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 Simon Bowers |
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| Filing a
beefed-up lawsuit against Full Tilt, Bharara said the Ponzi scheme had only
been discovered after federal offices began action against the company in
April Full Tilt, the world's second largest online poker group, which was shut down by US prosecutors earlier this year, had been operating as a $330m (£210m) Ponzi scheme, milking its own players' funds for the benefit of executives led by founders Ray Bitar and Howard Lederer, according to a new court complaint against the Dublin-based group. The complaint has been lodged by one of America's most successful white collar crime prosecutors, Manhattan attorney Preet Bharara, who was involved in the prosecution of Bernie Madoff and former hedge fund boss Raj Rajaratnam. He said: "Full Tilt was not a legitimate poker company, but a global Ponzi scheme. "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." . Full Tilt catered to players around the world, including thousands in the UK, but controversially took funds from players from the US, where payments related to online poker were outlawed in 2006. London-listed gaming companies such as bwin.party and Sportingbet stopped accepting US players after the law changed. Before the site closed poker players on Full Tilt were required to deposit funds into an online account with the company, before being allowed to take a seat at the virtual poker table. Winnings were also purportedly credited to these accounts. Filing a beefed-up lawsuit against the group, Bitar and his business associates, Bharara said the Ponzi scheme had only been discovered after federal offices began action against the company and its larger rival PokerStars in April. "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 with the company," Bharara said. FBI investigators claim to have found that by the end of March Full Tilt owed about $390m to players around the world but had only $60m in its bank accounts. Even after US authorities moved to close down the site in America, the company continued to take player deposits from elsewhere, allegedly knowing it did not have funds to meet liabilities. According to Bharara's complaint, Full Tilt directors and owners extracted $444m from the company in the last four years. Former equities trader Bitar received $41m and poker professional Lederer received $42m. Full Tilt largely operated from a business park just south of Dublin but was regulated in Alderney in the Channel Islands. Under the UK's liberal online gambling laws, the company was able to freely advertise to British players without holding a licence from the UK Gambling Commission. It is not known how many British players will have lost funds deposited with Full Tilt but the figure is expected to run into many thousands. A message on the Full Tilt website now reads: "We apologise but the system is currently down. Please check back later." |
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