The Justice Department on Tuesday accused a major poker website of operating a “massive Ponzi scheme” and defrauding players of more than $300 million.
According to prosecutors, Full Tilt Poker paid out more than $440 million to its owners and board of directors but did not retain enough money to repay players.
“Full Tilt was not a legitimate poker company, but a global Ponzi scheme,” said Preet Bharara, U.S. attorney for the Southern District of New York. Bharara said Full Tilt “cheated and abused its own players to the tune of hundreds of millions of dollars.”
The Justice Department filed the new charges as an amendment to a prior complaint against the poker website.
The website sent emails to players reassuring them that their money was kept separate from the company’s operating accounts, according to the complaint. But despite those reassurances, prosecutors say that by March 31, Full Tilt owed about $390 million to its players around the world and had only $60 million in its bank accounts.
The FBI shut down three of the largest poker websites — PokerStars, Full Tilt and AbsolutePoker — in an April crackdown on illegal online gambling.
The government is seeking penalties and forfeitures from members of Full Tilt’s board, including Raymond Bitar, Howard Lederer, Christopher Ferguson and Rafael Furst.