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.” ®