The Justice Department has accused one of the largest and most popular online poker sites of running a global Ponzi scheme that defrauded players out of millions, according to a report in Forbes
The complaint filed by the U.S. attorney’s office in Manhattan alleges that four directors of Full Tilt Poker, including celebrity poker stars Howard Lederer and Christopher “Jesus” Ferguson, accepted as much $300 million in online bets and paid out the profits to site owners rather than use it as a payout pool for player members of the site.
“Full Tilt was not a legitimate poker company, but a global Ponzi scheme,” Manhattan U.S. Attorney Preet Bharara said in a statement Tuesday. “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.”
According to the Forbes report, the poker site apparently faced a cash crunch following a federal crackdown on online poker sites in 2010 that also included Absolute Poker and another popular site, PokerStars.
Despite the crackdown, which was focused on interrupting suspected money laundering efforts by online payment processors, federal authorities said Full Tilt Poker continued to credit “phantom funds” to player-member accounts knowing that the credits could not be covered if cashed in.
The federal complaint could set back the gambling industry’s ongoing efforts to ease restrictions on online betting and open up more Internet gaming sites in the United States.
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