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The Southern District of New York (SDNY) has amended its civil complain 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.”

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)
• Howard Lederer received approximately $37M in distributions as well as another $4M in profit sharing (page 72).
• Chris Ferguson received approximately $25M in distributions. (page 72)
• Rafe Furst received approximately $11.7M. (page 73)
• 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)
• 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)
• Approximately $130M in U.S. player funds were never collected due to payment processing issues. (page 74)
• 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)
• 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)
• Also, ownership percentages for the four Board members were listed as Ferguson (19.2%), Lederer (8.6%), Bitar (7.8%), and Furst (2.6%).

If all of the above allegations are true, then we don’t see how there’s a chance any investment firm or individual would help keep Tilt alive. The company is done.

We’ll be updating this post with information and analysis as we read through the massive amendment. For now, read in full here.

UPDATE: We’ve been asked about why a fifth board member wasn’t named and could that person possibly have “rolled” and provided the SDNY with all of the listed case information. However, the “fifth” board member left the board a couple of years ago and they never replaced him.

UPDATE II: We’ve been asked by many people the whereabouts of Lederer, Ferguson, and Furst. As far as we know, Lederer is still in Las Vegas. Ferguson we don’t know. Furst moved to Mexico last month. And Bitar, of course, is still in Ireland.

Tagged as: Black Friday, Chris Ferguson, featured, Full Tilt Poker, Howard Lederer, Poker News, Rafe Furst

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