Full Tilt Poker and its board of directors operated the company as a “massive Ponzi scheme”.
The amended complaint explains that while FTP maintained player funds were safe, the company never actually had the represented cash on hand as a result of crediting users’ deposits without actually receiving the money. There was a shortfall of approximately $130 million as a result of that process.
The complaint further states that as of March 31, FTP owed players around the world $390 million, but only had $59 million on hand.
"As the proposed amended complaint describes in detail, Full Tilt was not a legitimate poker company, but a global Ponzi scheme," Manhattan U.S. Attorney Preet Bharara said in a statement. "As a result of our enforcement actions this alleged self-dealing scheme came to light. 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. As described, 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 with the company."
Additionally, the complaint assesses that the company used player funds to pay board members and other owners more than $440 million.
In addition to Ray Bitar, who was named in the initial complaint, three high-profile players were also named as board members in the DOJ’s press release: Howard Lederer, Chris Ferguson and Rafael “Rafe” Furst. According the U.S. Attorney’s Office, they’ve “restrained five accounts associated with those individuals.”
The complaint also maintains that the aforementioned board members are liable to the government “in an amount that is no less than $40,954,781.53 for Bitar; $41,856,010.92 million for Lederer; $25 million for Ferguson; and $11,706,323.96 million for Furst.”
In total, the four board members and estimated 19 additional owners of Tiltware, LLC received $443 million in distributions since April 2007.
The Alderney Gambling Control Commission suspended Full Tilt Poker’s license in June and a hearing was held Sept. 19 and 20 to discuss a possible reinstatement. Since that time, there has been no activity on the online poker site.