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Full Tilt Poker was a Ponzi Scheme, Stole $444M

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By Stephanie Rabiner, Esq. on September 21, 2011 6:50 AM

Is Full Tilt Poker a Ponzi scheme?

New allegations levied by federal prosecutors assert that the online poker company operated as a "global Ponzi scheme," stealing $444 million from unsuspecting players.

Already charged with a host of financial crimes, a closer look at Full Tilt's finances suggest that player funds were partially used to finance high executive salaries.

Prior to being shut down in April, Full Tilt Poker had promised users that their winnings were being kept in untouched accounts. A final accounting has the company owing players $390 million.

Full Tilt only has $60 million in the bank.

Further evidence of a Full Tilt Poker Ponzi scheme include the following evidence:

  • Lies about the difficulty of collecting funds
  • Crediting of accounts with "phantom money"
  • No protection of player funds
  • Mingling of company and client accounts
  • Multi-million dollar executive salaries
  • Millions in payments to professional poker players

It's unlikely that these new allegations from The Wall Street Journal will change the trajectory of the government's case.

Full Tilt Poker and two of its executives have already been charged with money laundering, bank fraud and illegal gambling. A close look at the Justice Department's complaint indicates that the only new charge is theft.

The company's punishment--asset forfeiture and fines--will likely remain substantially similar should it lose the case.

And as for the victims of the alleged Full Tilt Poker Ponzi scheme? They may receive a portion of those assets, but nothing is guaranteed.

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