Full Tilt Poker Lawyers Respond to New Allegations

Full Tilt Poker attorneys vigorously challenged the U.S. Justice Department’s assertion that the company was running a “Ponzi scheme,” saying that the term is entirely inaccurate to describe what occurred at the failing poker site.

While lawyers for the company rejected the use of the word ‘scheme’ in describing Full Tilt Poker, even they were quick to admit that there were serious issues at the company.

"While the government has obviously taken issue with the underlying activities of FTP, under any reasonable interpretation, the world-wide operations of the online cardroom are not a so-called Ponzi scheme," said attorney Iam Imrich, according to the Wall Street Journal.

“A Ponzi scheme requires an investment vehicle in order to receive a certain rate of high return,” said Jeff Ifrah, attorney for CEO Raymond Bitar. “None of those things happened here. Maybe it was mismanaged.”

The statements come on the heels of amendments made to the civil complain against Full Tilt Poker, which accuses FTP’s “board of directors” of paying themselves and other part-owners as much as $444 million while not maintaining a sufficient balance to cover their players’ account balances. According to the complaint, more than $300 million may be owed to Full Tilt Poker players worldwide, while as much as $160 million might belong to American players alone.

The new complaint also included a wealth of information on the alleged finances of Full Tilt Poker. According to information from Subject: Poker, the complain states that Bitar and Howard Lederer have both received over $40 million in dividends from the company, while Chris Ferguson has made around $25 million, and Rafe Furst has personally earned at least $11 million. In addition, Ferguson is allegedly owed another $62 million from FTP. Ferguson is listed as owning 19.2% of the company, while Bitar, Lederer and Furst are also mentioned as having significant ownership stakes.

The complaint also mentions a “Player Owner 1” who earned about $40 million in dividends and owes $4.4 million in outstanding loans to the site. Subject: Poker claims that this individual is “almost certainly Phil Ivey.”

The complaint also makes it clear that FTP had failed to have funds equal to the amount of player balances for some period of time before Black Friday. While this alone would not make the site insolvent – as has been pointed out by others, banks do not keep funds on hand to cover all accounts, either – it may well have opened the site up to the potential for problems, and creates a sharp contrast with PokerStars, which did retain player account funds in a segregated account that was untouched, allowing them to pay their American players almost immediately after Black Friday.