Full Tilt Poker CEO finally surrenders to U.S. authorities
Perhaps Kenny Rogers said it best: "If you're gonna play the game, boy, ya gotta learn to play it right.Full Tilt Poker CEO Raymond Bitar finally surrendered to U.S. authorities yesterday, but pleaded not guilty to nine criminal counts, including charges of illegal gambling, money laundering, wire fraud and defrauding...
July 03, 2012 at 08:02 AM
9 minute read
The original version of this story was published on Law.com
Perhaps Kenny Rogers said it best: “If you're gonna play the game, boy, ya gotta learn to play it right.”
Full Tilt Poker CEO Raymond Bitar finally surrendered to U.S. authorities yesterday, but pleaded not guilty to nine criminal counts, including charges of illegal gambling, money laundering, wire fraud and defrauding its online poker players out of more than $440 million.
Bitar had been working at the online poker website's Dublin, Ireland, headquarters since the charges were leveled against him and Full Tilt's board of directors Howard Lederer, Chris Ferguson and Rafael Furst in April 2011.
U.S. Magistrate Judge Debra Freeman denied a prosecutor's request to refuse bail for Bitar, and set his release on a $2.5 million bond. He will remain behind bars until the bail conditions are met.
The prosecution alleged that because Bitar had stayed in Ireland rather than face charges in the U.S., he was a flight risk, but Bitar's lawyers said that he stayed there to work on possible solutions to repaying its customers.
Last September, the U.S. Justice Department (DOJ) filed a civil suit accusing Full Tilt of bluffing its members out of their money. The government alleges the poker site's board misrepresented that players' funds were safe and available for withdrawal at any time when, in reality, those funds were not available and used to pay the board members and other owners.
In order to maintain the appearance of security, the website continued to credit players' accounts without ever disclosing its inability to fund the credits. When players gambled with the “phantom funds” and lost to other players, a massive shortfall quickly developed, the DOJ said.
“As the proposed Amended Complaint describes in detail, Full Tilt was not a legitimate poker company, but a global Ponzi scheme,” U.S. Attorney Preet Bharara said in a release last September. “As a result of our enforcement actions this alleged self-dealing scheme came to light. Not only did the firm orchestrate a massive fraud against the U.S. banking system, as previously alleged, Full Tilt also cheated and abused its own players to the tune of hundreds of millions of dollars.”
Despite protestations from prosecutors, Bitar and his attorneys still contend that Full Tilt was not a Ponzi scheme.
Prosecutors have since expanded both their civil and criminal charges against Full Tilt. They estimate that Full Tilt has pilfered about $1 billion from U.S. players, and still owe about $350 million to those customers.
Full Tilt began having problems accepting new bets from players in 2010 after the U.S. government came down on online gambling payment-processing services, but the board members kept their hands in the coffers anyway.
According to the DOJ, between April 2007 and April 2011, Bitar received about $41 million, Lederer received about $42 million, Ferguson received at least $25 million and Furst about $11.7 million. Much of the remaining money was transferred to other board members, and now resides in offshore and Swiss accounts.
For more on Bitar, read Reuters.
And for more from InsideCounsel on Full Tilt and poker schemes, read:
Perhaps Kenny Rogers said it best: “If you're gonna play the game, boy, ya gotta learn to play it right.”
Full Tilt Poker CEO Raymond Bitar finally surrendered to U.S. authorities yesterday, but pleaded not guilty to nine criminal counts, including charges of illegal gambling, money laundering, wire fraud and defrauding its online poker players out of more than $440 million.
Bitar had been working at the online poker website's Dublin, Ireland, headquarters since the charges were leveled against him and Full Tilt's board of directors Howard Lederer, Chris Ferguson and Rafael Furst in April 2011.
U.S. Magistrate Judge
The prosecution alleged that because Bitar had stayed in Ireland rather than face charges in the U.S., he was a flight risk, but Bitar's lawyers said that he stayed there to work on possible solutions to repaying its customers.
Last September, the U.S. Justice Department (DOJ) filed a civil suit accusing Full Tilt of bluffing its members out of their money. The government alleges the poker site's board misrepresented that players' funds were safe and available for withdrawal at any time when, in reality, those funds were not available and used to pay the board members and other owners.
In order to maintain the appearance of security, the website continued to credit players' accounts without ever disclosing its inability to fund the credits. When players gambled with the “phantom funds” and lost to other players, a massive shortfall quickly developed, the DOJ said.
“As the proposed Amended Complaint describes in detail, Full Tilt was not a legitimate poker company, but a global Ponzi scheme,” U.S. Attorney Preet Bharara said in a release last September. “As a result of our enforcement actions this alleged self-dealing scheme came to light. Not only did the firm orchestrate a massive fraud against the U.S. banking system, as previously alleged, Full Tilt also cheated and abused its own players to the tune of hundreds of millions of dollars.”
Despite protestations from prosecutors, Bitar and his attorneys still contend that Full Tilt was not a Ponzi scheme.
Prosecutors have since expanded both their civil and criminal charges against Full Tilt. They estimate that Full Tilt has pilfered about $1 billion from U.S. players, and still owe about $350 million to those customers.
Full Tilt began having problems accepting new bets from players in 2010 after the U.S. government came down on online gambling payment-processing services, but the board members kept their hands in the coffers anyway.
According to the DOJ, between April 2007 and April 2011, Bitar received about $41 million, Lederer received about $42 million, Ferguson received at least $25 million and Furst about $11.7 million. Much of the remaining money was transferred to other board members, and now resides in offshore and Swiss accounts.
For more on Bitar, read Reuters.
And for more from InsideCounsel on Full Tilt and poker schemes, read:
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