Just when you thought Full Tilt Poker had nothing more to lose, here comes an absolutely shocking development: Preet Bahara of the Manhattan U.S. Attorney’s Office has amended the Department of Justice’s original money laundering complaint against Full Tilt Poker to allege that Howard Lederer, Chris Ferguson, and other co-owners of Full Tilt essentially defrauded players in a worldwide online Ponzi scheme!
First they were shut down on Black Friday, losing their American players. Then, they lose their license and ability to operate anywhere else in the world. Now the poker world learns via a press release that Full Tilt Poker was one big lie all along?! Still reeling from the news and sitting slack-jawed as I write these words, this poker blogger is astounded by the brazenness with which the 2 dozen owners of Full Tilt Poker conducted their online operations. Though CEO Ray Bitar and poker pro Rafe Furst were also named in the amended prosecution complaint, the big fish with the most to lose are clearly Lederer and Ferguson.
The Professor Outsmarted… No Savior for Jesus…
Known to millions around the world as “The Professor” and “Jesus”, respectively, Lederer and Ferguson were among poker’s top names to become famous “brands” in the wake of the Moneymaker poker boom. Both are highly-decorated pros with multiple World Series of Poker bracelets, and Ferguson is a former WSOP Main Event Champion (2000). Clearly, the bigger they are, the harder they fall.
In the words of U.S. Attorney Bahara himself: “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 … 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.”
Some Very Disturbing Facts and Figures
According to the press release, Full Tilt Poker apparently owed $390 million to its players ($150 million to U.S. players) while only having $60 million on deposit in its accounts. The Ponzi scheme apparently took form when Full Tilt Poker credited players’ online poker accounts with money that had never actually been collected from them.
And here’s the kicker: During the most recent 4 years of it’s operations, Bitar, Lederer, Ferguson, Furst and the other board members were allocated a combined mind-boggling $440 million! Moreover, upwards of $10 million per month kept being paid to the company’s board members up until April 2011!!! So where’s the money? Apparently, in Swiss bank accounts and other overseas locations.
In addition to the original accusations of operating an unlawful gambling business, massive defrauding of the U.S. banking system, wire fraud, and money laundering, Full Tilt Poker is now also being charged with intentionally misleading its players to believe, through posts on reputable poker forums like 2+2, that all deposited monies were kept in secure, segregated accounts.
The amended complaint also contained details of internal emails sent by the Full Tilt Poker CEO directly acknowledging the financial distress the company was in and the danger of having this situation revealed.
Where Do Players Turn From Here?
Thankfully I never played even a single hand of online poker on Full Tilt, but I have lots of friends who had accounts there. Online grinders and poker pros, especially high rollers like Tom Dwan and Phil Galfond, had millions tied up in their FTP accounts. Canadians just filed a class action lawsuit against Full Tilt Poker, but now, more than ever, it appears that nobody will see their money again. I can only hope, for the sake of the players, that I’ll be proven wrong on this.
Robbie,
Out of curiosity, why do you keep endorsing PokerStars? Reputable is one thing, but from what I understand, the online poker industry is completely unregulated (unlike, say, Vegas). This means that a site can be entirely reputable until it isn’t, because nobody’s looking over anybody’s shoulder.
Steven Leavitt once called online poker a giant exercise in trust: In addition to the game of poker, you’re also betting that a site and its admins aren’t working against you. https://www.freakonomics.com/2007/10/17/the-absolute-poker-cheating-scandal-blown-wide-open/
Hi Shlomo,
Thanks so much for reading the article! You raise an excellent question. Especially in an unregulated industry, trust is pretty much the only currency you can rely on. Though I can’t speak for anyone else, in all my own personal dealings with PokerStars as both a player and affiliate I have only had positive experiences. Moreover, they have a STELLAR reputation worldwide among players, business partners, and high-profile “names” in the poker industry. While they may have toed the line as far as not leaving the U.S. market in 2006, they did absolutely everything in their power to lobby the DOJ to let them pay back affected American players. Moreover, the only reason/way they were even able to do so was because they never “cooked the books” and did indeed have player moneys fully segregated from operations cash flow.
Finally, I know it sounds a bit corny, but I do personally place a lot of trust in the opinions of Daniel Negreanu. He specifically only agreed to become a spokesperson for PokerStars, as opposed to other potential online suitors. Ever since he was grinding and before he became famous, he always did a full due diligence on every poker venture he entered. From day 1 until today, he sings the praises of Isai Scheinberg (founder/owner of PokerStars) for the way he runs and operates the business. He wears his heart on his sleeve and is never afraid to be honest publically about his feelings towards any poker entity, his friends and acquaintences included. I trust that if he sees anything suspicious or fishy going on, he’d walk out in a heartbeat. So, bottom line, if he feels comfortable being the frontman and endorsing PokerStars, so can I via this blog.
Again, thanks for reading the article and taking the time to comment. Would be happy if you shared the site with other friends 🙂
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