User ID
Password
  Forgot User ID
or Register Today!
VegasInsider.com
Follow Us on Facebook Follow Us on Twitter Follow Us on Google+ VI Mobile Scores and Betting Odds
Home
NFL
NBA
NHL
MLB
NCAA FB
NCAA BK
Golf
Auto Racing
Horses
More
Betting Tools

 
Feds: Full Tilt Poker site was Ponzi scheme

New Sportsbook.ag customers: Make your 1st bet, get your 2nd bet free, 100%, winnings paid in cash.
Join Now

Already have an account? Click here to view new Exclusive Rewards!

NEW YORK (AP) - An Internet poker company that was blocked from operating in the U.S. in the spring as part of an online gambling crackdown was ``not a legitimate poker company, but a global Ponzi scheme,'' federal prosecutors said Tuesday.

Advertisement
The popular Full Tilt Poker website illegally raided player accounts to fund operations and make lavish payments to its owners, Justice Department lawyers said in a revised civil lawsuit filed in New York.

Over four years, the company used $444 million in player money to pay board members, including well-known professional poker players Christopher Ferguson and Howard Lederer, investigators said.

The poker site had promised players that their accounts were protected and wouldn't be touched. But authorities say that, as of March, the company had only $60 million left in its bank accounts to cover the $390 million it owed to players. It routinely mingled player money with its own finances, and took cash from some customers to pay out winnings due to others, prosecutors said.

``Full Tilt was not a legitimate poker company, but a global Ponzi scheme,'' U.S. Attorney Preet Bharara said in a statement. ``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.''

A lawyer for the site, Barry Boss, was traveling Tuesday and not immediately available for comment. The Associated Press could not immediately locate Ferguson, Lederer or their representatives for comment.

Federal authorities initially sued Full Tilt Poker in April as part of a broad crackdown on the most popular online poker sites in the U.S. They also filed criminal charges against the company's two top executives, Nelson Burtnick and Raymond Bitar.

Those charges are pending, and the men are still being sought by authorities. Previously, they have issued statements through a publicist condemning the charges as unfounded.

Executives at two other sites, PokerStars and Absolute Poker, also face charges and civil suits seeking millions of dollars in gambling proceeds.

U.S. lawmakers made it a crime to accept money in connection with unlawful gambling in 2006, but some big card-playing sites continued to operate anyway, saying their off-shore status or methods of processing payments put them outside the law's reach.

Many of the companies did business by having gamblers deposit money in special online accounts. Those accounts were then used to pay losses and receive winnings.

In its revised lawsuit against Full Tilt, Justice Department lawyers said that even though the company had assured players that those accounts ``are segregated and held separately from our operating accounts,'' they were actually drained regularly for other purposes, including paying the company's owners and board members.

Bitar got $41 million and Lederer got $42 million, the lawsuit said. Ferguson was supposed to get $87.5 million, although he may have only received $25 million of that amount so far, federal prosecutors claimed.

AP NEWS
The Associated Press News Service

Copyright 2014
The Associated Press
All Rights Reserved

  
HEADLINES
Olson: 2014 WSOP Final Table
WSOP reaches 9 finalists in Vegas
2014 WSOP guaranteed new champ
Olson: 2014 WSOP Event Recaps 46-64
WSOP main event on; $10M prize
SCOTUS rebuffs NJ sports betting
Olson: 2014 WSOP Event Recaps 16-30
Olson: 2014 WSOP Event Recaps 1-15
NJ: Sports betting restricts rights
MORE HEADLINES
 
Morning Line Report
 
VegasInsider.com Gold Membership
  
corner graphic
With a VI Gold Membership, you can SAVE 10% off a Live Odds subscription, SAVE 20% off Daily Pick packages, and receive access to up to 1,000 Member Plays each month!