Breaking: DOJ Calls Full Tilt "Ponzi Scheme," Claims Owners Defrauded Players

Chris Ferguson
Ferguson: Reportedly allocated $87 million and paid out at least $25 million.

U.S. Attorney Preet Bharara filed a motion this morning to amend its civil complaint against Full Tilt Poker, claiming the owners defrauded players out of more than $300 million and calling Full Tilt a "global Ponzi scheme."

According to the Wall Street Journal, the amendment names Howard Lederer, Chris "Jesus" Ferguson, Rafe Furst and Ray Bitar as the principals in a scheme that paid out $444 million to themselves and the other owners of Full Tilt Poker at least partially through supposedly segregated player deposits.

"Full Tilt was not a legitimate poker company, but a global Ponzi scheme," said Bharara in the statement.

Bhahara also 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."

Further to the complaint, the DOJ is also seeking new penalties for each defendant totaling $41 million for Bitar, $42 million for Lederer, $25 million for Ferguson and $12 million for Furst, related to the percentage of their ownership in the company when the fraud was committed.

It is also asking for forfeiture of all funds paid to each individual from Full Tilt Poker.

From the amended complaint filed by Bhahara:

"The Amended Complaint alleges that one of the Poker Companies, 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.

"The Amended Complaint further alleges that, in or about the summer of 2010, Full Tilt Poker payment processing channels were so disrupted that the company faced increasing difficulty attempting to collect funds from players in the United States.

"Rather than disclose this fact, Full Tilt Poker simply credited players' online gambling accounts with money that had never actually been collected from the players' bank accounts. Full Tilt Poker allowed players to gamble with -- and lose to other players -- this phantom money that Full Tilt Poker never actually collected or possessed.

Rafael Furst
Rafe Furst: Added to the DOJ defendant list.
 

"When other players won these phantom funds, their accounts were credited with money that Full Tilt Poker did not actually possess, but now nevertheless owed to these players.

"As a result, Full Tilt Poker soon developed a massive shortfall between the money owed to United States players and the money actually collected from United States players, with Full Tilt Poker having credited approximately $130 million in phantom money to U.S. players online accounts that was never actually collected from players' bank accounts.

"Full Tilt Poker never disclosed this shortfall to the public.

"The Amended Complaint further alleges 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. As of the filing of this Amended Complaint, Full Tilt Poker still owes players over $300 million.

"The Amended Complaint alleges that, meanwhile, from approximately April 2007 until April 2011, Full Tilt Poker, and its Board of Directors, Bitar, Howard Lederer (“Lederer”), Christopher Ferguson, a/k/a “Jesus” (“Ferguson”), and Rafael Furst (“Furst”), all owners of Full Tilt Poker, 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."

No representatives for any of the parties could be reached for comment by the Wall Street Journal.

Full Tilt Poker is currently in the processs of completing its hearing with the Alderney Gambling Control Commission about the reinstatement of its operating license.

No statement has been released by either party regarding the proceeedings over the last two days in London.

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Hrdknocks 2011-10-25 07:31:58

Don't waste your time with a lawsuit. Why spend more money and get no satisfaction. This one will get settled old school. They will certainly get theirs one day, as you can't hide forever. They screwed a lot of people, and there's plenty that won't let that go unpunished. I have a feeling that some might end up in wheelchairs permanently.

Jason 2011-10-01 18:26:13

Now I know how that kid felt who said to Shoeless Joe Jackson..."Say It Ain't So Joe"

K DaSilva 2011-09-26 21:55:20

look me up on pokerstars for a game if like me u grinding the lower limits at $1.50 - 3.30. will grind there until ive built my bankroll to $250. this i hope to do in 2 wks playing 10 SNGs daily.
karlos112 is my game name and i play during the wk between 5 and 8 pm EST. its now 3pm here in jamaica.

Karl DaSilva 2011-09-26 21:49:40

i was doing so well on this site starting with US$50 and growing it to $700 in a few months. will i get this back.......dont think so. thank god for the little i had on pokerstars. grinding again.....aaaah. i really hope the same does not happen at pokerstars or im fucked. i really hope that the charges labelled against 'the professor' and 'jesus' ferguson are not true as ive always looked up to these pros.

cheers

whackedadoo 2011-09-23 02:57:13

Phil Gordon? Phil Ivey, any of the others on their posters? Where are they? Way to go folks. Good luck on getting online poker legal now.

SickCallChuck 2011-09-21 22:51:41

It is just so funny that these wannabe nice guys that think so much of them selves finally got screwed for what they really are,... a bunch of Criminals. Gladly i don't play on FullTilt as I smelled the RAT back in 07. Back in the day, these RAT's would of already have been buried 6 feet under somewhere in the Nevada Dessert. I miss the old days....

Derek 2011-09-21 19:00:11

Slim, I would say good luck in getting your money back, because I have called mine a loss awhile back.

slim 2011-09-21 07:31:21

Just wondering if anyone else out there has deposits still pending? All of my withdraws went through, but the echecks never came out of my bank. It's been over 7 months since they've debited my bank account. Any info would be of great help. Thank you.

tuba walk 2011-09-21 05:23:05

It's obvious these guys thought that the ban was going to be lifted and they tried to keep their concern afloat til then.
It's no different to what governments do all over the world.
And now the shit is hitting the fan economically, they are looking for scapegoats and/or sacrificial lambs.
I feel sorry for al involved, but a bunch of crazy congress critters who tacked a rider onto a bill started the whole shitfight-don't ever forget that!

Granville 2011-09-21 04:40:48

IAM going to sue these BASTARDS PERSONALY !! Indidually , They should been ban for anything Related to poker !! No fuckin wonder i could not get my WITHDRAW !!

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