U.S. Prosecutor Calls Online Poker Site a ‘Global Ponzi Scheme’

September 21, 2011

U.S. Prosecutor Calls Online Poker Site a ‘Global Ponzi Scheme’

Poker playing legends, Christopher Ferguson and Howard Lederer have been accused of bilking fellow players out of hundreds of millions (U.S.) through their company Full Tilt Poker, the second largest online poker company in the world

Full Tilt paid its board members more than $440 million using funds it had told its online poker players would be available to them for withdrawal at any time, U.S. prosecutors said. FBI investigators claim to have found that by the end of March Full Tilt owed about $390 million to players around the world but had only $60 million in its bank accounts.

Court filings released on Tuesday, allege Full Tilt’s owners repeatedly reassured online players that their money was securely held in individual accounts, “all of which are separate and distinct from our operating accounts.” In fact, prosecutors allege, the money was mingled together and used to pay the co-owners and make “loans” to preferred professional players. Prosecutors allege Mr. Lederer received $42 million and Mr. Ferguson was allocated $85 million, filings allege. Much of the money was transferred to personal accounts in Switzerland, the filings allege.

“Full Tilt insiders lined their own pockets with funds picked from the pockets of their most loyal customers while blithely lying to both players and public alike about the safety and security of the money deposited with the company,”  Manhattan prosecutor Preet Bharara, said in statement.  “Full Tilt was not a legitimate poker company, but a global Ponzi scheme.

Poker players around the country said they were stunned by the latest accusations. “If true, these allegations detail a massive betrayal of player trust, which will cause financial hardship for thousands, if not millions, of individual poker players, none of whom are accused of doing anything wrong,” John Pappas, executive director of advocacy group Poker Players Alliance, said in a statement.”

Publisher: Salient News