Poker site called ‘Ponzi scheme’
US says Full Tilt cheated players
Federal prosecutors said yesterday that one of the biggest online poker sites, Full Tilt Poker, was accepting millions of dollars in bets but paying out the money in profits to its owners instead of keeping it to pay out to players.
In a lawsuit, prosecutors contend that Full Tilt Poker’s board members and other owners pulled hundreds of millions of dollars off the table, nearly draining accounts the company assured players were filled with their funds.
“Full Tilt was not a legitimate poker company but a global Ponzi scheme,’’ said Preet Bharara, the US attorney in Manhattan.
The complaint against Full Tilt and its board both amends and builds upon a criminal indictment against the company and two other Internet poker companies that was unsealed in April by the prosecutors for the Southern District of New York.
At the time, prosecutors charged that the operators of Full Tilt Poker, PokerStars, and Absolute Poker tricked banks into processing billions of dollars in payments from US customers. They said the actions violated a federal law passed in 2006 that prohibits illegal Internet gambling operations from accepting payments.
During that investigation, prosecutors said in the complaint filed yesterday that they discovered Full Tilt had “cheated and abused its own players to the tune of hundreds of millions of dollars.’’
Specifically, prosecutors said that since April 2007, the company had paid $440 million to board members and other owners. By March of this year, investigators allege, the company owed $390 million to players around the world, including $150 million to US players. But, the complaint says, it had only $60 million in the bank.
That does not necessarily mean that players were asking for money and not receiving it from Full Tilt, according to specialists in gambling law and the Internet poker industry. In fact, players may have kept money in accounts with Full Tilt intending to play with the proceeds and draw down winnings over time.
Representatives for Full Tilt Poker could not be reached for comment.