Online Poker fraud for Full Tilt

[EasternOHBillsFan]

This is the nuclear bomb of stories for online poker... the names involved are individuals that APPEARED to be genuinely good people and great representatives of professional poker. Now, they appear to be criminals and guilty of massive theft. I am totally shocked being a big poker fan... this is unbelievable! Madoff, OK, but Howard Lederer? Jesus Ferguson???? What is next???

 

http://money.cnn.com/2011/09/20/news/companies/poker_ponzi/index.htm

 

"The U.S. Attorney's Office for the Southern District of New York also charged poker celebrities Howard Lederer and Christopher Ferguson of taking part in and profiting from the scams.

 

According to the complaint from U.S. Attorney Preet Bharara, Full Tilt Poker and its board, including 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," the complaint read."

Edited September 20, 2011 by BmoreBills

[KD in CA]

I'm not at all surprised if there was funny business going on at these companies, but absent any real information on the situation I'll make two points:

 

First, it's kinda hard to keep players' funds safe and secure when the US government is doing everything in its power to shut down these companies, arrest their executives and seize their assets.

 

Second, I don't see what the big deal is about funding operations from player deposits for an ongoing business. Obviously they should have maintained a healthy ratio of cash to player debt, but that by itself is not at all unusual or shady IMO.

 

 

 

p.s. IMO, the nuclear bomb for online poker was the revelation that games were rigged.

Edited September 20, 2011 by KD in CT

[BiggieScooby]

Wow, online gambling website owners turn out to be running a ponzi scheme? These "upstanding job creators" must be another victim of Obama's backed DOJ witch hunt.

[San Jose Bills Fan]

I'm not at all surprised if there was funny business going on at these companies, but absent any real information on the situation I'll make two points:

 

First, it's kinda hard to keep players' funds safe and secure when the US government is doing everything in its power to shut down these companies, arrest their executives and seize their assets.

 

Second, I don't see what the big deal is about funding operations from player deposits for an ongoing business. Obviously they should have maintained a healthy ratio of cash to player debt, but that by itself is not at all unusual or shady IMO.

 

p.s. IMO, the nuclear bomb for online poker was the revelation that games were rigged.

The only "information" we have are the public allegations. Do you consider these "trumped up charges?"

 

Did you read the article?

"The company paid $25 million to Ferguson, and said that it owed him another $62 million, according to the prosecutor's office, noting that much of the money was transferred to Swiss and overseas accounts. Full Tilt paid more than $443 million in player funds to the board of directors and other owners, with $41 million going to Bitar, $42 million going to Lederer, and nearly $12 million going to another board member, Rafael Furst… In order to maintain its false image of financial security, Full Tilt continued to credit player accounts without disclosing its inability to fund those credits," the prosecutor said."When players gambled with these phantom funds and lost to other players, a massive shortfall developed."

The prosecutor said "this scheme continued even after the original complaint was filed and the criminal indictment unsealed in April."

As time went on, the poker site had even less money to pay its customers. By June, Full Tilt owed $300 million to players around the world but only had $6 million to pay them, according to the prosecutor's office."

 

 

[KD in CA]

The only "information" we have are the public allegations. Do you consider these "trumped up charges?"

 

What part of:

I'm not at all surprised if there was funny business going on at these companies...

do you not comprehend?

 

 

So sorry for not jumping to conclusions fast enough for you. Obviously we should believe every word the government tells us about an industry they've been trying to shut down for years.

Edited October 4, 2011 by KD in CT

[San Jose Bills Fan]

I don't see what the big deal is about funding operations from player deposits for an ongoing business. Obviously they should have maintained a healthy ratio of cash to player debt, but that by itself is not at all unusual or shady IMO.

This was the part (bolded above) I was a bit disturbed by.

 

I don't think there would be public disclosure of the numbers to this extent unless there was some credence to them.

 

Full Tilt owed $300 million and only had $6 million to pay out. That's a ratio of 50:1. They were looking for investors to pay off money that they owed, at the same time paying directors $100s of millions.

 

Then all the allegations about Swiss bank accounts and money laundering… the sums paid out to Directors… do you think these were fabricated facts?

 

And if not, I don't see how you could write what you did. I guess maybe you were speaking in broad generalities… and not speaking to this case?

 

That's all.