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The DOJ filed a motion to amend an earlier civil complaint against Full Tilt Poker to include “additional allegations, claims, and defendants concerning a fraudulent scheme by Full Tilt Poker and its Board of Directors concerning the misuse of players’ funds,” according to a memorandum sent out by Preet Bharara, U.S. Attorney from the Southern District of New York.
“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.”
Lederer, Ferguson, former CEO Ray Bitar and Rafael "Rafe" Furst, all owners of Full Tilt Poker, are accused of distributing approximately $443 million to themselves and other owners of the company. The amended complaint alleges that Full Tilt mixed player funds with operating funds, despite public claims to the contrary by the site.
The DOJ said that by the end of March, Full Tilt Poker owed approximately $390 million to players worldwide, including $150 million to American players, but had less than $60 million in its bank accounts.
“Full Tilt Poker allowed players to gamble with -- and lose to other players -- this phantom money that Full Tilt Poker never actually collected or possessed,” the DOJ said in a memo.
Lederer, Ferguson and Furst were not included in the original April 15 indictment against the founders of Full Tilt Poker, PokerStars and Absolute Poker. Those three sites were accused of bank fraud, money laundering, illegal gambling offenses and violating the Unlawful Internet Gambling Enforcement Act. All three stopped taking American players shortly after the indictment.
Repaying players has been a totally different matter. PokerStars has paid more than $120 million to American players, and has had no significant delays in paying its international customer base. Full Tilt and Absolute Poker, meanwhile, still owe their players millions of dollars.
The amended complaint claims that Lederer personally received $42 million in company funds, while Ferguson was allocated over $85 million in distributions, but only received about $25 million of this sum.
An unnamed Full Tilt Poker pro received at least $40 million in distributions, while also receiving millions of dollars characterized as loans by Full Tilt. Over $4 million of these loans have not been repaid.
The amendment also states that up until April 2011, Full Tilt Poker continued making payments of up to $10 million per month to its owners, despite the company’s liquidity issues.
Full Tilt Poker’s website stated as of yesterday that players’ funds were “safe and secure.”
The DOJ is seeking $40 million from Bitar, $41.8 million from Lederer, $25 million from Ferguson and $11.7 million from Furst.