Full Tilt Poker, once the second largest online poker room in the world, released another statement Monday to address last week’s assertion by the United States Attorney for the Southern District of New York that the online poker room was a “Ponzi scheme.” In reality, the statement, issued through PokerStrategy.com, was simply a regurgitation of the definition of the headline-grabbing phrase.
The statement, in its entirety:
“Full Tilt Poker is not a Ponzi Scheme
“On September 19, 2011, the Department of Justice issued a release stating that Full Tilt Poker was ‘A Global Ponzi Scheme.’ While the government has taken issue with the underlying activities of FTP, under any reasonable interpretation, there is no way to characterize the operation of Full Tilt Poker’s virtual online card room as a global Ponzi scheme.
“A ‘Ponzi’ scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi schemes do not involve any legitimate investment, but rather use the new investor funds to pay ‘dividends’ to the initial investors.
“Despite recent events, FTP remains committed to identifying a suitable investor and paying back its players in full.”
The “Ponzi” comment was made by United States Attorney Preet Bharara in a press release last Monday when it was announced that a motion had been filed to amend the Black Friday civil complaint against Full Tilt, PokerStars, Absolute Poker, and payment processors to include Full Tilt’s Howard Lederer, Chris Ferguson, and Rafe Furst. The amended complaint alleges that the trio received a combined almost $79 million in distributions from the company (Ferguson was also promised over $62 million more), money which was taken from player accounts, rather than Full Tilt’s operating funds. All told, Full Tilt’s Board and owners allegedly took over $443 million from customers.
In the press release, Bharara said:
“As the proposed Amended Complaint describes in detail, Full Tilt was not a legitimate poker company, but a global Ponzi scheme. As a result of our enforcement actions this alleged self-dealing scheme came to light. Not only did the firm orchestrate a massive fraud against the U.S. banking system, as previously alleged, Full Tilt also cheated and abused its own players to the tune of hundreds of millions of dollars. As described, 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.”
A warrant has also been issued for the seizure of all “funds and other property” in bank accounts in the names of Lederer, Ferguson, and Full Tilt founder Raymond Bitar, and one in the name of HH Lederer Consulting LLC. The seizure of an account in the name of Telamonian Ajax Trust, which is known to be linked to Furst, is also authorized, along with all funds traceable to it.
