Wednesday, September 21, 2011

Unbelievable Full Tilt

Some of the details of the amended complaint are truly amazing, even given everything that has happened so far.

From Wicked Chops Poker (with my editorial commentary in blue font):

The Southern District of New York (SDNY) has amended its civil complaint against Full Tilt Poker, expanding the scope to include distribution payments to ownership totaling $443,860,529.89 and specifically naming Ray Bitar, Howard Lederer, Chris Ferguson, and Rafe Furst.

U.S. Attorney Preet Bharara went as far as to call Full Tilt Poker’s operations “…a massive Ponzi scheme against its own players.”

Bharara continued:

“Full Tilt was not a legitimate poker company, but a global Ponzi scheme. Full Tilt 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.” This pretty much says it all in a nutshell.

Key highlights from the complaint include:

■As of March 31, 2011, Tilt owed players from around the world over approximately $390,695,788 but had only approximately $59,579,413 in its bank accounts. (page 72)Yikes!
■Howard Lederer received approximately $37M in distributions as well as another $4M in profit sharing (page 72). What an asshole.
■Chris Ferguson received approximately $25M in distributions. (page 72)Asshole.
■Rafe Furst received approximately $11.7M. (page 73)Ass Hole!
■In all, it claims there are 19 owners of Full Tilt Poker. (page 73)
■An owner, named as “Player owner 1″ but clearly Phil Ivey, is alleged to have received at least $40M in distributions, “as well millions of dollars characterized as loans,” of which $4.4 million have not been repaid. (page 73)Perhaps the biggest asshole of the entire group, given how things have gone down.
■On that note, interestingly no other Full Tilt Poker owners where named in the amendment.
■Owners continued to receive approximately $10M/month even though beginning in the summer of 2010, management/the board of directors were aware of issues in collecting funds from U.S. players. (page 73) Assholes!
■Approximately $130M in U.S. player funds were never collected due to payment processing issues. (page 74)This is one of the most unbelievable statistics of the entire sordid full tilt affair, showing just how ineffectively run the company was. They had just $59 million in their accounts, and $395 million of players' funds, but failed to actually collect a staggering $130 million of that moneys. Unreal these clowns.
■The amendment claims that Tilt was “extremely insolvent” by March 2010, however owner distribution payments continued as late as April 1, 2011. (page 74)
■After 4/15, Tilt continued to accept funds although it had worldwide liabilities of over $300M. (page 75)Assholes.
■In an internal e-mail on June 12, 2011, Ray Bitar expressed concern that a company announcement regarding lay-offs and the Board (including himself) being replaced would be seen as bad news (which we find unbelievable–as most would’ve considered it great news), which in turn would cause a “new run on the bank,” adding that “it could be a huge run” and that “at this point we can’t even take a five million run.” (page 75)
■Any property, including money, used in [an illegal gambling business] may be
seized and forfeited to the United States–or better put–the accounts assets of Howard Lederer, Chris Ferguson, Ray Bitar, and Rafe Furst would be gonzo. (page 77)

We can only hope these pigs all go to jail for a long, long time. Which sounds to me like a very distinct and realistic possibility given the above.

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