Full Tilt Poker Lawyer Refutes Ponzi Scheme Allegations
By Renee | September 28, 2011
In a statement made to Reuters on Wednesday, Washington-based attorney Jeff Ifrah, who represents Full Tilt Poker, has rubbished the US government’s allegations that Full Tilt Poker was engaged in running a global Ponzi scheme.
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While admitting that Full Tilt Poker made some mistakes, the lawyer said that there is absolutely no evidence supporting the US government’s claim that the online poker giant ran a Ponzi scheme.
On Tuesday, the US government levelled a new allegation against Full Tilt Poker that its directors pocketed over $440 million after cheating its players. This is in addition to the charges of illegal gambling, bank fraud, and money laundering that the Department of Justice (DoJ) levelled against FTP in April. In connection with its latest allegations, the US government has sought that all FTP assets be seized by the government.
It may be recalled that the US federal government cracked down on Full Tilt Poker, Absolute Poker, and PokerStars on April 15 this year, a day commonly known as the Black Friday of online poker, seized their domain names and arrested their CEOs. According to the US indictment of April, 11 people associated with Full Tilt Poker were charged with illegal gaming, bank fraud, and money laundering, and on Tuesday, the federal government added the charges that FTP was involved in a giant global Ponzi scheme, cheating its players of millions of dollars.
The operators of a Ponzi scheme use funds supplied by new investors to pay existing investors till the funds stop flowing in and the scheme dies a natural death. Explaining the term, Prof. Daniel Richman of Columbia Law School says that a Ponzi scheme refers to the act of receiving funds and not paying them back, but sustaining them through future deposits.
The prosecutors say that Full Tilt Poker defendants deposited these funds in accounts at Isle of Man and Switzerland. They also claim that Full Tilt Poker continued running the Ponzi scheme outside the US following the events of April although it lacked the required funds to pay back its US players.
In June, US poker players proposed to jointly sue Full Tilt Poker for failing to refund them, in which case Jeff Ifrah might step down from his position as the legal representative of Full Tilt Poker and its board of directors. Last month, he had stated that to continue as FTP’s attorney “would result in an unreasonable financial burden on our law firm.”
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