DOJ Moves to Seize FTP Board Members’ Funds

September 23, 2011 - 12:14 PM EDT
By

On September 19, Subject: Poker reported that the US Attorneys office for the Southern District of New York amended the civil complaint originally unsealed on Black Friday to include allegations against three additional board members of Full Tilt Poker, Howard Lederer, Chris Ferguson, and Rafe Furst. Now, Subject: Poker has learned that warrants have been issued to seize the assets of these three men.

The newly named civil defendants, Howard Lederer, Chris Ferguson, and Rafe Furst, along with previously named Ray Bitar, were charged with money laundering allegations in the amended civil complaint. Included in those allegations were dollar amounts that those board members had collected from FTP during their tenure in the form of distribution payments and profit sharing: From April 2007 to April 1, 2011, the DOJ alleges that Tiltware LLC’s owners received approximately $443,860,530 in such payments, including at least $41 million to Ray Bitar, at least $42 million to Howard Lederer, and at least $11.7 million to Rafe Furst. Chris Ferguson was allegedly allocated at least $85 million, but reportedly only received $25 million of that, with the rest of the balance listed as owed to him. The remaining balance of the $ 443,860,530 was disbursed to the other owners.

Subject:Poker can now confirm that the funds specified in that amendment as having been transferred to these “FTP Insiders” were listed for seizure on September 19th. The FBI and other law enforcement personnel have been authorized to take control of any funds in the following accounts:

  • All funds and other property on deposit in account numbered GB81 RBOS 6095 4234087766 held at NatWest, in the name of Raymond Bitar, and all funds traceable thereto;1
  • All funds and other property on deposit in account numbered 7655741861 held at Wells Fargo Bank N.A. in the name of HH Lederer Consulting LLC, and all funds traceable thereto; and
    All funds and other property on deposit in account numbered GB56LOYD30166314010402 held at Lloyds TSB International, Isle of Mann, in the name of Howard Lederer, and all funds traceable thereto;
  • All funds and other property on deposit in account numbered 40039049628 held at Citibank N.A., in the name of Chris Ferguson, and all funds traceable thereto; and
  • Account numbered CH87 0875 5057068400100 held at Pictet & Co Bankers, Switzerland, in the name of Telamonian Ajax Trust, and all funds traceable thereto.

Footnotes

  1. This account belonging to Ray Bitar was already listed in the original criminal indictment unsealed on April 15th.

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73 Responses to DOJ Moves to Seize FTP Board Members’ Funds

  1. BOBBY BRUHOWN
    September 23, 2011 at 12:30 PM EDT

    TAKE THAT HOWARD YOU FIN CROOK PIECE OF TRASH

    • duke
      September 23, 2011 at 1:57 PM EDT

      DOJ needs to audit each of these stooges as they most likely would have siphoned off a lot of funds to keep safe with relatives. Annie Duke should be first in line; sister of Howard L.

      • James
        September 24, 2011 at 8:56 PM EDT

        Well said Duke, search Annie, you know any money she has cant be winnings. Sieze and repay (and put the crooks in Jail)

      • JSpazz
        September 26, 2011 at 8:07 AM EDT

        Do you really think that money is going to return to the hands of poker players

        • Chappie
          September 28, 2011 at 10:47 AM EDT

          Bernie Madoff’s victims got at least some of their money back. There’s no reason to think that we won’t eventually get at least a portion of it. The circumstances are fairly similar, no?

    • FullTiltPonzie
      September 23, 2011 at 4:46 PM EDT

      ROT IN HELL YOU SCUMBAGS!!!!!

    • marketposition@yahoo.com
      September 25, 2011 at 3:42 AM EDT

      Yo Feds….you’d better check out Annie Duke’s Trust “Fluffhead” that has Howard lederer listed as the trustee. Just *might* have some Full Tilt assets in it…including real estate. FYI, Preet Bharara, Fluffhead@aol.com is Annie Duke’s email…that’s the connection.

    • kevin
      September 25, 2011 at 4:26 PM EDT

      why be so happy that the DOJ is now getting these funds – they won’t distribute them back to the players that they are owed but rather to the greedy f’ing american justice system. this is no victory you sheep. anyone that is glad to see this is just bitter and doesn’t realize that the reason players were not reimbursed is entirely due to the DOJ intervention in march/april. people are stupid, and america is run by greedy fucks.

      • Cynical
        September 26, 2011 at 6:57 AM EDT

        +1

      • Dmesh
        September 27, 2011 at 6:32 AM EDT

        So you would prefer that the crooks at FTP who stole our money just get to keep it?

        WTF is your point. I’d rather ANYONE have it than those scumbags.

  2. karim benali
    September 23, 2011 at 1:13 PM EDT

    GIVE THEM LIFE IN JAIL! THAT’S WHAT THE PEOPLE WANT

    25 YEARS BEHIND BARS FOR ALL THE LIES AND STOLEN MONEY FROM HARD WORKING INNOCENT PEOPLE

    LIFE SENTENCE!!!!!

  3. Addicted to Rush
    September 23, 2011 at 1:48 PM EDT

    Are these Bitars personal funds or does this mean that Tilt is done for?

    • Noah Stephens-Davidowitz
      September 23, 2011 at 1:53 PM EDT

      These are personal funds.

  4. Johny
    September 23, 2011 at 2:00 PM EDT

    Why these guys aren’t arrested yet? They have deserved long long years in jail.

  5. Chris
    September 23, 2011 at 2:10 PM EDT

    Wouldn’t it be crazy if the government was actually working for its citizens in this case and gave all the confiscated funds back to the players that were wronged? Although, I fear that the DOJ is using the “victimized players” as leverage to steal $450million…

  6. Jonemann
    September 23, 2011 at 3:15 PM EDT

    I am not familiar wit hthe American Jusice system. Are these funds intended to be distributed to the players? Or would it be common practice that the DOJ keep them? Or is that still undecided?

    • JSmith
      September 25, 2011 at 9:07 PM EDT

      Funds received from a criminal case do not go to victims. Only funds received from a civil case go to victim. That is of course after the lawyers take their 40%.

      • fletch
        December 21, 2011 at 10:01 AM EDT

        The newly named civil defendants.I guess the committed no crime according to the DOJ. They have had plenty of time to investigate.

  7. Dan
    September 23, 2011 at 3:17 PM EDT

    may be we are going to see 1c per dolar after 3 years. Yeyy!

  8. katpoker
    September 23, 2011 at 3:20 PM EDT

    Clonie Gowen was part of the 2004 meeting of Pros that Howard Lederer had in Phil Ivey’s suite at the Golden Nugget. This was where Howard offered 1% of FTP in return for these pros representing FTP.

    3 years later, Howard paid funds to each of these pros with the exception of Clonie. She stated she should have received $250,000 as others had. She filed a lawsuit and Howard said Clonie Who??? Her case was dismissed due to a lack of written contract.

    Has this situation changed? Could a no written contract situation actually protect these pros and limit them to just returning funds they have as outstanding loans with FTP? Jail time would just be limited to the 4 Board members?

    For anyone that thinks this is just mismanagement, the one key issue is that Howard never allowed an audit of FTP accounting by an outside licensed accountant. He knew from the beginning what he was doing and hoped he had enough time for the software to donk off all the players funds to their pros or bots.

    As a reputable company, you live or die by the rake. You never borrow against or commingle players funds.

    • Random Shill
      September 23, 2011 at 4:32 PM EDT

      Fact check. It was reported in Poker News Daily in May 2009 and on CardKing.info earlier this year that Lederer had offered Gowen $250,000 for “past services” and *she* rejected the offer because it was not in line with what other pros had received.

      Her lawsuit against the FT universe of pro/owners and the myriad of companies that constituted FT requested 1% of the entirety of FT’s operation (allegedly, Lederer’s original “Golden Nugget” offer) and her attorneys speculated that a 1% slice in 2009 could be worth as much as $40 million. The case was dismissed with prejudice against the majority of the defendants that she named (the pro/owners and most of the companies)… but it was dismissed without prejudice against Tiltware, Bitar and Lederer. Since those three were dismissed without prejudice, Gowen could re-file her claims against them.

      Recent events would almost certainly lend credibility to her original claims (not just in the court system, but in the eyes of the poker community, as well). However, that’s not all — in June, the 9th Circuit Court of Appeals reversed part of the Nevada District’s original decision which would allow her to reinstate some of the original claims against the three. The end of this story is nowhere in sight, but I like Gowen’s current position: no culpability in the fraud, an adversarial relationship (ergo ‘believable victim’) with the story’s bad guys (Lederer / Bitar), no financial ties that would allow any distributions to be ‘clawed back’, no apparent loans from FT which have to be repaid and a seemingly defensible claim to ownership that could be worth something if her case can be proven and if (more importantly) FT is indeed resurrected by the “French Connection” that only the DOJ, the AGCC, FT’s attorney and S:P’s Diamond Flush are entitled to know the identity of.

      It will eventually make great reading and will no doubt serve as the basis for a modern morality play that will be retold at poker tables for years to come.

      • Ryan
        September 24, 2011 at 10:03 AM EDT

        clonie who? lol

  9. Dan
    September 23, 2011 at 3:21 PM EDT

    If the DOJ doesn’t release all the money seized to players they are a bunch of hypocrites. And sadly is what they are. All these fighting against a “ponzi scheme” will look great in the curriculum of an ambitious USA attorney.

    • katpoker
      September 23, 2011 at 3:53 PM EDT

      they allowed the return of Pokerstars funds to the players, they have set precedence. However, this doesn’t prevent them from forwarding all your personal information to the IRS for audit. Part of the original April 15th filing is that these companies agreed to pass on all information they had on each player.

      • Ryan
        September 24, 2011 at 10:04 AM EDT

        what do u mean they “allowed” how would they have any control over that?!!?

      • Diamond Flush
        September 25, 2011 at 1:57 PM EDT

        They allowed Pokerstars to repay players from PokerStars money, not from seized funds. FTP has always been allowed to repay players as well, but they had no money left, which now everyone knows.
        Please show me where it says in any document you have seen that the companies agreed to any such thing (Passing docs to IRS?).

    • JSpazz
      September 24, 2011 at 12:22 PM EDT

      (sorry delete last comment, accidentally clicked post too early)

      Imo if doj actually goes thru w this there is a high likelihood of them paying out americans and stiffing everyone else. It’s not like theywant to protect the industry

      • LearnedHand13
        September 27, 2011 at 11:46 PM EDT

        How does everyone plan on proving the amounts in their FTP accounts? Are you planning on sending the DOJ a screenshot of the FTP client (that’s all I’ve got) or your bank transactions showing you deposited $15k two days before BF?

        I could be completely wrong about this, but the DOJ is going to prove that FTP and its officers acted like complete jackasses and criminals and also prove that FTP’s record accounting procedures were a complete sham. At that point, do you think FTP’s internal records are going to be trustworthy? Lets say I deposit $50k via wire 2 days before BF and I end up losing it all challenging the regs, what is to stop me from filing for an injunction to stop the DOJ from paying anyone and arguing FTP’s records are incorrect and unreliable and that I really had about tree fiddy.

        I may be just pessimistic right now, but I don’t think its gotten as ugly as it’ll get

    • Diamond Flush
      September 25, 2011 at 1:53 PM EDT

      1.The DOJ didnt seize (yet) nearly enough to make a dent in the over $300mm owed to players.
      2. This was not a “pnzi scheme”
      3. I assume you just forgot the word “vitae” :)

      • fletch
        December 21, 2011 at 10:07 AM EDT

        You’re right it is not a pawnsi scheme. Its misappropriation of trust funds.

  10. Aki Pyysing
    September 23, 2011 at 4:42 PM EDT

    DEATH SENTENCE

  11. Karl V.
    September 23, 2011 at 4:53 PM EDT

    Next should be a full cavity search. I’m talking roto rooter. Don’t stop till you reach the back of their teeth!

  12. Michael Boyle
    September 23, 2011 at 5:03 PM EDT

    In the updated filing from earlier this week (and perhaps in the original version, not sure) depositors are explicitly named “creditors” iirc. This seems to indicate that money they get from the BoD members is expressly intended to help FTP clear its obligations re: player balances. It’s not surprising that they’re not laying it out step by step – one thing at a time.

    I still think that the more money they can get from the BoD the greater the likelihood an investor is going to be interested in stepping in.

  13. Percival
    September 23, 2011 at 6:33 PM EDT

    It was the appropriate thing to do until this whole thing is figured out.

  14. Mike
    September 23, 2011 at 6:55 PM EDT

    How’s it feel to have money you were relying on suddenly inaccessible???

  15. HALOOS
    September 23, 2011 at 7:34 PM EDT

    Wow, I wonder if they’ll still call Howard bubba in jail

    • SnchenNoah
      September 24, 2011 at 2:28 PM EDT

      He will want to do AWAY with that NIC QUICK. He will be like oh no, that was Chris not me..

    • kevin
      September 25, 2011 at 4:32 PM EDT

      can you read? this is in civil court – there is no prison sentence for civil court. sheesh people are stupid.

  16. J. Crowhurst
    September 23, 2011 at 10:56 PM EDT

    Noah, correct me if I’m wrong, but the DOJ is limited to:
    - seizing money in U.S. bank accounts, and
    - obtaining a court order that specific persons (Lederer, Ferguson, and Furst) not deal with specified bank accounts, once served with that court order.

    The person who is given the warrant you’ve linked to might be able to enforce it on the American banks, but it obviously has no force or effect in the Isle of Mann or Switzerland. Since they chose not to pursue door #2 (a Mareva injunction), I don’t believe there is anything stopping Howard from accessing his Swiss bank account (assuming he was so stupid as to not do so already).

  17. katpoker
    September 23, 2011 at 10:57 PM EDT

    With that long hair, Ferguson’s going to get more attention in the big house

    • Ryan
      September 24, 2011 at 10:06 AM EDT

      ROTFL!!!!!!!LOL!!!!!!!!!LOL

  18. katpoker
    September 23, 2011 at 11:29 PM EDT

    I wonder who set up the Swiss Bank account and when??? sounds like it was all premeditated

  19. MomWasRight
    September 24, 2011 at 4:13 AM EDT

    No more High Stakes Poker for Howard and Chris.

  20. Steinway
    September 24, 2011 at 4:47 AM EDT

    Isle of Mann (LOL – these lawyer guys really do teh goodest researches)
    Try “Isle of Man” instead.

    • J. Crowhurst
      September 24, 2011 at 8:58 PM EDT

      It’s confusing… It’s “Mann” or “The Isle of Man”.

      DOJ says “Isle of Mann” in their warrant. Guess that’s another reason why it’s worth less than an equivalent amount of Charmin.

      • Steinway
        September 26, 2011 at 4:09 PM EDT

        That sort code (Howie) isn’t even Isle of Man(n) LOLOLOLOLOLOL
        GL DOJ – maybe use Google nex tim!

  21. Nasty Nate
    September 24, 2011 at 7:51 AM EDT

    Just a little message to Lederer and Ferguson…

    Prepare your anus.

  22. Dom
    September 24, 2011 at 8:31 AM EDT

    Sign the petition sponsored by Siti

    ” Full Tilt Poker to Full Tilt Players ! ”

    at http://www.ipetitions.com/petition/ftp/

  23. Poker Expats
    September 24, 2011 at 11:00 AM EDT

    Is it possible that the DOJ will also go after the defendants’ non-liquid assets, such as their houses? It seems to be common knowledge that Lederer’s house in Vegas is worth a few million, for example.

    • J. Crowhurst
      September 24, 2011 at 9:02 PM EDT

      No, an in rem warrant is only valid in the specific jurisdiction it was issued, except the Southern District of NY has a reciprocal agreement with the Eastern District.

      Las Vegas is outside its scope.

      Check out this page: http://www.usmarshals.gov/process/in-rem.htm

      • Diamond Flush
        September 25, 2011 at 2:13 PM EDT

        This is not true at all.
        You can ask Ray Bitar, who already had multiple houses seized in California or Chad Elie and his new wife, whose Nevada home was also snagged. The warrant just gets transferred to the jurisdiction where the property is located for execution.
        The part you referred to in that link only refers to maritime actions, which obviously this is not.

        • J. Crowhurst
          September 25, 2011 at 10:23 PM EDT

          Any seizure of other assets was done by a completely different process.

          In rem arrest warrants arise out of maritime law, which is why the page I linked to refers to it, and why the warrant itself refers to it:

          “WHEREAS, the Court has reviewed the verified complaint and finds in accordance with Rule G(3)(b)(ii) of the Supplemental Rules for Certain Admiralty or Maritime Claims and Asset Forfeiture Actions (the “Supplemental Rules”), that (1) the Court has jurisdiction to issue this warrant…”

          Warrants issue, or they don’t. They’re enforceable elsewhere, or not. “It only works that way in maritime actions” isn’t how the law works. I’ll take the Marshall’s page at face value.

          Keep in mind another pretty important point here: to seize the house, the money subject to forfeiture has to be traceable into the house. If HL bought the house before the FTP shenanigans, it’s not traceable and therefore not subject to forfeit.

          Keep in mind one more point: to the extent that Bitar’s U.S. holdings have been seized, it’s because he didn’t contest the proceedings because that would have meant coming to the jurisdiction and getting arrested. He appears to be content to remain in Ireland, live off the money in his European accounts, and continue to be in contempt of the Mareva Injunction obtained by the Feds in respect of those accounts back in April.

    • kevin
      September 25, 2011 at 4:36 PM EDT

      vegas property values have decreased by 60%+ in the last year. his house was recently appraised at 325,000.

  24. Zuleykha
    September 24, 2011 at 1:45 PM EDT

    If we have more character than the heads of FTP than we should consider them as innocents until proven guilty. As long as it is not proven what did really happen, it is very cheap to pound on them.
    BTW: I have been a regular on FTP and they owe me money too.

    • katpoker
      September 25, 2011 at 1:05 AM EDT

      Howard pronounced FTP guilty by saying how much they owed players and how much cash they had left.

      • LearnedHand13
        September 27, 2011 at 11:32 PM EDT

        +1

        There are really three interpretations: 1) FTP owners were negligent (liable in civil context if they can pierce the veil); 2) FTP owners acted in reckless disregard (liable in civil & in some cases criminal); or 3) FTP acted with the intent to use player monies held in trust (liable in civil & guilty in criminal).

        As a high percentage owner and director (in relation to the other ownership of individually owned shares), they owe a fiduciary duty to the company to be diligent and prudent in its actions and to not willfully disregard the reality. I guess they could prove that there were no signs and they were merely the face of the site, but I doubt very much that these nits didn’t have their hands in everything.

        They knew or should have known.

  25. robsmith82
    September 24, 2011 at 8:31 PM EDT

    Diamond Flush, how likely is it that we will find out how much is in each of these accounts?

    • Diamond Flush
      September 25, 2011 at 2:20 PM EDT

      That information is not yet publicly available, but it will be at some future time, possibly not until the case is in its final stages. Keep in mind, this is not just a one time shot..the money in any account can change by the minute, but the warrant includes any funds traceable thereto. As soon as we have any definitive information, we will bring it to you.

  26. Dom
    September 25, 2011 at 3:18 AM EDT

    52 have already signed . Sign the petition

    ” Full Tilt Poker to Full Tilt Players ! ”

    at http://www.ipetitions.com/petition/ftp/

    • Dong
      September 26, 2011 at 3:43 AM EDT

      So what exactly is this petition?

  27. Greg
    September 25, 2011 at 8:46 AM EDT

    …and the crooks get caught!

    After Black Friday I switched to Rakefree poker rooms only. Why pay rake when you don’t have to and there are a decent amount of players there. People tend to stick with Fulltilt and Pokerstars because they feel that those poker rooms are more “secure”…but as we have witnessed…”not so much”.

  28. David
    September 25, 2011 at 12:14 PM EDT

    What if Pokerstars are next? The DoJ seems to be continuing its crackdown following black friday as evidenced by the increased allegations and sanctions against FTP. Shouldn’t we (those of us that still have access i.e. europeans) be concerned about keeping balances with PS?

    • Poker Expats
      September 25, 2011 at 6:29 PM EDT

      The DOJ appears to be going in the opposite direction with PokerStars. They’ve actually RELEASED some previously seized funds back to the company. One theory is that PS was able to demonstrate that the released funds weren’t profits from their US operations, and therefore not subject to DOJ seizure.

  29. Phil
    September 25, 2011 at 11:56 PM EDT

    Poker players are greedy…
    If you were in their shoes you would have done the same.

    In there defence, they were very generous to charitable causes.

    • Dmesh
      September 27, 2011 at 6:36 AM EDT

      You obviously had no money on FTP. Also its DEFENSE.

  30. Rob C
    September 26, 2011 at 12:57 AM EDT

    When Howard and Ray fought Clonie in court then had Mr. T arrested the huff, puffed and blew their own houses down. These two cases alone supplied the DOJ enough information and evidence to penetrate whatever ownership scheme they set up. I honestly cannot wait to read Howard’s post prison book on this whole fiasco.

  31. wogerwabbit
    September 26, 2011 at 4:47 PM EDT

    One part of the amended complaint is below:
    “111. The other approximately 19 owners of Tiltware LLC
    received the remainder of the approximately $443,860,530
    distributed. For example, a professional poker player and Full
    Tilt Poker owner (“Player Owner 1”) received at least
    approximately $40,078,646.64 in distributions, as well millions of
    dollars characterized as loans from Full Tilt Poker. At least
    approximately $4.4 million of these loans have not been repaid.”

    This would seem to be Phil Ivey– obvious question is why hasn’t he been charged? Why haven’t they gone after those accounts after identifying them? Has he flipped?

    As to existing player deposits, they are effectively unsecured creditors of a bankrupt foreign entity but may get something after the US Govt. fines/The lawyers/Etc. get theirs. Some court appointed liquidator will be chasing after that $444 million in distributions. Like Madoff, they will go after ANYONE who got ANYTHING from FTP. (that includes the money that was credited to player accounts but was never debited from the US source account). This will go on for years and make for a good book.

    • Noah Stephens-Davidowitz
      September 26, 2011 at 5:04 PM EDT

      So far they’ve only gone after the board members (and Nelson Burtnick, who handled most of the payment processing and was one of the original indictees).

      • wogerwabbit
        September 26, 2011 at 5:18 PM EDT

        OK, as a first step that makes sense, just as the first legal step was civil complaints with the criminal complaints surely to follow. Seems to me as a legal matter that all “distributions” (the $444 million) are fair game for claw back as fraudulent conveyances– they certainly weren’t “earned” and the record seems to show that on an above-board basis FTP did not make ditributable profits anywhere close to that amount. Who sues to enforce the claw back will be an interesting question given the different jurisdictions, and whether sometime far far down the road the US account holders (the unsecured creditors)get any of that is another interesting question.

  32. Kevin
    September 29, 2011 at 8:34 AM EDT

    I’m starting to wonder how much of all those disbursements that have been made is actually left now..and whether the DOJ has any real hope of getting anything.

    I know we are talking about hundreds of millions of dollars, but consider this.

    We know that FTP is severely in the red. It could be anywhere’s between $150 million and a few hundred million more.

    We know there were around $443 million in disbursements made, and that they also had around $60 million in cash.

    With all of this talk of “investors”, it makes me wonder why any investor would invest in the company if the shareholders/receivers of the $443 million weren’t willing to re-invest some of that money themselves. If they had done this near the beginning of this ‘fiasco’, they probably could have resolved it rather easily. But that haven’t done so, and it would seem at face value to be one of the easier things to do, then to approach outsiders.

    At this stage, it definitely needs a completely new management team, but I don’t understand their logic at all here. Bitar&Co have to be one of the worst management teams in history. How often do you seriously hear of a casino going bankrupt?

  33. hoi
    October 21, 2011 at 2:01 PM EDT

    All these so-called celebrity poker players are all phonies.

    On-line poker blows!!!

    • fletch
      December 21, 2011 at 10:08 AM EDT

      Too true. Lederer proved it.

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