On Monday, the Alderney Gambling Control Commission (AGCC) and Full Tilt Poker's representatives returned to the Riverbank Park Plaza hotel in Vauxhall, South London to resume the hearing which stared July 26th, but after reaching no consensus was adjourned until September 19th. However, the second attempt to finally sort things out between the two organizations was interrupted by breaking news from across the pond – the Manhattan U.S. Attorney’s Office announced it amended the original complaint issued April 15th to Full Tilt Poker with allegations of fraud to four founders of the company – Ray Bitar, Howard Lederer, Chris “Jesus” Ferguson and Rafe Furst.
“Full Tilt was not a legitimate poker company, but a global Ponzi scheme. 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 the public alike about the safety and security of the money deposited,” stated U.S. Attorney Preet Bharara.
According to the amended complaint, “At all times relevant to the Amended Complaint, Bitar, Lederer, Ferguson, and Furst were among the founders of Full Tilt Poker, as well as part-owners of Tiltware, LLC, a California Limited Liability Company that was the beneficial owner of all other Full Tilt Poker entities. In total, approximately 23 individuals owned shares in Full Tilt Poker. The FTP Insider Defendants specifically owned the following approximate percentages of Tiltware LLC: Bitar (7.8%), Lederer (8.6%), Ferguson (19.2%), and Furst (2.6%). The FTP Insider Defendants were also, at all relevant times, members of the Board of Directors of Tiltware LLC, and Ferguson was Chairman of the Board of Directors.”
The 90-page document reveals the details of what Full Tilt actually owes to their players worldwide – as of March 21, 2011, FT's debt was $390 million. However, the company only had $60 million in their bank accounts, which means Full Tilt is over $300 million in debt to their players all over the world. The debt grew constantly due to Full Tilt's inability to control their online payment processors and therefore “the company faced increasing difficulty attempting to collect funds from players in the United States. Rather than disclose this fact, Full Tilt Poker simply credited players’ online gambling accounts with money that had never actually been collected from the players’ bank accounts. Full Tilt Poker allowed players to gamble with — and lose to other players — this phantom money that Full Tilt Poker never actually collected or possessed.”
The complaint also states that despite the company's financial problems, the four Full Tilt Poker founders and shareholders have credited their own accounts with $443,860,529.89 of players’ money. From April 2007 to April 2011 Ferguson, Furst, Bitar, and Lederer all took part in expropriating players' funds for their own benefit. A press release regarding the amended complaint claimed: “Bitar received approximately $41 million, Lederer received approximately $42 million, and Furst received approximately $11.7 million. Ferguson was allocated approximately $87,486,182.87 in distributions, and received at least $25 million, with the remaining balance characterized as "owed" to him. Much of the money that was distributed was transferred by the board members and owners to accounts in Switzerland and other overseas locations.”
However, not Ferguson nor Lederer or Furst are at risk of facing jail time – the Manhattan U.S. Attorney’s Office has only issued the amendment to the civil complaint. The outcome of the process would not result in arrests since it has been issued as civil and not a criminal complaint. Still, they are very likely to be sued and if proved guilty, their property – five bank accounts – may be arrested and forfeit.
The amended complaint also accuses Full Tilt Poker of misleading their players via emails, social media and internet poker forums. A specific example refers to a July 19, 2008, post on TwoPlusTwo.com forum by Full Tilt spokesman “FTPDoug,” where he commented on player deposits and transactions:
“Trusts are legal vehicles whereby funds are deposited into a trust account under the control of a trustee who manages the funds in accordance with the instructions of the trust settlor (you). Given the thousands of deposit and withdrawal transactions Full Tilt has to process each day, the variety of methods used to deposit funds, and the delays in actually receiving funds which are deposited by credit card or check, a trust is simply not practical for our purposes.”
“Players' funds at Full Tilt Poker are kept in several deposit accounts throughout the world, all of which are separate and distinct from our operating accounts. Funds are transferred from the players' deposit accounts to Full Tilt Poker's operating accounts only after we have earned them. This is not done each time we earn rake or even daily, but as our earnings accumulate, we make periodic transfers of those earnings from the deposit accounts to our operating accounts.”
Rafe Furst Writes an Open Letter
Following the Tuesday news, Rafe Furst, contrary to the usual silence from the Full Tilt officials regarding company's legal issues, has posted an open letter on his blog. Furst has shared a link to the letter via his Twitter account – the complete letter can be found on EmergentFool.com.
Here's an excerpt of Furst's post:
“What I would like to express here is concern for my family, friends, colleagues and supporters who believe in me and who feel my pain as if it were their own. It sucks to have to endure the character assassination and potshots being taken at me in the media and social networks without being able to defend myself. Privately though I have received incredible support from many of you, and I can’t tell you how much it means to me. May you never have to endure something like this, but if you do, I hope you have friends as good as mine.”
“To the skeptics, please consider that not everything you read is true, and our society is built on a presumption of innocence until proven otherwise. It’s difficult to take back hurtful things that you might later regret, when the damage has already been done.”
Epic Poker League Suspends Lederer and Ferguson
As a reaction to Manhattan U.S. Attorney’s accusations to Howard Lederer and Chris Ferguson, Epic Poker League announced on Wednesday that the League's Standards and Conduct Committee suspended the two players indefinitely.
“The Committee voted to suspend Howard Lederer and Chris Ferguson indefinitely, pending the outcome of the Department of Justice’s action,” said Stephen Martin, chairman of Epic Poker League's Standard and Conduct Committee.
The committee has explained its decision stating that “the specificity of the allegations and the fact they came from the United States government made this the right course of action in the best interests of the players in the League.”
The EPL committee also noted that the League is going to follow the further actions of the DOJ and see if any other League members appear to be involved.
PPA's John Pappas' Statement
John Pappas, the Executive Director of the Poker Players Alliance has also issued a statement regarding Full Tilt Poker issues:
“This is a sad and disappointing day for American poker players. 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. We call on the Department of Justice to certify that the proceeds of any settlement or seizure that may result from this action will first be dedicated to reimbursing players. We further call on Full Tilt Poker, its management, directors and owners to take all available steps to ensure the prompt payment of players as their first priority.”
PokerNews took time to talk to the member of Full Tilt Poker Team Pro Tom “durrrr” Dwan on the recent news – you can read the entire interview here: “Tom "durrrr" Dwan Discusses Recent Full Tilt Developments.” Listen to the podcast.
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