Full Tilt Poker May Have Been A Ponzi Scheme
News that Full Tilt Poker may have been a ponzi scheme broke last week when the US Government alleged that, indeed, Full Tilt Poker was a ponzi scheme.
“Full Tilt was not a legitimate poker company, but a global Ponzi scheme,” said Manhattan U.S. Attorney Preet Bharara in a statement Tuesday. The U.S. government views online poker operations, at least those that cross state lines, as illegal.
Even crazier is that two of the most known poker pros, Howard Lederer and Chris Ferguson, were implicated as part of the illegal activities.
Federal prosecutors in Manhattan on Tuesday added Ferguson’s name to a civil money laundering complaint, claiming that Full Tilt Poker improperly used funds of online poker players to pay members of its board of directors—including Ferguson and Howard Lederer, a fellow poker champion—$440 million since April 2007.
To no surprise Ferguson’s lawyers refute that he was a part of a ponzi scheme.
“While the government has obviously taken issue with the underlying activities of FTP, under any reasonable interpretation, the worldwide operations of the online cardroom are not a so-called Ponzi scheme,” said Ian Imrich, a lawyer for Ferguson, in a statement.
Yesterday it was Full Tilt Poker’s turn to say that they are not a ponzi scheme. Here is their official statement.
“On September 19, 2011, the Department of Justice issued a release stating that Full Tilt Poker was ‘A Global Ponzi Scheme.’ While the government has taken issue with the underlying activities of FTP, under any reasonable interpretation, there is no way to characterize the operation of Full Tilt Poker’s virtual online card room as a global Ponzi scheme.
“A ‘Ponzi’ scheme is an investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors. Ponzi schemes do not involve any legitimate investment, but rather use the new investor funds to pay ‘dividends’ to the initial investors.
“Despite recent events, FTP remains committed to identifying a suitable investor and paying back its players in full.”
There is a whole lot of mess here. None of the statements that are against Full Tilt NOT being a ponzi scheme say much. I usually live by the motto, where there’s smoke there’s fire and I think FTP stepped into a big one here.
Further, if this is true I can’t imagine Lederer or Ferguson ever showing their faces in Las Vegas or any poker events in the future. This isn’t done yet, but it doesn’t look good for those that have their money tied up with FTP.
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