Chronos
September 22, 2011, 5:35am
21
Ah, OK, if they explicitly said that the accounts were separate when they weren’t, that certainly makes it look like some crime or other. Fraud, I’d guess, though IANAL.
Dag_Otto:
From the complaint , FTP mislead players:
“To protect both our players and business from financial problems, all player account funds are segregated and held separately from our operating accounts. Unlike some companies in our industry, we completely understand and accept that your account money belongs to you, not Full Tilt Poker.”
That just wasn’t true.
Heh, yeah, the DOJ complaint actually refers to posts in this 2+2 forum thread from 2008 titled “FullTilt management failing?”
Full Tilt Poker management also monitored and responded to postings on a popular online discussion forum about internet poker (the “Poker Forum”), and those responses included representations from Full Tilt Poker that player funds were secure. For example:
a. On or about July 18, 2008, an individual (“Poker Forum Poster 1”) created a “thread” (the first in a series of new postings on a subject, to which other users can then respond) on the Poker Forum entitled “Fulltilt Management failing?” Poker Forum Poster 1 offered the opinion that Full Tilt Poker’s shareholders, who included various professional poker players, were not holding the company’s management to account. Another individual (“Poker Forum Poster 2”) replied that the “players/shareholders” of Full Tilt Poker don’t have a problem with management “as long as those monthlies don’t stop,” apparently referring to monthly payments made by Full Tilt Poker to its owners. Poker Forum Poster 2 went on to post that the “beauty” of a business like internet poker was “the sites can use the customer deposits interest free to invest in marketing efforts” and because there was “always money coming in” did not “need anywhere near 100% of customer’s deposits available to payout, more like 10% from what I’m told.”
b. Poker Forum Poster 2’s posting, and its implication that player deposits were used by Full Tilt to run its operation, generated a concerned response. On July 19, 2008, another individual (“Poker Forum Poster 3”) wrote that he was “greatly disturbed by the insinuation that FTP uses players’ money in any operational way. That is just frightening beyond belief.” Poker Forum Poster 3 advised “[s]eriously, every player should be worried about this sort of thing,” and called it “incredibly sketchy.”
c. That same day, a representative of Full Tilt Poker management, posting under the name “FTPDoug,” responded to the fears expressed Poker Forum Poster 3 as follows:
I’m not sure where most of the information in this thread is coming from, but I do want to clear up the most important piece of bad info. I didn’t write the following, but hopefully it answers the operational funds question . . .
d. Later that day, in response to further expressed doubts and questions about whether funds could be held in “trust” by Full Tilt Poker, “FTPDoug” wrote: “[Poker Forum Poster 3] – I don’t know enough about the specific legal terms for all of this to speak with any authority. I can say with authority, though, that we do not mix deposits with operational expenses, so the implications you mention were what I was trying to clear up.
Looks like my $40 is gone.
I take it, then, that they are not allowing folks to cash out at all? Even with limits?
As I understand it all accounts have been frozen since this all blew up.
Well, the Fed knows damn well it wasn’t a Ponzi scheme - they only used that in the statement (but not the official documentation) because they knew it would get headlines.
FTP was managed by a bunch of buffoons treating the company like one big personal ATM machine*. I’m not sure it was with specific nefarious intent - never assume evil intent when simple incompetence would suffice. But the level of mismanagement is ridiculous, especially when you consider that they were sitting on a gold mine if all they did was do a reasonable job of managing the business! Many of the big-name ‘directors’ were poker players, not businessmen. No oversight, no checks and balances, no proper management. Worst of all is the fact that the company was crediting accounts without actually taking the deposits from player’s bank account! One assumes this was initially supposed to be a short-term problem as they tried to line up payment processors, but apparently this situation lasted for months.
PokerStars comes out of this smelling like a rose. The US government could tap a pretty lucrative source of tax revenue if they regulated the market (online poker sites subject to oversight, would be required to have a certain percentage of player funds on hand at all times, required to segregate player funds from company funds, etc).
Well, presumably there’s still some money in there, and given the relatively short time frame involved most of the money that’s gone is likely to be recoverable (unlike with, say, Madoff, where most of the money had been spent).
Chronos
September 25, 2011, 5:39pm
28
That’s OK, “ATM” by itself is already redundant.
RickJay
September 25, 2011, 8:44pm
29
GameHat:
FTP’s big crime seemed to be having far more in liabilities (potentially owed to players should they cash out) than they had in cash.
How is this any different than the stunt the banks have been pulling for years?
The simple answer is that a bank never lends out more money than they have in credits.
They might not have enough CASH to cover the deposits, but the sum total of assets - including money that is owed to the bank in the form of loans - covers the deposits.
FTP wasn’t lending the money out. They were PAYING it out.
FYI: I received this email the the PPA (Poker Players Alliance):
This week’s news from the U.S. Department of Justice alleging that Full Tilt Poker perpetrated a “global Ponzi scheme” that defrauded players has sent shockwaves through the poker community. If true, these allegations detail a massive betrayal of player trust and will cause further hardship for the individual poker player, none of whom have been accused of doing anything wrong. Based on the DOJ allegations, it is clear that the players who deposited money and played on Full Tilt Poker are truly the victims in all of this mess.
The PPA believes that fundamental justice requires that players be repaid their money on deposit, and so we wanted to mention an avenue by which players can ask the DOJ to return funds to them through restitution in the pending case. A federal statute establishes a number of rights for victims of crimes and requires that the government take steps to assist these victims. The DOJ put in place a set of guidelines and created a program, Victims and Witness Services, so that the government could live up to its statutory obligations to victims of crimes. Again, based on the allegations set forth by the DOJ, poker players who deposited money with Full Tilt Poker should be treated as crime victims and afforded the full rights and protections of our government.
If you have been unable to withdraw your money from Full Tilt Poker, you may wish to contact the Victim/Witness Coordinator at the U.S. Attorney’s office and ask that you be afforded the rights of a crime victim as outlined on their website . Let them know that you would like to be kept informed of any major developments in the case (United States v. Full Tilt, et al., 11 C 2564 and United States v. Scheinberg, et al., 10 CR 336) and that you are seeking restitution of lost funds.
You can send your letter or email to:
Wendy Olsen ClancyWendy.Olsen@usdoj.gov ”]Wendy.Olsen@usdoj.gov
The PPA will provide you with information as this situation continues to develop.
The Poker Players Alliance Dedicated to Protecting America’s Favorite Card Game
The Poker Players Alliance is a nonprofit membership organization comprised of poker players and enthusiasts from around the United States who have joined together to speak with one voice to promote the game and to protect poker players’ rights. Visit us at theppa.org
Poking around on the DoJ website, I also came across this :
United States v. Pokerstars et al .*, 11 Civ. 2564 (LBS) (Full Tilt Poker information)
After the amended complaint in* United States v. Pokerstars et al.*, 11 Civ. 2564 (LBS), was filed on September 22, 2011, the United States Attorney’s Office for the Southern District of New York received a number of new inquiries from individuals regarding the recovery of their funds from Full Tilt Poker.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.
FTP was not a ponzi scheme, labelling it that is ridiculous and is a headline grabber.
Mahaloth:
How guilty are Howard Lederer and Chris Ferguson really? I mean, legally they may be guilty, but I wonder how much they knew about the scam. I hope not much, because I like both of them and think they were trying to be a positive force for poker.
Howard more than Chris. All accounts point to Howard having a lot more to do with the day to day running than Chris, although both had management roles. Chris likely let the others run the show and stayed in the sidelines. It doesn’t absolve Chris in any way, of course, but the mismanagement was done by Ray Bitar, Lederer and Rafe First from what I can gather.
nope, the site is pretty much dead as of right now
DragonAsh:
Well, the Fed knows damn well it wasn’t a Ponzi scheme - they only used that in the statement (but not the official documentation) because they knew it would get headlines.
FTP was managed by a bunch of buffoons treating the company like one big personal ATM machine*. I’m not sure it was with specific nefarious intent - never assume evil intent when simple incompetence would suffice. But the level of mismanagement is ridiculous, especially when you consider that they were sitting on a gold mine if all they did was do a reasonable job of managing the business! Many of the big-name ‘directors’ were poker players, not businessmen. No oversight, no checks and balances, no proper management. Worst of all is the fact that the company was crediting accounts without actually taking the deposits from player’s bank account! One assumes this was initially supposed to be a short-term problem as they tried to line up payment processors, but apparently this situation lasted for months.
PokerStars comes out of this smelling like a rose. The US government could tap a pretty lucrative source of tax revenue if they regulated the market (online poker sites subject to oversight, would be required to have a certain percentage of player funds on hand at all times, required to segregate player funds from company funds, etc).
agreed with everything said here.
Apparently, in March of this year, FTP had $60 million capital, a massive player balance hole and the directors were paying themselves $10 million a month, which just shows how ****ing retarded the management of that company were.
I am shocked, *shocked * to find out there are illict activities going on on this website!
Nobody
October 7, 2011, 3:48am
34
I’m sad it got Poker After Dark canceled. It was pretty much the only poker show I watched after High Stakes Poker got rid of A.J. (for no good reason) and then Gabe and put in Norm MacDonald who I found incredibly boring.