On a day that many had hoped would yield information regarding Full Tilt Poker’s hearing with their gaming license agency, Alderney Gambling Control Commission (AGCC), the U.S. Department of Justice accused Full Tilt Poker of running a “global Ponzi scheme”.
According to the Wall Street Journal, “The U.S. Attorney in the Southern District of New York filed a motion Tuesday to amend an earlier civil complaint to allege that Mr. Ferguson, Mr. Lederer and two other directors for the website, Full Tilt Poker, operated what the Justice Department says was a Ponzi scheme that allowed the company to pay out $444 million to themselves and other owners, which included other famous poker players.”
Subject: Poker states that the two other directors in question are Rafe Furst and Ray Bitar.
The government alleges in their complaint that the company misrepresented to players that their funds were being held safely when in actuality they were being distributed to owners as profits. “Full Tilt was not a legitimate poker company, but a global Ponzi scheme,” said Preet Bharara, U.S. Attorney for the Southern District, in a statement.
A memorandum summarizing the DOJ’s amendment states that Full Tilt’s Board of Directors, allegedly Ray Bitar, Howard Lederer, Chris Ferguson, and Rafe Furst, paid to themselves and other owners “approximately $443,860,529.89″ from April of 2007 to April of 2011.
In the statement, Mr. Bharara said Full Tilt “cheated and abused its own players to the tune of hundreds of millions of dollars” and that “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.”
One way in which this update is significant is that, before today, Howard Lederer and Chris Ferguson were not officially in question by the government. The original Black Friday indictment listed only Ray Bitar and Nelson Burtnick from the Full Tilt camp.
The amended civil complaint states that Howard Lederer received $42 million from the Full Tilt “Ponzi scheme” and that Ferguson, Bitar, and Furst received $85 million, $41 million, and $12 million, respectively. The document states that another 19 owners received the remainder of the $443 million that was distributed including one owner (Phil Ivey?) who received $40 million as well as millions more characterized as loans from Full Tilt. Approximately $4.4 million of these loans remain unpaid.
The complaint also states that, “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.”
Also featured in the complaint is an email dated June 12th, 2011 from Ray Bitar in which he expresses concern over an announcement of company layoffs saying that it could cause a “new run on the bank” and that “we can’t even take a five million run”.