Online Poker Site Running Ponzi Scheme, DOJ Says
EmailOnline gambling site Full Tilt Poker, shut down in April by federal authorities, was running a $440 million Ponzi scheme, the Justice Department announced today, filing new charges against the directors of the company.
“Full Tilt was not a legitimate poker company, but a global Ponzi scheme,” Preet Bharara, the U.S. Attorney for the Southern District of New York, said in a statement.
The site told players their gambling accounts were secure and available for withdrawal at any time when in fact, “Full Tilt Poker did not maintain funds sufficient to repay all players,” Bharara said. The operation allegedly used player funds to pay board members and other owners more than $440 million since April 2007.
The complaint names board members Raymond Bitar, Howard Lederer, Christopher Ferguson and Rafael Furst as defendants. Calls to Full Tilt Poker seeking comment were not immediately returned.
“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,” according to the DOJ statement.
On April 15, 2011, the Justice Department filed a complaint for money laundering, fraud, and violating the 2006 Unlawful Internet Gambling Enforcement Act against 11 individuals who ran PokerStars, Full Tilt Poker and Absolute Poker.
The Justice Department’s shutdown of online poker sites has affected millions of poker players and the poker industry.
In June, Phil Ivey, one of the world’s best poker players, announced he was suing his sponsor, Full Tilt, in June for $150 million and boycotted this year’s World Series of Poker (WSOP).
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Earlier this morning in a press conference with President Obama, the potus appointed Howard Lederer and Christopher Ferguson as co-chief administrators of the Social Security department. The president was quoted saying, “If these guys can skim $440 million from mere poker, just think what they can do for the American people”. Additionally, they were both described as “uniquely qualified” for the positions. When asked for comment, Lederer said, “…that’s a petty good flop!” Ferguson also stated that “With Geithner and Bernanke, it feels like a homecoming. This is truly the American Dream.”
Posted by: Bryan | September 20, 2011, 7:41 pm 7:41 pm
I alway thought Full Tilt Poker was one of the more honest online poker sites. Now it looks like a Ponzi scheme. Plus Ultimate Bet Poker had cheating issues. It just proves that online poker is not safe. How much cheating is there that never gets caught? Online poker in it’s current unregulated state is unsafe.
Posted by: Headshots Los Angeles | September 21, 2011, 1:55 pm 1:55 pm
This is John from the American Gaming Association. We just released an Online Poker Code of Conduct with measures that would help prevent alleged schemes like this one. It’s our belief that the best way to protect American consumers is to give them access to licensed and regulated American sites. Check out our YouTube video “Online Poker: The Wild West” for more information on government action or visit our website for the full Code of Conduct.
Posted by: John | September 22, 2011, 1:15 pm 1:15 pm
The DOJ should be concentrating on Goldman Sachs, Fannie Mae, Freddie MAC, etc. I thought USA was a free country? Yet, the government is telling me what I can or can’t do. Doesn’t sound free to me. Does that sound like a free country to you? But, there’s some great news the DOJ did for some professional poker players. Per their words as they quoted IRS definition of a ponzi scheme, they have pronounced poker playing as an investment, which makes sense. I’m investing a certain dollar value looking for a ROI (return on investment). Great! That means the profit I make is investment funds and not subject to the self employment tax, currently at 15.3%. I thank the DOJ for this. Thanks again DOJ!
Posted by: rick T | September 22, 2011, 2:05 pm 2:05 pm