Is Full Tilt Poker A Ponzi Scheme?

Preet Bahrara is the United States Attorney for the Southern District of New York, and recently announced a major bit of information in the Full Tilt Poker case.  According to the new motion that was put in place, the owners and co-owners of the online poker site have taken money from the deposits that players made onto the site, and took it into their own pockets.

Ray Bitar is one of the largest names involved, but it also includes players like Howard Lederer, Chris Ferguson, and Rafe Furst as well.  Essentially they are saying that Full Tilt Poker was not actually a poker company, but was just a Ponzi scheme.  The online poker site took hundreds of millions of dollars from their players, and actually pocketed the funds instead of segregating deposited funds into an account.  An online poker site is supposed to take this money and put it into a side account which is then used for withdrawals.  According to Bahrara, Full Tilt Poker decided not to do this, and instead to give around $500 million to the owners and co-owners of the site.

In total, it is said that there was over $443 million paid out to players, and the motion actually stated total estimates for how much each of the four big names were paid out.  Bitar and Lederer were paid out the most, with Bitar getting an estimated $41 million, and Lederer getting $42 million.  Ferguson was said to have been paid out $25 million, but was still owed around $62 million; and Furst was said to have received $11.7 million.  The remainder of the total money out of the $443 million was then split among the 19 other owners of Full Tilt Poker.

While the situation for Full Tilt continues to get worse, it unfortunately doesn’t stop there.  Back in 2010, it was said that Full Tilt actually couldn’t find payment processors to send the money between the players’ bank accounts and the site itself.  So players would make deposits onto the site, Full Tilt would credit money into their account, and the players would play with money that actually wasn’t going anywhere.  The total estimated amount of money out there that never actually made it anywhere was around $130 million.

After Black Friday, it was said that Full Tilt owed around $300 million to players all around the world, and according to the amended complaint; Lederer had said to others at Full Tilt that the company only had $6 million out of that massive $300 million.