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FTP "A massive ponzi scheme" say US Federal Prosecutors

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As Full Tilt Poker has been fighting behind closed doors to have its gaming license reinstated by the Alderney Gambling Control Commission over in the UK it seems that matters across the pond have taken a considerable turn for the worse as Manhattan's US Attorney Preet Bhara has today claimed that Full Tilt Poker and its board of directors operated the company "as a massive Ponzi scheme against its own players".

As Forbes.com report;

"Bharara announced the filing of a motion to amend a forfeiture and civil money laundering complaint that was filed in April, alleging that Full Tilt and board members (Howard) Lederer, (Chris) Ferguson and Rafael Furst, together with Full Tilt CEO Ray Bitar, defrauded poker players out of some $300 million by not maintaining funds at the company sufficient to repay players"

It would appear that whilst Full Tilt maintained a facade of being a legitimate business with its players best interests at heart stating that "unlike some companies in our industry, we completely understand and accept that your account money belongs to you, not Full Tilt Poker" that in reality players money was being paid, in vast quantities to the board of directors and other owners of Full Tilt Poker. The amendment actually states that approximately $443,860,529.89 was paid to the board and owners from April of 2007 to April of 2011 with Federal Prosecutors claiming much of these funds have been transferred to accounts in Switzerland and other overseas locations.

The complaint specifies the 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."

The fact that despite paying themselves nearly $450 million over the past four years that not one penny has thus far been offered up from Full Tilts owners to repay the players from whom they are alleged to have "stolen" the money has left a bitter taste in the mouths of players across the world. At the time of writing Full Tilt Poker still owe players around the world around $300 million. As ever the 2+2 poker forums have gone into overdrive and the condemnation has been almost universal - you can view the ever expanding thread on the topic here

The "ponzi scheme" allegations refer to the shortfall of cash FTP had onhand when compared to the amount of money owed to its players. This has been caused not only by the massive payments made to the companies owners but also by the apparently deliberate funding of players accounts by Full Tilt when it was known that payment processors were not in place to actually take the deposited funds from the players involved. Full Tilt, it is alleged had relied on only a small percentage of its players withdrawing at any one time and that larger sums would continue to be deposited to Full Tilt in the meantime.

The situation certainly looks dire for Full Tilt Poker and the offering to any future investors is looking less attractive by the day.

Further reading on this topic can be found at;

Forbes.com

Subject Poker

ESPN

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