Tuesday, September 20, 2011

They Cheated, They Lied: Highlights from the Full Tilt Ponzi Lawsuit

As Wall St Journal’s Alexandra Berzon reports, the government today said online-poker website Full Tilt cheated players out of their money. In part, an amended lawsuit from the government said Full Tilt claimed to hold money from players’ bank accounts that was being used instead to pay profits to Full Tilt’s owners and for other purposes.

Here are a few highlights from the government complaint:

* Tricking banks: “The principals of the Poker Companies…deceived or directed others to deceive United States banks and financial institutions into processing billions of dollars in payments for the Poker Companies, by, among other things, arranging for the money received from United States gamblers to be disguised as payments to hundreds of non-existent online merchants and other non-gambling businesses…” the lawsuit said.

In part, the lawsuit says some of the defendants fooled Visa and Mastercard — which had blocked payments to gambling sites — by directing “others to apply incorrect transaction codes…and create the false appearance that the transactions were completely unrelated to internet gambling.” The lawsuit says an Absolute Poker document from 2007 identified 20 Internet shopping websites — including petfoodstore.biz and bedding-superstore.tv — being used as fronts for credit-card transactions.

* Shifting money: “[I]n or about the summer of 2010, Full Tilt Poker’s payment processing channels were so disrupted that the company faced increasing difficulty attempting to collect funds from players in the United States. Rather than disclose this fact, Full Tilt Poker simply credited players’ online gambling accounts with money that had never actually been collected from the players’ bank accounts...

Find out the rest at http://blogs.wsj.com/deals/2011/09/20/highlights-from-the-full-tilt-ponzi-lawsuit/

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