Internet Gaming And The Fall Of Full Tilt Poker

James McManus at Grantland:

On September 20, Bharara raised the stakes even higher. He amended his original complaint to allege that Tilt's board of directors defrauded players by misrepresenting that their funds were available for withdrawal at any time. Then came the kicker: They'd used those funds to pay themselves $443,860,529.89. "Full Tilt was not a legitimate poker company, but a global Ponzi scheme," he said. "Insiders lined their own pockets with funds picked from the pockets of their most loyal customers while blithely lying to both players and the public alike about the safety and security of the money deposited with the company." He alleged that between April 2007 and April 2011, Bitar received about $41 million, Lederer $42.8 million, Furst $11.7 million. Ferguson was allocated $87,486,182.87 in distributions, of which he'd received about $25 million. The other $260 million had been dispersed among owners with fewer shares. Most of the money had allegedly been transferred to accounts in Switzerland and other overseas banks, and Bharara released the account numbers. He said the company had faced a growing shortfall in 2010 because it was unable to collect funds from U.S. players. To maintain its "safe and secure" image, it credited players with about $130 million it had never actually received. When players put the phantom funds into action and inevitably lost part of them to opponents in other countries, a massive shortfall developed. Bharara claimed the practice continued even after April 15, and that in June, Lederer and Bitar reported to fellow owners that there was only $6 million on hand, with global liabilities of more than $300 million.

That'll make me pay attention.