Updated 10/2 at 9:09 AM EDT.
The United States Attorney’s Office for the Southern District of New York has released a statement clarifying its position with regard to Full Tilt Poker and players who are owed money by the site. Though the statement makes no commitments, it is remarkable in that it discusses the possibility of the DOJ compensating players directly:
After the amended complaint in United States v. Pokerstars et al., 11 Civ. 2564 (LBS), was filed on September 22, 2011, the United States Attorney’s Office for the Southern District of New York received a number of new inquiries from individuals regarding the recovery of their funds from Full Tilt Poker.
By way of background, in April of 2011, this Office entered into a domain-name use agreement with Full Tilt Poker. That agreement, among other things, expressly authorized Full Tilt Poker to return player funds to players. However, as the September 22 amended complaint alleges, Full Tilt Poker did not in fact have player funds on hand to return to players. Instead, the amended complaint alleges that Full Tilt Poker had, among other things, (a) transferred significant amounts of players’ real money deposits to principals of the company, while (b) allowing many players to continue to gamble, and “win” and “lose,” with phantom credits in their player accounts.
At this time, this Office, together with the FBI and other agencies, is attempting to trace, secure and forfeit as much as possible of the funds derived from operation of the fraud committed by Full Tilt Poker and its board members that is alleged in the amended complaint. The Office is also attempting to obtain and examine the books and records of Full Tilt Poker. Many of those books and records are kept overseas. The return of forfeited funds to victims of the alleged fraud may be possible, but will depend on several factors, including the successful conclusion of the litigation, the amount of funds seized and ordered forfeited by the court, and compliance with other procedures the Department of Justice may eventually establish regarding return of forfeited funds to victims who lost money as a result of the alleged fraudulent conduct.
We cannot predict the duration of proceedings in this case, other than to state that they will last for many months at the least. We will apprise victims of the alleged fraud of future developments as appropriate. General information regarding what is known as “remission” (i.e., return to victims) of funds that have been seized and forfeited is set forth in Department of Justice regulations found at 28 C.F.R. Part 9.
This statement appeared on SDNY’s website only nine days after the government agency amended its civil complaint to include allegations against Tiltware board members Howard Lederer, Chris Ferguson, and Rafe Furst. The amended complaint included a request for forfeiture of all of their assets derived from Full Tilt Poker distribution and profit-sharing payments. It includes very strong language alleging that Full Tilt Poker had robbed its players and was accompanied by a press release calling Full Tilt Poker a Ponzi scheme and, although the DOJ has yet to file publicly any formal charges of theft or running a Ponzi scheme. Subject: Poker later learned that the DOJ had moved to seize assets of the newly charged board members.
In a September 22nd update to its members, the advocacy group The Poker Players Alliance took a similar stance, suggesting that players might want to ask the DOJ to be treated as victims of a crime:
This week’s news from the U.S. Department of Justice alleging that Full Tilt Poker perpetrated a “global Ponzi scheme” that defrauded players has sent shockwaves through the poker community. If true, these allegations detail a massive betrayal of player trust and will cause further hardship for the individual poker player, none of whom have been accused of doing anything wrong. Based on the DOJ allegations, it is clear that the players who deposited money and played on Full Tilt Poker are truly the victims in all of this mess.
The PPA believes that fundamental justice requires that players be repaid their money on deposit, and so we wanted to mention an avenue by which players can ask the DOJ to return funds to them through restitution in the pending case. A federal statute establishes a number of rights for victims of crimes and requires that the government take steps to assist these victims. The DOJ put in place a set of guidelines and created a program, Victims and Witness Services, so that the government could live up to its statutory obligations to victims of crimes. Again, based on the allegations set forth by the DOJ, poker players who deposited money with Full Tilt Poker should be treated as crime victims and afforded the full rights and protections of our government.
If you have been unable to withdraw your money from Full Tilt Poker, you may wish to contact the Victim/Witness Coordinator at the U.S. Attorney’s office and ask that you be afforded the rights of a crime victim as outlined on their website. Let them know that you would like to be kept informed of any major developments in the case (United States v. Full Tilt, et al., 11 C 2564 and United States v. Scheinberg, et al., 10 CR 336) and that you are seeking restitution of lost funds.
You can send your letter or email to:
Wendy Olsen Clancy
United States Attorney’s Office
One St. Andrew’s Plaza
New York, New York 10007
The PPA will provide you with information as this situation continues to develop.
These statements come amidst a flurry of activity related to Full Tilt’s own attempts to repay players itself by finding a new investor. Last Wednesday, Subject: Poker learned of a French group of prospective investors who appeared quite serious. Tom “durrrr” Dwan has recently become very vocal about the current efforts and his views on prior efforts to sell the company since Black Friday. Most recently, the AGCC has revoked the licenses of three of Full Tilt’s four Alderney licensed companies, a move that some people close to Full Tilt have claimed would significantly harm Full Tilt’s chances of repaying players.
Subject: Poker will continue to following the complex story of Full Tilt Poker and the money that it owes to its former customers.
Update 10/2 9:09 AM EDT
Subject: Poker has received confirmation from SDNY that its statement applies to both US players and non-US players.