Full Tilt Poker is Accused of being a Ponzi Scheme

The US Department of Justice has filed a revised civil action against more than 20 founders, owners and shareholders of Full Tilt Poker and one of its management companies Tiltware.

The new revised accusations that are added to all previous accusation of banking fraud and violating the Unlawful Internet Gambling Act (UIGA) of 2006, accusing the online poker company of being nothing more than a Ponzi Scheme that paid over $400 million to its owners and professional players it sponsored out of player accounts.

Back in April 2011 the US Department of Justice seized the dot.com domains of several large online poker rooms that were offering their services to US residents in defiance of US federal laws. At the time indictments filled against the owners and founders of those poker rooms.

All other indicted poker rooms refunded US player funds and have worked out or are working towards agreements with the US Department of Justice. However Full Tilt Poker has not paid back US players, had its two major interactive gaming licenses suspended and has since ceased its global operation pending license hearings, creating a situation where international players are also unable to access the funds in their player accounts.

All reputable online gambling businesses that hold a valid gaming license are required by the terms of their license to hold players funds in separate accounts from the accounts that manage the company’s finances.

According to prosecutors Full Tilt Poker failed to do so and in fact was using player funds that players deposited in their player accounts in order to fund their poker playing, to pay for winnings of other players and offer generous payments to board members and professional poker players it sponsored.

US Attorney Preet Bharara claims that Full Tilt Poker was “not a legitimate poker company, but a global Ponzi scheme” that “failed to protect player funds as promised” and according to its license terms.

As things stand now it appears that Full Tilt Poker only has $60 million left in its bank accounts, while its debt to players is $390 million.