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View Full Version : Online poker sites Full Tilt Poker, Absolute Poker, fined $700 million



littleroundman
07-31-2012, 10:03 PM
TWO online poker sites have been fined $700 million for luring gamers into a Ponzi scheme to pay for board members' lavish lifestyles.
US authorities had alleged that Full Tilt Poker stole some $440 million from players around the world through a Ponzi scheme and failed to maintain sufficient funds to pay prizes.

PokerStars and another firm, Absolute Poker, had been accused of bank fraud, money laundering, illegal gambling and other offences.

The US operations of the companies were shut down when the government last year brought criminal charges against various poker company executives and those who helped the companies process money.

Prosecutors said Full Tilt Poker had only $60 million left in its bank accounts to cover the $390 million it owed its players. The company allegedly used $444 million in player money over a four-year period to pay board members.

The $700 million settlement will compensate consumers who claimed they were defrauded in online games, officials say.

Full Tilt has agreed to forfeit virtually all of its assets to the US government. PokerStars agreed to forfeit $540 million to the US and to reimburse $180 million owed by Full Tilt to online players.

The deal announced by the US Justice Department allows PokerStars, a British-registered firm believed to operate the largest online card gaming site, to acquire the forfeited assets of Irish-based Full Tilt Poker.

While internet gambling has been illegal in the United States since 2006, online poker remains a multibillion-dollar industry with companies using a variety of ways to flout the law, including locating their operations offshore.

According to US officials, the companies arranged for money received from US gamblers to be disguised as payments to non-existent websites purporting to sell merchandise such as jewellery and golf balls.

On July 3, US authorities said they arrested Raymond Bitar, the head of Full Tilt Poker and charged him with a scheme to defraud banks and misleading customers about the security of their funds.

He had been charged last year with gambling, bank fraud and money laundering offences.

Bitar said in an email to employees that was posted on an online betting forum that he had "returned to the US to deal with civil and criminal cases that are pending against me in New York" and to allow a deal to transfer the assets of the group to PokerStars.

News.com.au (http://www.news.com.au/technology/online-poker-sites-full-tilt-poker-absolute-poker-fined-700-million/story-e6frfro0-1226440006965)