US Government Calls Online Poker Site Ponzi Scheme
September 21, 2011

US Government Calls Online Poker Site Ponzi Scheme


The US government claims that Full Tilt, an online gambling site based in Dublin, Ireland, is a ponzi scheme. The government claims the sites board of directors used player´s funds to enrich themselves to the tune of $440 million dollars between April 2007 and April 2011.

Raymond Bitar and 11 other defendants were named in an indictment seeking $3 billion dollars in penalties and alleging crimes including illegal gambling, money laundering and bank fraud, according to the Telegraph.

Preet Bharara, the US Attorney in Manhattan, NY told Reuters, “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. Full Tilt was not a legitimate poker company, but a global Ponzi scheme.”

The prosecutors claim that Full Tilt´s board of directors defrauded players by misrepresenting that their funds in accounts were safe, secure and available for withdrawal, according to Reuters. The complaint cites emails where the directors continuously assured players their money was safe.

One email partially read, “To protect both our players and business from financial problems, all player account funds are segregated and held separately from our operating accounts. Unlike some companies in our industry, we completely understand and accept that your account money belongs to you, not Full Tilt Poker.” The US government is challenging this assertion, saying the company did not have money to repay its players.

Defendants, though, claim they had a legitimate business plan. Melinda Saraga, a New York criminal-defense lawyer who has worked on other online gambling cases told Bloomberg, “It´s fundamentally unfair to call this a Ponzi Scheme. This was a poker business that had a legitimate business model but ran into processing disruptions. It´s not clear to me that this was an intentional plan to defraud customers and line pockets. We only have half the story.”

The name of the civil case is US v PokerStars, 11-cv-02564 and the name of the criminal case is US v Tzvetkoff, 10-cr-00336, US District Court, Southern District of New York (Manhattan).


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