Full Tilt Poker busted--for bluffing players
Officials allege Full Tilt Poker to be a Ponzi scheme, players out $300 million.
On Tuesday, federal prosecutors accused the executives of Full Tilt Poker, an online poker site, of running a Ponzi scheme and stealing more than $440 million in gambler's winnings. They allege the stolen money was paid to board members and owners.
U.S. officials allege there's no money to back Full Tilt's virtual poker chips.
Full Tilt Poker claims on its website that the operation was legal and that they intend to repay all their customers. The statement insinuates that the U.S. government has overreached and that Full Tilt Poker money has been both seized and stolen, rendering the company unable to repay customers.
However, according to a statement made by prosecutors, Full Tilt Poker, it's board, along with Lederer and Ferguson, "defrauded players by misrepresenting that their funds on deposit in online gambling accounts were safe, secure, and available for withdrawal at any time... In reality, Full Tilt Poker did not maintain funds sufficient to repay all players, and in addition, the company used player funds to pay board members and other owners more than $440 million since April 2007."
Prosecutors intend to recover money from the scheme as well as imprison those convicted for money laundering.
"Full Tilt was not a legitimate poker company, but a global Ponzi scheme. 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 press release said.
Federal prosecutors say that as of March 31, Full Tilt Poker owed about $390 million to players around the world, with at least $150 million due to U.S. players. Unfortunately, the company only had about $60 million on hand to pay with, of which one-tenth, $6 million, was readily available to pay out customers.
While the company was allegedly keeping a minimum of cash on-hand, it was paying out over $443 million to its owners and directors. The company even says that it still owes its own poker star, Ferguson, about $62 million.
Most of the money paid into the site was transferred to Swiss and overseas bank accounts where it may never be recovered.
In an effort to deceive customers, Full Tilt "credited" player's accounts, but did not warn them that it was unable to pay out those accounts if such payments were demanded.
In addition to Full Tilt, another site, Poker Stars, has also had its domain seized by the U.S. District Attorney. U.S. residents are still free to play on the Poker Stars website, but only for play money. They may cash out any real money they previously had on deposit with the website.
As of Tuesday evening, attorneys for Full Tilt, Lederer, and Ferguson were still yet to issue any statements to the media.
It is uncertain if players will ever get their money back.
© 2011, Catholic Online. Distributed by NEWS CONSORTIUM.
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Keywords: Full Tilt Poker, Ponzi scheme, online gambling
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