1. Home>
  2. Poker News>
  3. Attorneys Defend Full Tilt Poker in Ponzi Scheme Allegation
  • Attorneys Defend Full Tilt Poker in Ponzi Scheme Allegation

    Thursday, September 22nd, 2011 by Nadia

On Wednesday, Full Tilt Poker’s attorneys defended the company against allegations made by the US Justice Department in a civil case. The government had accused the poker company of having run a big Ponzi scheme, which allegedly robbed many players of money. Full Tilt Poker has been charged with taking close to $300 million from its online players.

The attorney for Chris Ferguson, board member and owner of the poker room, stated that the government clearly has an issue with the core activities of Full Tilt Poker. However, according to him, the international operations of the poker room cannot be interpreted as a Ponzi scheme.

Not an Illegal Investment, Just Badly Mismanaged

An attorney of Full Tilt Poker clarified that the issues faced by the poker room are similar to those of a troubled bank. But, that it should not be treated as an illegal investment. The definition provided by the Securities and Exchange Commission for Ponzi scheme states that it is a form of investment fraud. To run a Ponzi scheme, the company would have required a vehicle for investment to secure high return rates, but the poker room did not have this. Also, the activity would comprise of the payment of such returns to current investors from the money that new investors contribute.

The use of the term ‘Ponzi scheme’ in the poker room’s case is quite careless. It is likely to violate rules of professional responsibility in the pre-trial publicity stage. According to the attorney, it is possible that the poker company was mismanaged. The Justice Department did not respond to the attorneys’ comments. In an amended complaint, federal prosecutors do not state that Full Tilt Poker was a fraud. However, it alleges that the board members have become richer by taking millions that online poker players had deposited as betting money.

The allegation against the poker room is the latest development in relation to the Black Friday incident of April 15th this year. In an indictment by a federal prosecutor – against the poker room’s chief executive – the latter was accused of operating a fraudulent gambling company. The prosecutor also claimed that the company was engaged in money laundering activities. Following this, Full Tilt Poker was required to pay $30 billion along with two other poker rooms whose operators too were accused similarly.

Accused Poker Players Suspended by Epic Poker League

The latest accusations against Full Tilt Poker’s players and board members, Howard Lederer and Chris Ferguson, have resulted in the Epic Poker League suspending them. The Standards and Conduct Committee’s chairman stated that the body voted to have both players suspended indefinitely. Any further action taken by the body regarding the players will be based on the Justice Department’s decisions.

Some of the members of the committee are Epic Poker League members and well known poker players Joe Hachem, Andy Bloch, Chad Brown and Eric Baldwin. Another member is Annie Duke, who is also the sister of Howard Lederer. She did not have a say in this issue and was a non-voting member. In its statement against the two players, the committee did not mention the status of another accused player Rafe Furst. A key reason for this could be that he has not qualified in this season for a tour card.

both

both

both

About Us | Contact Us | Disclaimer | Privacy Policy | Site Map

If you are interested in learning more about online poker, try searching on Yahoo, the Open Directory Project, or Bing.