Full Tilt Poker has not been a stranger to lawsuits over the last couple of years, but the potential legal trouble it may be facing soon is a whole other animal.  According to an article in Sunday’s Financial Times, a federal grand jury in Manhattan is investigating the world’s second largest online poker site as well as several of its key players.
According to a subpoena issued to a yet-to-be-named witness, the probe will determine whether or not U.S. gambling and money laundering laws have been violated.  The Financial Times article names Chris “Jesus” Ferguson and Howard Lederer as two members of Team Full Tilt being investigated.  Other members of the team, but who were not mentioned in the article, are Phil Ivey, John Juanda, Phil Gordon, Allen Cunningham, Mike “The Mouth” Matusow, Jennifer Harman, Erick Lindgren, Andy Bloch, Erik Seidel, Gus Hansen, Patrik Antonius, and Tom “durrrr” Dwan.  While the article did not explicitly name the company, it said that “a software company with ties to Full Tilt” was included in the investigation.  This company is likely Tiltware, the software and marketing company for Full Tilt Poker.  Ray Bitar is Tiltware’s CEO.
The U.S. government has gone after online gambling firms and their executives in the past, but this appears to be the first time that a poker-only company was the subject of an investigation.  The U.S. Department of Justice has interpreted the Wire Act of 1961, which prohibits sports betting over telephone lines, to apply to all gambling over the internet, regardless of whether phone lines are used.  The U.S. Fifth District Court disagrees, having ruled that the 40 year-old law only applies to sports betting.
The Unlawful Internet Gambling Enforcement Act (UIGEA), passed in 2006, attempted to put more teeth into anti-online gambling laws, but it did not make anything else illegal that was not already illegal.  The primary aim of that law was to curb the flow of funds from U.S. financial institutions to online gambling sites.
One of the world’s foremost experts on international gambling law, Professor I. Nelson Rose, told the Financial Times, “They (the U.S. Department of Justice) are waging this war of intimidation.  There are not a lot of good statutes, so they go after high-profile targets and try to intimidate everybody.”
Because Full Tilt is legally licensed by the Alderney Gambling Control Commission in the British Channel Islands, the U.S. government may have hard time gaining the cooperation of foreign authorities when it comes to nabbing the company on illegal gambling charges.  If any evidence of money laundering can be produced, however, that may get officials from other countries on their side.
As noted earlier, Full Tilt Poker has had its share of legal issues.  Former Full Tilt team member Clonie Gowen filed suit against the site in 2008, claiming that she had not been compensated for promoting the site at live and televised events as far back as 2004.  She also claimed she was promised a 1% stake in the site, which her lawyers estimated to be worth $40 million.  Two months ago, the case was dismissed.
In September 2009, former Full Tilt employee Jason “JDN” Newitt filed a lawsuit against the company claiming that he was unfairly terminated and that his payments stemming from his ownership stake in the company were halted.  A third lawsuit came in October 2009, when Full Tilt customers Lary “pokergirl z” Kennedy and Greg Omotoy sued Full Tilt after the site banned them on suspicion of being bots and confiscated over $80,000 from their accounts.  The two also accused Full Tilt of fraud, racketeering, false advertising, libel, and slander.

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