DOJ Statement on Recovering Funds From Full-Tilt Poker

By Jeralyn, Section Crime in the News
Posted on Thu Sep 29, 2011 at 04:38:30 PM EST
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If you are owed money by Full-Tilt Poker, which the Government says is a Ponzi scheme, don't look for recovery any time soon. Today, the Alderney Gambling Control Commission on the British Channel Islands revoked its license, jeopardizing any payback plan. And, the Department of Justice issued this statement today:

United States v. Pokerstars et al., 11 Civ. 2564 (LBS) (Full Tilt Poker information)

...By way of background, in April of 2011, this Office entered into a domain-name use agreement with Full Tilt Poker. That agreement, among other things, expressly authorized Full Tilt Poker to return player funds to players. However, as the September 22 amended complaint alleges, Full Tilt Poker did not in fact have player funds on hand to return to players. Instead, the amended complaint alleges that Full Tilt Poker had, among other things, (a) transferred significant amounts of players’ real money deposits to principals of the company, while (b) allowing many players to continue to gamble, and “win” and “lose,” with phantom credits in their player accounts.

[More...]

At this time, this Office, together with the FBI and other agencies, is attempting to trace, secure and forfeit as much as possible of the funds derived from operation of the fraud committed by Full Tilt Poker and its board members that is alleged in the amended complaint. The Office is also attempting to obtain and examine the books and records of Full Tilt Poker. Many of those books and records are kept overseas. The return of forfeited funds to victims of the alleged fraud may be possible, but will depend on several factors, including the successful conclusion of the litigation, the amount of funds seized and ordered forfeited by the court, and compliance with other procedures the Department of Justice may eventually establish regarding return of forfeited funds to victims who lost money as a result of the alleged fraudulent conduct.
We cannot predict the duration of proceedings in this case, other than to state that they will last for many months at the least. We will apprise victims of the alleged fraud of future developments as appropriate. General information regarding what is known as “remission” (i.e., return to victims) of funds that have been seized and forfeited is set forth in Department of Justice regulations found at 28 C.F.R. Part 9.

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DOJ Statement on Recovering Funds From Full-Tilt Poker | 19 comments (19 topical)

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kdog? Dadler? (none / 0) (#1)
by sarcastic unnamed one on Thu Sep 29, 2011 at 04:47:13 PM EST

: Way over my head... (none / 0) (#19)
by kdog on Fri Sep 30, 2011 at 12:29:56 PM EST

All I know for sure is Full Tilt was sloppy with the players money & accounting...and once John Law comes a knockin' and seizing all bets are off. I'm not gonna take their word for it that Full Tilt is welching.
I think I know what the answer is though, legalize and regulate, like legal forms of gambling.

Damn, I left about 3 bucks in my account (none / 0) (#2)
by Dadler on Thu Sep 29, 2011 at 04:49:02 PM EST

Seriously, this whole thing just gets more opaque.

Why a ponzi scheme would pay me my measly eleven grand, after I'd never even DEPOSITED any money, I dunno, well, maybe that's where I got lucky.

You've had personal interaction with Lederer, haven't you, Tent? What's your take? As for Jesus Ferguson, everyone who knows him seems to be flabbergasted that he could be guilty. Most of these big players, however, no matter what they seem like in their public snips, are all degenerate action junkies. They make prop bets on anything for tons of money -- I remember Huck Seed laying down something like a hundred grand on a bet with another player about whether he could stand in the ocean up to his chest for 24 hours. Seed was a CalTech student and he STILL made that bet.

Stay tuned, I suppose.

I think the issue on the money (none / 0) (#10)
by jimakaPPJ on Thu Sep 29, 2011 at 10:12:51 PM EST

is that the "float" got gummed up and they just kept on paying Lederer and Ferguson among others.

I don't think either Lederer or Ferguson has been charged with any criminal violations but I don't the other shoe has been dropped.

BTW - The casino is required to keep enough cash on hand to 100% match the amount of chips outstanding.


Obviously the casino has to have it (none / 0) (#12)
by Dadler on Thu Sep 29, 2011 at 10:46:31 PM EST

And I suspect the principles got happy feet and took their money, or more than they should have, before the sh*t hit the fan. There's just something about this story that isn't adding up, no pun intended. I assume at some point we'll find out what the truth is.

Truth be told, the insurance industry can never pay out claims if too big a disaster hits, or more than one, that industry is predicated on the notion, "Oh, we'll never have to pay out that much at one time, and if we do, shoot, tough luck." And banks, forget it. You know how much gets stolen from banks that they NEVER report? A lot, trust me, my wife is a VP. Insiders steal more than anything, because it's so easy, and banks do NOT want people to know how easy it is.

That said, if these FT guys really stole this money, then it is hard for me to believe they won't be charged soon. As they should be.

One thing I do know, however, is that Vegas money is greasing a lot of pol pockets, because you and I both know they want ALL the online action when if finally becomes legal here.


: Well, the insurance gang (none / 0) (#15)
by jimakaPPJ on Fri Sep 30, 2011 at 07:56:28 AM EST

has reinsurance that supposedly spreads the losses around but I suspect that if a disaster was big enough they couldn't pay. I know that after our last two springs of tornadoes and floods my home insurance has went up around $400 to almost $2100/year.
To my complaint the "losses" story is offered. To which I have expressed "BS" to my agent. Not that it did any good beyond letting him know I don't believe him. And when I shopped around all the companies rates were within $100 of each other.
Not they are price fixing or anything, eh?
I think it's pretty plain that Lederer et al got the money. Whether or not it is stealing, I don't know. My view is that the player's account money is the same as real estate escrow money but I'm probably wrong.
Interestingly, I have never heard of a Poker Stars player not getting their money, yet in one of the links I read where the Feds had frozen $5.5M account money because it represented US players gambling money but said PS could use the remainder, which I take to be non-US player's money. I do know that about 6 weeks or so ago the ability to view your account disappeared from the site. I never played for cash on FT or PS. I did play for "play money."
It's obvious that on-line poker needs to be legalized, regulated and taxed. Prior to this we had the Russ Hamilton thing and there was a now defunct site that it was rumored had had its firewall cracked and some players could "see" everyone's hole cards.
But outside of the Hamilton thing I have never heard of site owners/management running a crooked game. I have heard of players engaging in various forms of "team" play. How that will be controlled if on line play becomes legal will be interesting to see.

: Could it be... (none / 0) (#21)
by kdog on Fri Sep 30, 2011 at 01:50:10 PM EST

the owners "stole" the money just to prevent the government from stealing it?
Hopefully they're keeping it safe to pay players once the heat dies down.
I'd find it hard to believe lifelong pro gamblers such as Ferguson and Lederer would welch if they could help it, but who knows. A gambler who welches is finished in the gambling community...err, the legitimate gambling community, Wall St. doesn't count:)

The real question: will the IRS (none / 0) (#3)
by Mr Natural on Thu Sep 29, 2011 at 06:07:55 PM EST

tax the winners on their imaginary winnings?

Can they be paid in (5.00 / 0) (#4)
by MO Blue on Thu Sep 29, 2011 at 06:28:41 PM EST

imaginary dollars?


: Somehow, (none / 0) (#5)
by Zorba on Thu Sep 29, 2011 at 06:46:49 PM EST

I think not. ;-)

Did anyone get their money? (none / 0) (#6)
by andgarden on Thu Sep 29, 2011 at 07:38:55 PM EST

It seems like if you left your cash in after the domain names were seized, you were just asking for trouble.

I think some Full Tilt (none / 0) (#9)
by jimakaPPJ on Thu Sep 29, 2011 at 10:08:02 PM EST

did.

I think everyone from the US in Poker Stars got their money when PS shut down playing for cash by US players, but PS was not charged with anything.


: PokerStars is part of the original indictment (none / 0) (#13)
by Dadler on Thu Sep 29, 2011 at 10:47:49 PM EST

But maybe they're off the hook now, I dunno.

Lederer senior is speaking @ (none / 0) (#7)
by oculus on Thu Sep 29, 2011 at 07:44:28 PM EST

my branch library on Aging.

topic (none / 0) (#8)
by mymy on Thu Sep 29, 2011 at 08:17:23 PM EST

Please point me to the discussion of "Gunwalker" "Fast and Furious". I'm trying to understand what was going on.

Progessive web sites don't cover it. Although (none / 0) (#18)
by Wile ECoyote on Fri Sep 30, 2011 at 11:30:42 AM EST

it is one of President Obama's more successful stimulus programs.
Here is a good place to start:

Of arms and the law

The ATF section of SayUncle.

Just for a start.


: Indeed, Obama has stimulate guns sales, (none / 0) (#20)
by sarcastic unnamed one on Fri Sep 30, 2011 at 01:26:43 PM EST

at least that is what I have seen among my neighbors here in CA.

Got my Pokerstars money back fast (none / 0) (#11)
by lawyerjim on Thu Sep 29, 2011 at 10:25:06 PM EST

But I still had a lot on Full Tilt. It's too bad it wasn't legalized, regulated and taxed here.

Site violator (none / 0) (#16)
by sj on Fri Sep 30, 2011 at 09:17:24 AM EST

Even worse than the last.