The controversial private hearings between the Alderney Gambling Control Commission (AGCC) and Full Tilt Poker have allegedly entered into a second day, with no reports from either side as to what has occurred.
After both sides issued several statements last week leading up to the September 19 hearing – including an admission that there would be “transparency” in the hearings by the AGCC – the lack of information from the first day of hearings leaves many wondering what will eventually happen. Breaking news this morning could be having an impact on the proceedings, as the U. S. Department of Justice fired a new salvo in their case against FTP.
Forbes.com is reporting that the leader of the fight from the DoJ’s Southern District of New York, Preet Bharara, has issued new claims against FTP. Bharara filed papers in court that allege that Full Tilt Poker improperly used funds of online poker players to pay members of its board of directors, implicating two members of Team Full Tilt along with owner Ray Bitar. Bharara announced the filing Tuesday morning of a motion to amend the forfeiture and civil money laundering complaint that was unsealed in April.
Named as alleged co-conspirators in particular were Howard Lederer and Chris “Jesus” Ferguson, but the board of directors was mentioned as the overlying component. It is alleged that, along with Bitar, Full Tilt Poker defrauded poker players by not maintaining funds sufficient to replay players while telling them their funds were safe and available. Bharara is quoted in the Forbes article as calling Full Tilt Poker “a massive Ponzi scheme against its own players” as it paid out to the board of directors $440 million since April 2007.
With these latest charges against the ownership and management of Full Tilt Poker, this could be what is dragging the AGCC/FTP hearings into the quagmire. If the AGCC doesn’t reinstate Full Tilt’s license, the company continues to languish in online purgatory and cannot make any money. This could have an effect on either the current management of the company – or potential investors or new ownership – being able to abide by whatever results come out of the U. S. Department of Justice case and two different lawsuits in the U. S. and Canada.
Furthermore, the AGCC is in a difficult position as, if they allow Full Tilt Poker back into full operations internationally, the company may not be prepared for the onslaught of withdrawal requests from international players. This could literally destroy the company outright as, if they cannot pay players at this point, how would Full Tilt Poker handle a mass withdrawal by international players.
Of course, the fall of Full Tilt Poker started with the activities of April 15, when Bharara and the Department of Justice filed fraud, money laundering and UIGEA violations against not only Full Tilt Poker but also PokerStars and the CEREUS Network sites Absolute Poker and UB.com. The charges resulted in all three companies withdrawing from the U. S. market.
Soon afterwards, PokerStars was able to negotiate a deal with the U. S. DoJ to refund money to their customers, resulting in an approximate $150 million in paybacks. It is thought that PokerStars was able to do this because their regulatory authority in the Isle of Man required the company to fully segregate player funds from company money. Full Tilt and CEREUS, however, were unable to pay back their customers because their regulatory bodies didn’t enact regulations to segregate player money from company funds.
Adding into the issues for Full Tilt was the AGCC decision of June to revoke their license that shut the site down for international operation. A July hearing was continued until the hearings this week, allegedly for Full Tilt to find an investor/buyer for the company, but activities on that front have proven to be difficult. With the lack of information from the hearings in London, the AGCC, Full Tilt Poker and especially the players are left to wonder just what the future holds.