DOJ Releases Statement about FTP (Updated)

September 29, 2011 - 1:43 PM EDT
By

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
Victim/Witness Coordinator
United States Attorney’s Office
One St. Andrew’s Plaza
New York, New York 10007
(866) 874-8900
Wendy.Olsen@usdoj.gov

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.


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45 Responses to DOJ Releases Statement about FTP (Updated)

  1. Ryan
    September 29, 2011 at 1:58 PM EDT

    Noah, why do you think the DoJ is ignoring the UB situation? They seem to be forgetting that the owners did virtually the same thing in both situations.

    At least they are going after FTP but amazing that the Cereus owners are being let off the hook here.

    • Noah Stephens-Davidowitz
      September 29, 2011 at 2:12 PM EDT

      I’m not really sure.

      It’s possible that they’re not ignoring it, but are working on it in secret. You can see, for example, in our explanation of the civil complaint (which desperately needs updating) that lots of documents are still under seal.

    • James
      September 29, 2011 at 4:23 PM EDT

      All the UB players got their money back. Thats why the DOJ have not gone after UB

      • ManInBlack
        September 29, 2011 at 7:51 PM EDT

        Bullchit. UB players have not received a dime back yet. Hell I have money tied up on there. They just disappeared.

      • dan michalski
        October 3, 2011 at 12:59 PM EDT

        I’m pretty sure UB players got nothing more than some promises of getting money back. I’m sure Noah will correct if I am wrong … but UB honchos seem to be on the full-on run, while poker players scream little about them because with UB it’s more a matter of — uh duh, of course, shame on me, i shoulda known better?

        • Noah Stephens-Davidowitz
          October 3, 2011 at 3:40 PM EDT

          Money has been slowly trickling out of UB/AP in $250 or $500 increments for non-US players. I think some people have managed to get a couple thousand off like that.

  2. Patrick Stern
    September 29, 2011 at 2:04 PM EDT

    “Subject: Poker will continue to following the complex story of Full Tilt Poker and the money that it owes to its former customers.”

    Thank god. Don’t think I’ll make it without you guys.

  3. Cameron
    September 29, 2011 at 2:06 PM EDT

    “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.”

    Just reading that over and over again is enough to make you want to murder somebody. Good informative article though. You’ll have to understand why I’m not completely ravaged with happiness and excitability, because if we do get paid, it’s going to be a long time.

  4. hansolobp
    September 29, 2011 at 2:19 PM EDT

    Noah,

    is it significant that the license of Orinic Ltd. was not invoked but only suspended (3 other licences from 3 licensees have been revoked)? I´ve read some rumors that this may be a “loophole” for potential (french) investors as well as for the AGCC.

    • Noah Stephens-Davidowitz
      September 29, 2011 at 2:22 PM EDT

      It’s really not clear because it’s not at all clear why FTP keeping any license is of any use to future investors since licenses aren’t supposed to be transferable.

      • hansolobp
        September 29, 2011 at 9:01 PM EDT

        Noah, might it be a possibility that the investors are aming for some kind of low quote of the percentage of debts that they would have to pay back to the players if a “rebranded” Pokerroom with a ne w managemennt using the software of FT, some form of Rush Poker and the available information about FT´s old playerbase will be (re-)opened? So a transfer of the license to a “completly new” company may be avoided, as well as a full pay-back to the players both in the US and internationally.

  5. Cameron R
    September 29, 2011 at 2:27 PM EDT

    Noah,
    Great stuff as always. Would you recommend Full Tilt players contact the Victim/Witness Coordinator of the U.S. Attorney’s office? I haven’t done this yet, but maybe I should.

  6. ben
    September 29, 2011 at 2:35 PM EDT

    if it comes to DOJ paying it will take like 5 years.

    • The truth
      September 29, 2011 at 8:29 PM EDT

      They have to make intrest on your money, or wait until they de-value the currenscy more..

  7. Poker Expats
    September 29, 2011 at 2:45 PM EDT

    Great work. Thanks for keeping us informed.

    Typo in the last line: “Subject: Poker will continue to following…”

  8. Rant2112
    September 29, 2011 at 2:47 PM EDT

    I predict that the DOJ will pay out the seized funds just after internet poker is legalized in the US. Perfect timing for the money to go immediately into legal US accounts.

    • Jim Merryman
      October 2, 2011 at 2:38 PM EDT

      what he said..

  9. James
    September 29, 2011 at 2:52 PM EDT

    Can you help clarify for me, as a player from the UK, presumably any action on behalf of the DOJ is only beneficial to players who are US citizens. Now that it is most likely FTP will file for bankruptcy, what steps do players from the rest of the world need to take?

    • Nicolas
      September 29, 2011 at 4:35 PM EDT

      This is an important question for a lot of us. Same goes for the PPA statement, all of it is only aplicable to US citizens right?

  10. Bobby
    September 29, 2011 at 3:24 PM EDT

    Seems to me that if the DOJ has enough seized FTP funds to pay the players, then FTP would have been able to pay the players if the DOJ didn’t seize the funds. Seems to me the players plight is caused by the DOJ.

  11. ihtards
    September 29, 2011 at 3:39 PM EDT

    BLA,BLA,BLA,BLA….We aren’t going to see a dime. Period. And as a non-usa player I just have to say: FU DOJ, FU USA.

    • James
      September 29, 2011 at 3:59 PM EDT

      Seems to be the general consensus. I’m out 40k so happy days ;)

    • JohnnySep
      September 29, 2011 at 5:18 PM EDT

      The DOJ didn’t steal your money and not tell you that what you were playing with what was essentially Play Money

      • James
        September 29, 2011 at 7:54 PM EDT

        Judging by your grammatical prowess Johnny, you should send the DOJ your CV asap!

    • ManInBlack
      September 29, 2011 at 7:53 PM EDT

      ihtards- you foreign players had a chance to withdraw your funds after Black Friday, and did not. so that is your own fault

      • xyz
        September 30, 2011 at 2:40 AM EDT

        its just untrue. i wanted to withdraw, but couldnt.

    • Mike
      September 30, 2011 at 12:48 PM EDT

      no FU to FTP? lol

  12. OmgDurrrreddd
    September 29, 2011 at 4:45 PM EDT

    Whats the chance now anything happens? Also, are they planning another site. If you were in the player shoes for sign cash $ whats your move Noah?

  13. fisherfolk
    September 29, 2011 at 4:58 PM EDT

    If the DOJ wins and gets to keep the money, the bankruptcy court will just take the money anyway and distribute through the normal claims process. Its nice they are talking about being on the players side, but there is a lot of bs go through. Min 2 years before any distributions

    • The truth
      September 29, 2011 at 8:33 PM EDT

      If they were on the PLAYER SIDE in this they wouldnt of did this on black friday…

      Yes FT did some shady things.. but if they were to operate as normally.. they could of overcame this.. But DoJ seen a perfect oppurtunity to get some CASH they despererly needed..

      They built the case for awhile and knew the best time to take them down… If they did this 3 months before or 3 months after.. FT may of been able to pay thier customers off..

      Thnak god i played at stars.. I miss my tourneys :)
      PokerStars i have so much respect for that company

  14. chris
    September 29, 2011 at 5:47 PM EDT

    Watching the day to day FT news is a definite emotional roller coaster ride. I have $106,000 locked up and based upon my interpretation of this article it does not seem like I’ll be seeing the money in anytime soon at all. I’ve already used my “one time” but I’m really hoping this all works out for the best and ALL players get back the money they are owed.

    Chris D
    formerly known “thed3ntist”

    • James
      September 29, 2011 at 7:48 PM EDT

      haha yeh nice score…well done getting half out!

    • ManInBlack
      September 29, 2011 at 7:55 PM EDT

      here you can have my “one time” i havent used it yet

  15. Mpethybridge
    September 30, 2011 at 12:04 AM EDT

    If the DOJ treats us as victims and intends to allow us to use the remission process to recover some or all of the funds that are ultimately forfeited, there is no reason I am aware of that would exclude non-us players from recovering.

    Phrased differently, I am pretty sure the remission statute allows non-us players to recover on the same basis as us players.

    I’ll check the statute and post a correction here if I am wrong.

  16. Mpethybridge
    September 30, 2011 at 12:12 AM EDT

    I just read the remission statutes and regulations. They allow remission to “any victim” without limiting that phrase in any way based on citizenship or nationality.

    I think it is safe to say non-us players will have equal access to any funds ultimately forfeited.

  17. Tomas
    September 30, 2011 at 8:59 AM EDT

    It´s frustrating that UB/AP seems to get away from the whole situation. feels like people in the poker community think that they are doing payouts regularly. Im still waiting for my first payout, been waiting for 5 month and I´m a swedish citizen as well.

  18. katpoker
    September 30, 2011 at 11:46 AM EDT

    I’m so curious when Ray Bitar set up the Swiss Bank account? Was it recently? Or was it closer to 2004? Was taking players funds premeditated?

    Why do people perceive Tom Dwan as a good guy when all he is offering to do is return the $1+ million he borrowed from FTP?

    • joejoe
      September 30, 2011 at 9:06 PM EDT

      He’s returning the 1m+ he was paid for being a sponsored player. Plus some additional sum that was borrowed (because high stakes cash is super swingy and it doesn’t make sense to keep that much in cash).

  19. Zinzan
    September 30, 2011 at 12:09 PM EDT

    I don’t even know my exact balance on Full Tilt. Is there any way to find that out now? I had 4 failed withdrawals last August/September, and decided (unfortunately) to just leave it for a while.

  20. allwind
    October 2, 2011 at 3:31 AM EDT

    Many of us non us players ordered withdrawals after BF. We waited a long time. Then the license was put on hold. We are still waiting.

    The argument that “non us players had the chance to withdrawal” does not hold. Neither of us not getting paid is not fair.

  21. jaidee
    October 2, 2011 at 2:25 PM EDT

    Can you give the updated part a different colour. I dont think people want to read the whole thing again. I still have not find it

    • Noah Stephens-Davidowitz
      October 2, 2011 at 11:03 PM EDT

      It’s on the bottom and marked update in bold.

  22. Tom
    October 2, 2011 at 5:13 PM EDT

    That would be great if the DOJ paid the players.
    For those players who never paid taxes for the past 5 years, get ready for a major tax bill when the DOJ shares the info with the IRS.

  23. Jerry
    October 2, 2011 at 6:33 PM EDT

    Big respect to Noah from Australia for keeping us informed.

  24. Jeff
    October 2, 2011 at 8:35 PM EDT

    As a non US player I was able to withdraw after black Friday, there would be many non US players in a similar situation, should a liquidator be appointed they should request those funds to be returned for the good of all creditors.

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