Was Full Tilt Poker a Ponzi Fraud?

In shocking new claims, the FBI and US Department of Justice are actively investigating whether or not Full Tilt Poker was acting as a massive international Ponzi scheme for its investors. The startling new revelations estimate that hundreds of millions in illegal money transfers and investments made their way into fraudulent activities. FTP has already been accused of perpetrating widespread bank fraud and potential money laundering activity, but this latest news is sending shock-waves through the online poker industry.

Breaking News

US Federal prosecuting attorneys are convinced that their case against FTP is airtight. Allegations that the poker site fronted for nothing more than an international Ponzi scheme are gaining serious traction in legal circles. Many international poker players fear the worst after they have been unable to get their money out of Full Tilt Poker. Poker winnings should ideally have been available to players, but this has not been the case. The concept of Ponzi fraud - or a pyramid scheme - effectively promises a high return on investment in a short period of time. However the funding is never invested and a great deal of the money is pocketed. In the case of FTP, the funds from player accounts were used to pay salaries and related expenses to administrators and operators. And there was no intention to pay it back.

What's Really Going On?

FTP is alleged to have created hundreds of fake accounts via payment processors and used players money in the name of purchases of golf balls and jewelry. However the scandal ran deep in an attempt to hide the transfer of money to the online poker room. FTP also leveled accusations against Absolute Poker and PokerStars, with Ponzi allegations. The US DoJ and the FBI subsequently closed all three sites, pending further investigations. FTP is accused of lying to players by stating that their funds were waiting to be released - which was apparently not the case. Instead, player funds were used to pay the salaries and other related expenses of FTP employees. Figures suggest that $440 million was 'stolen' from players between April 2008 and April 2011. Even Phil Ivey - one of the most credible names in poker - filed a civil suit against FTP to the tune of $150 million, claiming that being involved with FTP has soiled his reputation.

The Verdict

The company currently holds cash reserves of $6 million while it owes players a massive $300 million plus. The basic math translates into a chilling reality: FTP lied to players and swindled them out of their winnings and deposits.