FOX SPORTS

Feds: Full Tilt Poker was Ponzi scheme

NewsCore The Wall Street Journal
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The US Justice Department on Tuesday accused poker celebrities Howard Lederer and Christopher Ferguson and other executives of a major poker website of defrauding poker players out of more than $300 million.

The US Attorney in the Southern District of New York filed a motion Tuesday to amend an earlier civil complaint to allege that Ferguson, Lederer and two other directors for the website, Full Tilt Poker, operated what the Justice Department says was a Ponzi scheme that allowed the company to pay out $444 million to themselves and other owners, which included other famous poker players.

In the complaint, the government alleges Full Tilt executives misrepresented to the website's players that the money the company was supposed to be holding in player accounts was safely held when it was actually being used for other purposes, including owner profits.

The distributions to the owners continued even as funds to pay out creditors -- the poker players -- dwindled because government investigators had made it increasingly impossible to move player money into company-affiliated bank accounts, the government says.

"Full Tilt was not a legitimate poker company, but a global Ponzi scheme," said Preet Bharara, US Attorney for the Southern District, in a statement.

In the statement, Bharara said Full Tilt "cheated and abused its own players to the tune of hundreds of millions of dollars" and that "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 with the company."

Attorneys for the company didn't respond immediately to requests for comment Tuesday morning. Attorneys for Ferguson didn't respond to requests for comment while attempts to reach Lederer on the phone weren't successful.

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