Feeds

Prosecutor calls poker site 'global Ponzi scheme'

Full Tilt poker accused of defrauding players of $330m

Using blade systems to cut costs and sharpen efficiencies

Directors of one of the internet's biggest gambling sites have been accused of running a massive Ponzi scheme that bilked players out of about $330 million.

In court documents filed Tuesday, federal prosecutors accused those operating Full Tilt Poker of withdrawing more than $443 million from players' bank accounts and diverting it to board members and owners. Director Christopher Ferguson received more than $87 million, while his colleague Howard Lederer got $42 million, they said. Directors Raymond Bitar and Rafael Furst allegedly received $41 million and $11.7 million respectively.

In all, Full Tilt allegedly owed players around the world $390 million, but had only $60 million in its bank accounts, despite repeated assurance that money they deposited for online betting was stored in segregated accounts and belonged to each individual player.

“Full Tilt was not a legitimate poker company, but a global Ponzi scheme,” Preet Bharara US Attorney for New York's Southern District, said in a press release (PDF). “Not only did the firm orchestrate a massive fraud against the US banking system, as previously alleged, Full Tilt also cheated and abused its own players to the tune of hundreds of millions of dollars.”

Tuesday's allegations were contained in court filing that amended a civil complaint filed in April against operators of Full Tilt and two other online poker sites. The earlier action charged them with violating the Unlawful Internet Gambling Enforcement Act of 2006, which prohibits illicit gambling operations from accepting payments. The site was shut down in June.

The new allegations surfaced in the course of the investigation. In some cases, the alleged scheme continued even after the original complaint and an accompanying criminal indictment were unsealed. Prosecutors cited email sent in June in which Bitar worried about a “run on the bank” and admitted “at this point we can't even take a five million [dollar] run.” ®

Boost IT visibility and business value

More from The Register

next story
Secure microkernel that uses maths to be 'bug free' goes open source
Hacker-repelling, drone-protecting code will soon be yours to tweak as you see fit
How long is too long to wait for a security fix?
Synology finally patches OpenSSL bugs in Trevor's NAS
Roll out the welcome mat to hackers and crackers
Security chap pens guide to bug bounty programs that won't fail like Yahoo!'s
HIDDEN packet sniffer spy tech in MILLIONS of iPhones, iPads – expert
Don't panic though – Apple's backdoor is not wide open to all, guru tells us
Researcher sat on critical IE bugs for THREE YEARS
VUPEN waited for Pwn2Own cash while IE's sandbox leaked
Four fake Google haxbots hit YOUR WEBSITE every day
Goog the perfect ruse to slip into SEO orfice
Putin: Crack Tor for me and I'll make you a MILLIONAIRE
Russian Interior Ministry offers big pile o' roubles for busting pro-privacy browser
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Securing Web Applications Made Simple and Scalable
Learn how automated security testing can provide a simple and scalable way to protect your web applications.