Feds accuse Full Tilt Poker of being Ponzi scheme

[SlyPokerDog]

The Justice Department is accusing Full Tilt Poker of being a Ponzi scheme that has defrauded players out of more than $300 million. The civil lawsuit names celebrity players and co-owners Christopher Ferguson and Howard Lederer and other executives of the online site.The Wall Street Journal writes that the government's amended complaint alleges Full Tilt "misrepresented to the website's players that the money the company was supposed to be holding in player accounts was safely held when it was actually being used for other purposes, including payments to owners."

"Full Tilt was not a legitimate poker company, but a global Ponzi scheme," U.S. Attorney Preet Bharara said in a statement. He alleged that 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."

The complaint states:

According to a balance sheet prepared by Full Tilt Poker, as of March 31, 2011, Full Tilt Poker owed players from around the world over approximately $390,695,788 but had only approximately $59,579,413 in its bank accounts. Full Tilt Poker relied on new deposits from players to ensure its ability to fund withdrawals to players' accounts.
Rather than protect player funds as promised, Full Tilt Poker distributed hundreds of millions of dollars to its owners…

Defendant Lederer personally received at least approximately $42 million, including approximately $37,856,010.92 in ownership distributions and at least $4 million in "profit sharing" payments…

Defendant Ferguson was allocated approximately $85,161,305.88 in distributions. Tiltware records reflect that approximately $25 million of this sum was actually transferred to Ferguson's personal accounts, with the remaining balance characterized as "owed" to Ferguson.
​

No comment so far from Full Tilt, Ferguson or Lederer.


http://content.usatoday.com/communi...tilt-poker-of-being-ponzi-scheme/1?csp=34news

 

[PapaG]

Only $300 million? That's pocket lint compared to what the government is doing with the money they involuntarily confiscate from us.

 

[Haakzilla]

Only $300 million? That's pocket lint compared to what the government is doing with the money they involuntarily confiscate from us.

...precisely! If Full Tilt is a Ponzi Scheme, then what is the Federal Reserve?

 

[jlprk]

I always played not for money. I never deposited any money with them. That's how most people played, gambling fake dollars/credits that the site allocated for free, and it was a lot of fun. It was a free service unless you wanted to deposit real dollars, and I'll miss it. I could phone someone at his house and say, let's play, and we'd both join the same online poker table and play as long as we wanted for free, even though we were miles apart at our own homes.

Government auditors always look like asses when hired to actually run, instead of nitpick, an accounting department. Let's go through the press release. My comments in caps.
---------------
According to a balance sheet prepared by Full Tilt Poker, as of March 31, 2011, Full Tilt Poker owed players from around the world over approximately $390,695,788 but had only approximately $59,579,413 in its bank accounts. SO THEY SPENT $330M. ON WHAT? Full Tilt Poker relied on new deposits from players to ensure its ability to fund withdrawals to players' accounts. Rather than protect player funds as promised, Full Tilt Poker distributed hundreds of millions of dollars to its owners… WAS THIS LEGAL TRUST PROMISED IN THE TERMS OF SERVICE OR IS THE TRUST RELATIONSHIP JUST IMPUTED BY THE GOVERNMENT? ARE PAYING USERS PERFECTLY HAPPY TO LOSE A HUNDRED BUCKS IN EXCHANGE FOR HUNDREDS OF HOURS OF ENTERTAINMENT?

Defendant Lederer personally received at least approximately $42 million, including approximately $37,856,010.92 in ownership distributions and at least $4 million in "profit sharing" payments… SO HE WAS PAID $42M.

Defendant Ferguson was allocated approximately $85,161,305.88 in distributions. Tiltware records reflect that approximately $25 million of this sum was actually transferred to Ferguson's personal accounts, with the remaining balance characterized as "owed" to Ferguson. SO HE WAS PAID $25M, NOT $85M. HOW WAS THE REMAINING $263M (330 - 42 - 25) SPENT? IS MUCH OF IT STILL THERE IN COMPANY ASSETS, AND IS THIS OVERBLOWN? WILL MONEY THAT WILL NOW GO TO LAWYERS EXCEED WHATEVER TINY GOOD IS ACCOMPLISHED, AS USUAL? OFTEN THE LAWYERS ARE PAID 10 TIMES AS MUCH AS WHATEVER OVERSPENDING THEY FIND. DID THE DEFENDENTS KNOW THEY SUPPOSEDLY HAD A LEGAL TRUST OBLIGATION, AND WERE THEY MANAGING THE MONEY JUST FINE BEFORE THIS WINDFALL FOR LAWYERS WAS DISCOVERED?

 

[huevonkiller]

Only $300 million? That's pocket lint compared to what the government is doing with the money they involuntarily confiscate from us.

Sadly true, lol.