NEW YORK (Reuters) – U.S. prosecutors accused poker website Full Tilt Poker on Tuesday of running a Ponzi scheme in which the company's owners and board members paid themselves nearly half a billion dollars while defrauding players.
The allegations were filed in a proposed amended civil complaint in Manhattan federal court, five months after a criminal indictment was unsealed on April 15.
That indictment accused three Internet poker companies -- Full Tilt Poker, Absolute Poker and PokerStars -- and 11 people, including Full Tilt director Raymond Bitar, of bank fraud, illegal gambling and money laundering offenses.
"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 office of Manhattan U.S. Attorney Preet Bharara said in a statement.
Bharara said: "Full Tilt was not a legitimate poker company, but a global Ponzi scheme." A Ponzi scheme is usually one in which early investors are paid with the money of new clients, but collapses when funds run out.
The U.S. Attorney's previous civil complaint did not contain allegations of the company defrauding players or owners taking payments improperly.
Representatives of Full Tilt Poker could not immediately be reached to comment on the amended complaint, which has yet to be approved by a U.S. District Court judge. This type of filing is usually approved as a formality.
The prosecutors said Full Tilt Poker's board of directors, including Bitar, Howard Lederer, Christopher Ferguson and Rafael Furst, defrauded players by misrepresenting that their funds in accounts were safe, secure and available for withdrawal.
The case is USA v Pokerstars, et al, U.S. District Court for the Southern District of New York, No. 11-02564.
(Reporting by Grant McCool, editing by Gerald E. McCormick)
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