From the amended complaint against online poker outfit, Full Tilt Poker, wherein the Feds call FTP a “global ponzi”. Strong stuff.
5. As described more fully below, one of the PokerCompanies, Full Tilt Poker, not only engaged in the operation ofan unlawful gambling business, bank fraud, wire fraud, and moneylaundering as alleged in the Complaint, but also defrauded itspoker players by misrepresenting to players that funds depositedinto their online player accounts were secure and segregated fromoperating funds, while at the same time using player funds to payout hundreds of millions of dollars to Full Tilt Poker owners.Full Tilt Poker was able to accomplish this massive fraud, inpart, because it illegally conducted business in the UnitedStates but maintained its personnel, operations, assets, andaccounts principally overseas.
6. As described more fully below, in or about thesummer of 2010, Full Tilt Poker’s 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. FullTilt Poker allowed players to gamble with — and lose to other players — this phantom money that Full Tilt Poker never actually collected or possessed. When other players won these phantomfunds, 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.
7. As of March 31, 2011, Full Tilt Poker owedapproximately $390 million to players around the world, includingapproximately $150 million owed to players in the United States.At that time Full Tilt Poker had only approximately $60 millionon deposit in its bank accounts. As of the filing of this Amended Complaint, Full Tilt Poker still owes players over $300million.
8. Meanwhile, from approximately April 2007 untilApril 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 TiltPoker, distributed approximately $443,860,529.89 to themselves and other owners of the company. Payments to the Full Tilt Pokerowners stopped only after April 15, 2011.
105. Full Tilt Poker’s repeated representations that(1) player funds were held separately from operating accounts,(2) player funds were “safe” and “available,” and (3) it did notallow play on credit but instead allowed play only with “cleared”funds were, in reality, lies. In truth and in fact, Full TiltPoker provided no protection whatsoever to deposits it receivedfrom players in the United States and other countries, and simplyused the funds it claimed it was holding on account for itsplayers to cover business expenses and to pay hundreds of millionsof dollars in distributions to professional poker playersaffiliated with Full Tilt Poker and others who owned interests inTiltware LLC. As a result, according to a balance sheet preparedby Full Tilt Poker, as of March 31, 2011, Full Tilt Poker owed players from around the world over approximately $390,695,788 buthad only approximately $59,579,413 in its bank accounts. FullTilt Poker relied on new deposits from players to ensure itsability to fund withdrawals to players’ accounts.
106. Rather than protect player funds as promised, FullTilt Poker distributed hundreds of millions of dollars to its owners.