Feds call Full Tilt Poker a "ponzi scheme"
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  1. #1
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    Feds call Full Tilt Poker a "ponzi scheme"

    There are a LOT of fans of online poker on CF, so I am really surprised this has not been mentioned already.

    Full Tilt Poker paid board members more than $440 million using funds that it had told its online poker players would be available to them for withdrawal at any time, U.S. prosecutors said.
    Full Tilt Paid Board With Players’ $440 Million, U.S. Says - Businessweek

    Feds accuse Full Tilt Poker of being Ponzi scheme

    IMO, if you play online poker, you are really just asking to be ripped off. There are few protections against this sort of thing.



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    Re: Feds call Full Tilt Poker a "ponzi scheme"

    lederer and ferguson... wonder how that will get played when WSOP finals air. two of the show darlings right in the middle.



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    Re: Feds call Full Tilt Poker a "ponzi scheme"

    They paid me every single time I ever cashed out, usually fairly promptly. Have to say I wasn't surprised though, that when the Feds shut them down, they didn't have all the money on hand and were relying on new players deposits to pay out. Kinda always figured it worked that way.

    The original poster appears to be blaming the poker sites, instead of putting the blame where it truly lies: Gov't prohibition of the sport of poker. Playing on Full Tilt would have never been necessary if it wasn't for Gov't intervention in 2006, when Sen. Bill Frist tacked the UIGEA onto an unrelated port security bill. Before that, we played on Party Poker, which was a publicly traded and regulated company based in England. Prohibition of an American sport like poker, by people who are against personal freedom, is what forced poker players to play on unregulated sites based offshore.

    If anyone in Congress had any sense, they'd legalize it, and we'd all be playing on "Harrahs Poker Room.com" or whatever, getting a W2 each year, and we'd all be buying stock in whatever, legal, regulated, online casino we chose.

    This guy makes a good point:

    This is gambling,” said ex-federal prosecutor James Montana, now a partner in Chicago’s Vedder Price LLC. “People are constantly putting money on deposit. It’s almost a guaranteed cash flow. It’s a little different than your normal Ponzi scheme.”

    And her as well:

    “It’s fundamentally unfair to call this a Ponzi scheme,” said Melinda Sarafa, a New York criminal-defense lawyer who has previously worked on Internet gambling cases.
    “This was a poker business that had a legitimate business model but ran into processing disruptions,” she said. “It’s not clear to me that this was an intentional plan to defraud customers and line pockets.”

    Its not a Ponzi Scheme.


    Last edited by CloneIce; 09-20-2011 at 08:16 PM.

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    Re: Feds call Full Tilt Poker a "ponzi scheme"

    Quote Originally Posted by CloneIce View Post
    They paid me every single time I ever cashed out, usually fairly promptly. Have to say I wasn't surprised though, that when the Feds shut them down, they didn't have all the money on hand and were relying on new players deposits to pay out. Kinda always figured it worked that way.

    The original poster appears to be blaming the poker sites, instead of putting the blame where it truly lies: Gov't prohibition of the sport of poker. Playing on Full Tilt would have never been necessary if it wasn't for Gov't intervention in 2006, when Sen. Bill Frist tacked the UIGEA onto an unrelated port security bill. Before that, we played on Party Poker, which was a publicly traded and regulated company based in England. Prohibition of an American sport like poker, by people who are against personal freedom, is what forced poker players to play on unregulated sites based offshore.

    If anyone in Congress had any sense, they'd legalize it, and we'd all be playing on "Harrahs Poker Room.com" or whatever, getting a W2 each year, and we'd all be buying stock in whatever, legal, regulated, online casino we chose.

    This guy makes a good point:

    This is gambling,” said ex-federal prosecutor James Montana, now a partner in Chicago’s Vedder Price LLC. “People are constantly putting money on deposit. It’s almost a guaranteed cash flow. It’s a little different than your normal Ponzi scheme.”

    And her as well:

    “It’s fundamentally unfair to call this a Ponzi scheme,” said Melinda Sarafa, a New York criminal-defense lawyer who has previously worked on Internet gambling cases.
    “This was a poker business that had a legitimate business model but ran into processing disruptions,” she said. “It’s not clear to me that this was an intentional plan to defraud customers and line pockets.”

    Its not a Ponzi Scheme.
    Well actually technically it is. You're just saying that they weren't defrauding anyone.



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    Re: Feds call Full Tilt Poker a "ponzi scheme"

    I love how ESPN distanced themselves from Full Tilt at just the right time.


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    Re: Feds call Full Tilt Poker a "ponzi scheme"

    Quote Originally Posted by Clark View Post
    Well actually technically it is. You're just saying that they weren't defrauding anyone.
    Semantics I guess. Maybe the definition still fits, but I wouldn't consider it a ponzi scheme if they had no plans of defrauding any of their customers. Lots of businesses rely on a cash flow from customers to make expense payments, and would be in financial trouble and unable to meet all their expenses, if suddenly that cash flow was cut off unexpectedly by an outside entity (in this case, the Federal Gov't).

    This is what happens when Gov't prohibition of what should be a legal sport occurs. There should not be a demand to play at offshore sites, which by their very nature of working outside the rules, often rely on somewhat shady business practices. Poker players should have still been playing at PartyPoker, a publicly traded and regulated company from England, but they were forced to play at other sites, because of the actions of Bill Frist, Jim Leach, and other members of Congress who worked hard to take away the personal freedom to play a sport that was enjoyed by millions of Americans. Or better yet, poker players should be playing on American poker sites... but of course, there is always some people out there who believe they should be able to tell people what they can do with their own hard-earned money, in the privacy of their own home. Now a whole lot of Americans have less money, and alot of crappy Europeans get to keep the money they would have lost to American poker players. Nobody wins in this mess, but the lawyers and freedom haters.



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    Re: Feds call Full Tilt Poker a "ponzi scheme"

    Party Poker was awesome back in 2005. I was clearing 200 a week at least.


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    Re: Feds call Full Tilt Poker a "ponzi scheme"

    I always played on Pokerstars.



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    Re: Feds call Full Tilt Poker a "ponzi scheme"

    Quote Originally Posted by Clark View Post
    Well actually technically it is. You're just saying that they weren't defrauding anyone.
    Sounds like the way Fult Tilt operated, it was basically embezzlement, not a Ponzi scheme per se.

    I always thought what an awesome business model. There was literally no reason to cheat anyone. Scrape a commission off every hand or tourney entry fee. 24/7/265 operations. Limited staff needed, just giant server farms.

    And the ability to hold all the money in interest bearing accounts, plus eventually "taking" money that people forget about in their account.

    Simply no reason to steal.

    Playing gets worse every year. Started on Party Poker, went to Poker Stars. When that was shut off, went to Bodog. Traffic there sucks and money has to be cleared through China.



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    Re: Feds call Full Tilt Poker a "ponzi scheme"

    Quote Originally Posted by Gorm View Post
    Party Poker was awesome back in 2005. I was clearing 200 a week at least.
    It was amazing. That was right when I first played online. The games there were so juicy, I once made the final table of 3 straight tournaments with over 500 people in them in one week (paid off a huge chunk of school and credit card debt that week). After Party Poker left (after the UIGEA was passed in 2006), it was never the same. Games were always way tougher. Makes me sick, thinking about how much I would've won if the Gov't didn't screw it up for all of us.



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    Re: Feds call Full Tilt Poker a "ponzi scheme"

    Quote Originally Posted by ianoconnor View Post
    I always played on Pokerstars.
    You know, I always thought they were more reliable than FullTilt, and had a great selection of games... but the aesthetics of the site just drove me nuts. Don't know why, couldn't get over that. And plenty of others liked that site the best, guess it was just a taste thing.



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    Re: Feds call Full Tilt Poker a "ponzi scheme"

    Luckily I transferred my bankroll from FTP to Stars a few months before Black Friday.

    I left a minimal amount on FTP just to have something in my account. I've given up getting it back. I'm still playing on a smaller network, but not expecting it to last real long.

    As far as being asked to be ripped off I think most people understood that there was a high amount or risk in the sites and the whole industry especially after UIGEA. For people that understood that and kept good bankroll management techniques there was a lot of money to be made though.



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    Re: Feds call Full Tilt Poker a "ponzi scheme"

    Wasn't it Full Tilt that wouldn't give people their money back after they got shut down by the gov't a few months ago? Or was the Poker Stars?



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    Re: Feds call Full Tilt Poker a "ponzi scheme"

    Quote Originally Posted by Bigman38 View Post
    Wasn't it Full Tilt that wouldn't give people their money back after they got shut down by the gov't a few months ago? Or was the Poker Stars?
    I got my money out of Poker Stars. It happened surprisingly quick as well. When I read their disclaimer, thought it might take up to a year, but I think I got it within a month.



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    Re: Feds call Full Tilt Poker a "ponzi scheme"

    Quote Originally Posted by Bigman38 View Post
    Wasn't it Full Tilt that wouldn't give people their money back after they got shut down by the gov't a few months ago? Or was the Poker Stars?
    Feds bust U.S.'s three largest online poker websites - The Denver Post
    The companies, all based overseas, were identified as PokerStars, Full Tilt Poker and Absolute Poker. The indictment sought $3 billion in money laundering penalties and forfeiture from the defendants.
    Looks like they're just seeking to add fraud counts to those involved with the company.


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