Last week, the U.S. Department of Justice amended the original complaint it released on Black Friday in April. Full Tilt Poker and its board were the target of the amendment, so naturally they headline our five thoughts.
1. Full Tilt Poker doesn’t have the money to pay back the players — Surprise!!!
During the summer, we had a sneaking suspicion that this was the case, and a week ago today, the Manhattan U.S. Attorney’s Office confirmed that Full Tilt Poker has insufficient funds and can’t pay its players. According to the amended complaint, as of March 21, 2011, FTP only had $60 million in its bank accounts, while it owed approximately $390 million to the players — $150 million of that to American players. Despite being short on cash, the company still found a way to pay its board members, CEO Ray Bitar, Howard Lederer, Chris “Jesus” Ferguson and Rafe Furst, to the tune of nearly $200 million.
Because this is a civil complaint, these four individuals are not at risk of jail time at the moment, but their property could certainly be at risk in the future — including the bank accounts cited in the amendment. If the Department of Justice has the opportunity to seize these assets, it has a responsibility to convey that money to the players. They are the victims in this case and should be protected by any means necessary. The Manhattan U.S. Attorney’s office traditionally only takes on “slam-dunk cases,” so hopefully there’s still a chance for reimbursement.
The lack of foresight that FTP showed is mind-boggling. Once payment processors started to slow down, the company should’ve tackled the problem immediately. Once processors stopped completely, Full Tilt should’ve shut down all deposits and made the problem known. Instead, it credited players with monopoly money and is now in a situation where it owes more than it should. Whether this was due to greed, laziness or stupidity is uncertain. Hopefully, these four men pay the price, and justice is served for those who have funds in limbo.
2. The mainstream media are ruthless
Once the words "Ponzi scheme" were attached to the amendment by U.S. Attorney Preet Bharara, the mainstream media attacked. The New York Times led with, “Full Tilt Poker is ‘Global Ponzi Scheme,’ says US Prosecutor,” CNN sat down with Greg Raymer more than once to discuss the implications, and FOX Business conducted this horrible, cringe-worthy interview with Tom “durrrr” Dwan, wherein Stuart Varney asks Dwan if he plays at actual tables.
We’re used to the mainstream media misrepresenting poker (and using cheesy headlines that include poker vernacular), but this case is exponentially worse because it wasn’t a Ponzi scheme at all. The board members at FTP didn’t plan to bamboozle their customers — it just happened. Continuing to pay themselves was shady, and not reporting the processor problems was dimwitted, but that doesn’t make this a Ponzi scheme. Bernie Madoff, the poster boy for Ponzi schemes, systematically fabricated information so that his investors would mistakenly line his own pocket. Madoff was sentenced to 150 years in prison — the maximum sentence.
The next time the poker industry finds its way into the mainstream media, let’s make it something positive. Last week was one big headache, and these national and global headlines didn’t help.
3. Rafe Furst, sit down
After being named in the amendment, Rafe Furst wrote an open letter about the situation at hand. He assures the readers that he has nothing to hide, which is fine, but then he cries woe is me:
“It sucks to have to endure the character assassination and potshots being taken at me in the media and social networks without being able to defend myself. Privately though I have received incredible support from many of you, and I can’t tell you how much it means to me. May you never have to endure something like this, but if you do, I hope you have friends as good as mine.”
Wow. Somebody call the wambulance. Mr. Furst, if you’ve received incredible support in private, then how about thanking them in private and leaving it at that. Don’t write a blog, crying for support when you’re on the board of a company that’s on the hook for over $300 million. Playing the victim isn't going to help you in this case, so you might as well keep quiet and let the events unfold as they will. I hate to say this, but Howard Lederer has handled the post-Black Friday mess masterfully — he’s been invisible and silent.
The best part of Furst’s blog? The first comment: “I got evicted from my apartment…I bet your [sic] living in a gated community [expletive delete]. Pay me my money.”
4. What we learned about Phil Ivey
It appears as if Phil Ivey had no idea about FTP’s negligence, and, because he was left in the dark, was legitimately upset when he boycotted the 2011 World Series of Poker. He’s practically disappeared since Black Friday (who can blame him), leaving the rest of the poker world to speculate about his whereabouts and what he’s doing. Most people believe Ivey was in Ireland, entertaining potential suitors, trying to help sell the company. Despite numerous rumors that there were several interested investors, this ultimately never happened. FTP is now a shell of a company, with great software and hundreds of millions of dollars in debt.
Interestingly enough, we received a little insight into Ivey’s potential net worth. For years, it had been speculated that it was in the $80 to $90 million range, but knowing that the board members received around $40 million max, our estimates should come down. Ivey probably received the most money outside of the board — he is the most iconic figure in poker — but to think he nearly doubled the highest earning member of the board would be crazy. Outside of business we know Ivey is a great white among the sharks (that’s an homage to thought number two), but the games in Macau aren’t that amazing.
Regardless, we hope to see Ivey return to the felt soon. His presence, mystique and popularity are unmatched by anyone in the industry.
5. Tom "durrrr" Dwan is our knight in shining armor
Tom "durrrr" Dwan is fighting for the players. He's guaranteed to pay back everything he's earned from FTP, and will pay back money loaned to him by the site — as long as that money goes to the players, as well. Dwan sat down with the PokerNews Podcast hosts to discuss the situation, and why he couldn't talk during the summer.
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