Fulltilt - Online poker site a 'global Ponzi scheme'
International online gambling site Full Tilt Poker
stole $US440 million ($431.29 million) from players around the world in a Ponzi scheme used to pay lavish fees to board members, US prosecutors say.
Full Tilt "defrauded players by misrepresenting that their funds on deposit in online gambling accounts were safe, secure, and available for withdrawal at any time", the US Attorney's office for Southern Manhattan said on Tuesday.
"In reality, Full Tilt Poker did not maintain funds sufficient to repay all players, and in addition, the company used player funds to pay board members and other owners more than $440 million since April 2007."
The senior prosecutor, US Attorney Preet Bharara, said the site's top figures, including famed poker champions Howard Lederer and Christopher Ferguson, "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 with the company".
In a classic pyramid scheme, gamblers were given the impression that they still had money deposited and were allowed to keep gambling, even when all that remained were "phantom" funds, prosecutors said.
The company ended up owing $US390 million worldwide.
"Full Tilt was not a legitimate poker company, but a global Ponzi scheme," Bharara said.
Full Tilt Poker was first sued by federal authorities in April as part of a broader crackdown on online gambling, which the Justice Department says is illegal.
The suit was revised and refiled on Tuesday in the still developing investigation.
According to The Wall Street Journal, Full Tilt attracted thousands of players betting billions of dollars annually.