Feeds

Prosecutor calls poker site 'global Ponzi scheme'

Full Tilt poker accused of defrauding players of $330m

The essential guide to IT transformation

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.” ®

Next gen security for virtualised datacentres

More from The Register

next story
Snowden on NSA's MonsterMind TERROR: It may trigger cyberwar
Plus: Syria's internet going down? That was a US cock-up
Who needs hackers? 'Password1' opens a third of all biz doors
GPU-powered pen test yields more bad news about defences and passwords
e-Borders fiasco: Brits stung for £224m after US IT giant sues UK govt
Defeat to Raytheon branded 'catastrophic result'
Microsoft cries UNINSTALL in the wake of Blue Screens of Death™
Cache crash causes contained choloric calamity
Germany 'accidentally' snooped on John Kerry and Hillary Clinton
Dragnet surveillance picks up EVERYTHING, USA, m'kay?
Linux kernel devs made to finger their dongles before contributing code
Two-factor auth enabled for Kernel.org repositories
prev story

Whitepapers

5 things you didn’t know about cloud backup
IT departments are embracing cloud backup, but there’s a lot you need to know before choosing a service provider. Learn all the critical things you need to know.
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.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.
Rethinking backup and recovery in the modern data center
Combining intelligence, operational analytics, and automation to enable efficient, data-driven IT organizations using the HP ABR approach.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.