Feeds

Prosecutor calls poker site 'global Ponzi scheme'

Full Tilt poker accused of defrauding players of $330m

Securing Web Applications Made Simple and Scalable

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.” ®

The smart choice: opportunity from uncertainty

More from The Register

next story
Mozilla fixes CRITICAL security holes in Firefox, urges v31 upgrade
Misc memory hazards 'could be exploited' - and guess what, one's a Javascript vuln
Manic malware Mayhem spreads through Linux, FreeBSD web servers
And how Google could cripple infection rate in a second
How long is too long to wait for a security fix?
Synology finally patches OpenSSL bugs in Trevor's NAS
Don't look, Snowden: Security biz chases Tails with zero-day flaws alert
Exodus vows not to sell secrets of whistleblower's favorite OS
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
prev story

Whitepapers

Top three mobile application threats
Prevent sensitive data leakage over insecure channels or stolen mobile devices.
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.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.