Full Tilt Poker's CEO, Ray Bitar, surrendered to federal authorities Monday to face nine counts of a superseding indictment that charges him with "defrauding poker customers by lying to them about the security of their funds," which carries a maximum prison term of 145 years.
The United States Attorneys Office for the Southern District of New York issued a press release announcing the arrest of Bitar at John F. Kennedy International Airport in New York on charges that include violating the Unlawful Internet Gambling Enforcement Act (UIGEA), money laundering conspiracy, and operating an illegal gambling business.
“With today’s arrest and the new charges brought against him, Raymond Bitar will now be held criminally responsible for the alleged multi-million fraud he perpetrated on his U.S. customers," Manhattan U.S. Attorney Preet Bharara said. 'The indictment alleges how Bitar bluffed his player-customers and fixed the game against them as part of an international Ponzi scheme that left players empty-handed.”
Facing superseding charges along with Bitar is co-defendant Nelson Burtnick, who ran Full Tilt's payment processing operation. Burtnick has not been apprehended. Bitar was taken before U.S. Magistrate Judge Debra Freeman. Details of the hearing have not yet been released.
The counts of the superseding indictment are more severe than the initial charges Bitar faced in the Black Friday allegations that shook the online poker industry and forever changed the landscape of Internet poker after more than a decade of virtually unregulated gambling offered by off-shore companies. In explaining the new charges, FBI Assistant Director-in-Charge Janice K. Fedarcyk said, “Bitar and Full Tilt Poker persisted in soliciting U.S. gamblers long after such conduct was outlawed. As alleged, Bitar has already been charged with defrauding banks to conceal the illegal gambling. Now he stands accused of defrauding Full Tilt’s customers by concealing its cash-poor condition and paying off early creditors with deposits from later customers. The online casino become an Internet Ponzi scheme."
There are rumors circulating on TwoPlusTwo online poker forums that Bitar's surrender is a required step in facilitating the purchase of Full Tilt Poker by PokerStars. A poster apparently leaked an email that was alleged to have ben sent by Bitar to Full Tilt employees in Ireland. In the online missive, Bitar purportedly says that his surrender on U.S. soil is "part of the process" in finalizing the deal between the U.S. Department of Justice, PokerStars and Full Tilt.
"We have all worked hard over the last 15 months to preserve Full Tilt’s assets and potential in order to provide for the repayment of all players, and that continues to be our top priority," Bitar said in the email. "It is as important as ever that we all do everything possible to make that happen and, hopefully our deal with Poker Stars will very soon make our goal a reality."
The press release makes no mention of the settlement discussions. However, there is word that prior to Bitar being taken into custody, federal prosecutors had requested that proceedings in the Black Friday allegations be continued on the grounds that settlement negotiations among various defendants were ongoing.
Out of 11 individual defendants charged in the April 15, 2011 indictments, Bitar's arrest brings the number of those arrested to seven. Ryan Lang, Ira Rubin, Bradley Franzen, Chad Elie, Brent Beckley and John Campos have all pled guilty and are awaiting sentencing, except for Campos, who last month received a three-month jail term and is forbidden to ever work in the U.S. banking industry. The remaining four defendants still at large are Burtnick, Paul Tate, Scott Tom and Isai Scheinberg.