Fult Tilt Poker or Full-Tilt Ponzi Scheme? Chris "Jesus" Ferguson Indicted Named in Legal Action.


[Former Reasoner Radley Balko talks to Jesus Ferguson and Andy Bloch (pictured) about the politics of online poker. Date: April 1, 2008]

The Wall Street Journal reports:

The U.S. Justice Department on Tuesday accused poker celebrities Howard Lederer and Christopher Ferguson among other executives of a major poker website of defrauding poker players out of more than $300 million.

The U.S. Attorney in the Southern District of New York filed a motion Tuesday to amend an earlier civil complaint to allege that Mr. Ferguson, Mr. Lederer and two other directors for the website, Full Tilt Poker, operated what the Justice Department says was a Ponzi scheme that allowed the company to pay out $444 million to themselves and other owners, which included other famous poker players.

In the motion to amend the complaint, the government alleges Full Tilt executives misrepresented to the website's players that the money the company was supposed to be holding in player accounts was safely held when it was actually being used for other purposes, including payments to owners.

The distributions to the owners continued even as funds to pay out creditors—the poker players—dwindled because government investigators had made it increasingly impossible to move player money into company-affiliated bank accounts, the government says.

"Full Tilt was not a legitimate poker company, but a global Ponzi scheme," said Preet Bharara, U.S. Attorney for the Southern District, in a statement….

An attorney for Mr. Ferguson didn't respond to requests for comment while attempts to reach Mr. Lederer on the phone weren't successful.

Hope it's not true, for all involved. We'll update the story as more becomes known. Hat tip: Tim Clark of the great mag Government Executive.

Reason on online gambling.