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US Attorney Labels FT 'Ponzi Scheme'

Manhattan’s U.S. Attorney Preet Bharara said today that Full Tilt and its board of directors operated “as a massive Ponzi scheme against its own players.” Bharara made the comments while filing a motion to amend a forfeiture and civil money laundering complaint that was unsealed in April. Howard Lederer, Chris Ferguson, and Rafe Furst have been added as new defendants to the lawsuit.

“Full Tilt was not a legitimate poker company, but a global Ponzi scheme,” Bharara said in a statement. “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.”

The new complaint claims that by March 31, Full Tilt only had $60 million or so in its bank accounts, while owing $390 million to players around the world, including $150 million in the United States.

According to Bharara, Full Tilt has paid its board of directors and sponsored pros some $440 million since April 2007. Specifically, Bitar pocketed $41 million and Lederer took home $42 million, while Chris Ferguson was allocated $87 million in distributions and received at least $25 million. The amended complaint also refers to a “Player Owner 1” who received $40 million in dividends and loans. This unnamed player is Phil Ivey.

Detailed information pertaining to the ownership of Tiltware was revealed:

“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.”

Click here for a database of all related filings.

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