DOJ Claims Full Tilt Was Ponzi Scheme: Lederer, Ferguson, Bitar Face Charges

Manhattan’s U.S. Attorney Preet Bharara, on Tuesday, called Full Tilt Poker “a massive Ponzi scheme against its own players.” The Department of Justice is now amending the legal papers of Black Friday to include new charges specifically targeting Full Tilt Poker and its owners.
This amendment charges three new defendants with money laundering: Full Tilt Poker board members, Howard Lederer, Jesus Ferguson, Rafael Furst, along with the previously charged, CEO Ray Bitar. It’s unclear if jail time could be in their future, but if convicted of money laundering, these four owners of Full Tilt, and possibly others, will be forced to personally pay out penalties ranging from $12M to $42M.
In this new amendment, the Department of Justice claims “Full Tilt Poker used player funds, among other things, to maintain a steady flow of payment to its owners, totally more than $443 Million over the last four years, despite the fact that Full Tilt Poker did not have sufficient funds to repay its players.”
According to the DOJ, by March 31 Full Tilt Poker owed $390 million to poker players around the world, including $150 million to Full Tilt players in the United States, but only had $60 Million in their bank accounts. According to these charges, crypto gambling not only were player funds not safe, but over 85% of player funds were spent on operating expenses or paid out to the owners in the form of exorbitant monthly paychecks. If these allegations are true, then Full Tilt has nowhere near enough to pay out its players who deposited money online and have been unable to make withdrawals since April 2011.
US attorney Preet Bharara came down hard on Full Tilt Poker Tuesday. Bharara said, “Full Tilt insiders lined their own pockets with funds picked from the pockets of their most loyal customers while blithely lying to both players and the public alike about the safety and security of the money deposited.”
The Department of Justice also claims that Full Tilt repeatedly misrepresented themselves to customers, and that their claims of keeping money safe were blatant lies. As as an …

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Crypto Gambling

As Price Reaches Record Highs, is Bitcoin in a Capacity Crisis for Crypto Gambling ?

Bitcoin Crisis

Imagine you are slightly late for work, quickly getting a shower, brushing your teeth and all the rest, walking – in an almost running manner – to the tube station, to then find out there are 200,000 people waiting outside to get the train.

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What’s more, the train only handles 4,000 individuals and arrives every ten minutes, during which period new individuals arrive at a rate of 4 per second. Now, it’s ok, you’re busy, you can still be one of those 4,000 individuals and get to work if you pay a high enough fee.

So you check out the notice which says the current estimated fee is $1, but since others are seeing the same notice too and paying $1 too, the fee keeps going up every second, with these higher fees paid by the new individuals that come every second, pushing you down the queue.

Tough luck, you can’t make it to work today because your $1 bid is now as good as worthless to the super congested network. The next day you learn the lesson, so instead of bidding what the notice says, you bid 10% or 20% more, but you weren’t the only one who missed work yesterday, almost everyone else did too and they have this genius but obvious idea too, making you miss work again.

The next day you get angry and pay double the fee in Crypto Gambling, but you’re not the only angry one. Now, sure, some in this lottery do get to make it to work, 4,000 every 10 minutes with 200,000 waiting, but a lot don’t, resulting in a bidding war which looks like below:

Bitcoin’s fees go vertical – source blockchain.info

As can be seen, bitcoin’s fees have gone vertical, which is bad, but if you know you’d get through for x dollars then at least you can evaluate the proposition. Instead, you’re not only paying high fees, but you don’t even know whether you will get the service …

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