URGENT >> BULLETIN >> MOVING: Full Tilt Poker Was ‘Global Ponzi Scheme’ That Gathered ‘Hundreds Of Millions Of Dollars,’ Feds Say

URGENT >> BULLETIN >> MOVING: Federal prosecutors in New York say that Full Tilt Poker was a “global Ponzi scheme” that raked in “hundreds of millions of dollars” — while defrauding players and lining the pockets of insiders who used offshore bank accounts.

Snippet from an amended complaint filed in the Southern District of New York today:

“Full Tilt Poker . . .  not only engaged in the operation of an unlawful gambling business, bank fraud, wire fraud, and money laundering as alleged in the Complaint, but also defrauded its poker players by misrepresenting to players that funds deposited into their online player accounts were secure and segregated from operating funds, while at the same time using player funds to pay out hundreds of millions of dollars to Full Tilt Poker owners. Full Tilt Poker was able to accomplish this massive fraud, in part, because it illegally conducted business in the United
States but maintained its personnel, operations, assets, and accounts principally overseas.”

Full Tilt’s lawlessness affected the U.S. financial infrastructure and poker players alike, U.S. Attorney Preet Bharara of the Southern District of New York said.

“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,” Bharara said.  “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.”

This snippet from the complaint alleges that Full Tilt owed $390 million to players globally, but had only $60 million on deposit in bank accounts — and that the operators enriched themselves for years prior to law-enforcement  intervention earlier this year.

“As of March 31, 2011, Full Tilt Poker owed approximately $390 million to players around the world, including approximately $150 million owed to players in the United States. At that time Full Tilt Poker had only approximately $60 million on deposit in its bank accounts. As of the filing of this
Amended Complaint, Full Tilt Poker still owes players over $300 million.”

Between April 2007 and April 2011, Full Tilt Poker and directors Raymond  Bitar, Howard Lederer,  Christopher “Jesus” Ferguson  and Rafael Furst “distributed approximately $443,860,529.89 to themselves and other owners of the company. Payments to the Full Tilt Poker owners stopped only after April 15, 2011,” according to the complaint.

Bitar received approximately $41 million, prosecutors said. Lederer, meanwhile,  received about $42 million, and Furst about  $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,” prosecutors said. “Much of the money that was distributed was transferred by the Board members and owners to accounts in Switzerland and other overseas locations.”