Full Tilt Poker “Ponzi Scheme” Back Story. The failed FTP poker site was once a shining example of how user-friendly software and big-name backing could entice professional and recreational players alike to its real money service. And we cannot shake the distrust of Full Tilt Poker which has had a pervasive culture of corruption, criminality and disregard for its customers. How anyone could ever trust Full Tilt Poker again is beyond us. Full Tilt Poker is a scam – stay away. We recommend William Hill which offers a fair and popular poker room.
- Forum for all In Game Discussions and Any Tasteful Off-Topic Discussions. All Game Picks should not be in Here.
- Sep 21, 2011 Chris Ferguson, the star poker player and gifted programmer who devised the means and structure for Full Tilt Poker and was one of its principal owners, and whom I wrote about for The New Yorker.
- Sep 20, 2011 The U.S. Attorney in Manhattan on Tuesday accused the operators of the online poker site Full Tilt of operating like a Ponzi scheme, siphoning more than $400 million to.
- Full Tilt was not a Ponzi scheme. As good as you may be at poker, your wagers are not investments. Sources: Feds: Full Tilt Poker site was Ponzi scheme, customer accounts were looted of $440 million in the Washington Post; U.S. Alleges Poker Site Stacked Deck by Alexandra Berzon in the Wall Street Journal; First Amended Complaint in US v.
- Oct 11, 2013 Several Full Tilt class action suits have already been filed, in addition to a civil lawsuit by the U.S. Justice department alleging that the online poker site engaged in a global Ponzi Scheme, illegally raiding players accounts for operation costs and lavish payments to.
Most of the general public probably remembers Annie Duke from the Donald Trump-hosted Celebrity Apprentice reality TV program. She was the poker player who finished runner-up to the late Joan Rivers.
Those people might also remember how ugly things got between the two. Rivers compared Duke to a murderous Nazi dictator. Duke compared Rivers to a deadly disease. Neither celebrity’s image came out untarnished.
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Of course, the poker community largely remembers Duke for a variety of different reasons. Mainly her role in a series of scandals and failed poker business ventures. Ones that left players out millions of dollars and Duke entering early retirement with a cushy bankroll.
Duke and Ultimate Bet
Duke was one of the faces of the online poker site Ultimate Bet. She was never implicated in the site’s super user cheating scandal. The one in which a group of Ultimate Bet insiders led by 1994 World Series of Poker Main Event champ Russ Hamilton gained access to the site’s back end. They were able to see other players hole cards and ultimately bilked them out of as much as $22 million.
However, Duke continued to take a paycheck and endorse the site. Even if it wasn’t directly involved in the scam, Ultimate Bet certainly turned a blind eye to the activity of members of its management team and consultants involved. Plus, it helped try to cover it up. Any endorsement of any of that is an affront to the poker community.
Duke and the Epic Poker League
Duke was also the Commissioner of the Epic Poker League. She cashed a fat check from this organization. All while it piled up millions in debt and ultimately filed for bankruptcy. In the end, Epic cancelled the final two tournaments of its first season. Of course, this included the League Championship $1 million freeroll promised to the top money winners. Duke still got hers though.
Of course, most members of the poker community are also keenly aware Duke is the sister of Full Tilt Poker founder and board member Howard Lederer. Full Tilt was booted out of the American market by the United States Department of Justice in April 2011.
Principles in the organization were charged with various money laundering and gambling law violations. Later that year, Lederer and other members of the Full Tilt Poker board were accused of defrauding poker players. Full Tilt was referred to as a Ponzi scheme. Apparently the company’s owners regularly raided player funds to pad their own pockets.
Top 10 Ponzi Schemes
The DOJ accused Lederer of personally taking over $40 million in player funds for himself. In 2012, PokerStars bought out Fill Tilt Poker and settled the case with the DOJ. PokerStars was the one that paid back $150 million to players, not Full Tilt or its owners. Lederer also settled with the DOJ, admitting no wrongdoing and giving up assets worth a paltry $2.5 million.
Duke and the mainstream media
Duke has since left the poker world behind. However, she continues to trade in on the success she had as a player before the various scandals. Plus, the mainstream media continues to let her. In fact, they’ve show no interest in revealing the whole truth behind Duke’s involvement in poker.
Just this week, CNBC trotted her out as some kind of expert in decision making. She was referred to as a “world-renowned poker player and now a consultant and author.”
CNBC even went as far as to list highlights of her poker accomplishments. These included the 2010 made-for-TV NBC National Heads-Up Championship title, her 10-entry 2004 WSOP Tournament of Champions win, and her 2004 WSOP $2,000 Omaha Hi-Lo 8 or Better bracelet.
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It completely ignored the previously listed low-lights of Duke’s poker career. Much to the chagrin of the poker community, who took to Twitter to express outrage at the fact mainstream media organizations like CNBC are still making it seem like Duke somehow represents them.
Sigh.. I wish Dan and Cnbc had looked more into the background of a person who was heavily involved and endorsed Ultimate Bet and Epic poker (both failed businesses that cheated their customers). So many honorable poker players- no need to pick scammy Duke https://t.co/oKVmu2bexC
— Ari Engel (@AriEngelPoker) February 7, 2018
The entire thing was really just a plug for Duke’s latest book. The title of which is, Thinking in Bets: Making Smarter Decisions When You Don’t Have All The Facts. The title makes it sound like the book is about succeeding in business by treating decisions the same way a poker player does.
It’s an interesting concept. Maybe next time CNBC will introduce someone who truly represents the poker community to discuss it.
In the meantime, it’s hard not to think of that title as strangely apropos to this particular situation. CNBC is essentially asking readers to make a decision on buying a book without all the facts about its author. I think I know what most poker players will do.
Photo by Kathy Hutchins / Shutterstock.com
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Full Tilt Poker’s player pool was fully integrated into PokerStars on May 17 and the poker platform was officially retired. In the wake of the final closure of what was once one of the largest online poker sites in the world Howard Lederer, a former board member of the now defunct business, has opted to put out a statement through Daniel Negreanu’s poker blog.
Lederer has been a persona non grata in the poker world after the fiasco that followed the U.S. Department of Justice’s actions on April 15, 2011. Players with money in accounts on Full Tilt Poker looked as if they might not ever retrieve their funds after poker’s Black Friday as a result of the site’s failure to segregate player funds from the money used to operate the business. Players only received any form of relief when PokerStars announced that they would buy the company and pay out player’s balances.
Negreanu posted Lederer’s statement and also gave his own commentary, saying it is, “the kind of apology people would have liked to read five years ago.” Lederer’s full statement can be found below. For more of Negreanu’s thoughts on it, check out his blog post which can be found here.
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I am writing to apologize to everyone in the poker community, especially to all the players who had money on Full Tilt Poker on April 15, 2011. When Full Tilt Poker closed in 2011, there was a shortfall in funds, a distressed sale to recover those funds, and a long delay in repaying players. Throughout this period, there was little explanation for the delay, and no apology. Players felt lied to. They trusted the site, and they trusted me, and I didn’t live up to that trust.
I take full responsibility for Full Tilt’s failure to protect player deposits leading up to Black Friday. The shortfall in player deposits should never have happened. I should have provided better oversight or made sure that responsible others provided that oversight. I was a founder in the company that launched Full Tilt, and I became the face of the company’s management in the poker community. Many of our players played on the site because they trusted me.
Even though I was no longer overseeing day to day operations, my inattention in the two years leading up to Black Friday imperiled players’ deposits. My involvement in Full Tilt from 2003-2008 put me in a unique position of trust—a trust that I disappointed by failing to ensure that Full Tilt was properly governed when I stepped away in 2008. My failure to make sure proper oversight was in place when I left resulted in the situation that began to unfold on Black Friday. Players were not able to get their money back for a minimum of a year and a half, and, for many, it has been much longer. I’ve been a poker player my entire adult life. I know the importance of having access to one’s bankroll. The lost opportunity, frustration, and anxiety many of FTP’s customers experienced in the intervening years is unacceptable. I cannot be sorry enough for what happened.
During Full Tilt’s rise, I received a lot of praise. I couldn’t see it at the time, but I let the headlines change me. In the first couple of years after Black Friday I made lots of excuses, to my friends, my family and myself, for why I wasn’t the bad guy or big-headed or wrong. In the months immediately following the crisis, I focused a lot of energy on trying to refute allegations that were factually untrue. I convinced myself that I was a victim of circumstance and that criticism was being unfairly directed toward me instead of others. I was missing the bigger picture.
At a wedding in the fall of 2014, I was sitting with a friend, talking about Full Tilt. I was grumbling about how unfair my lot in life had become. My friend didn’t let me off the hook. I’m paraphrasing here, but he said, “Howard, it doesn’t matter whether you knew about the shortfall or what you did to help players get paid. These players feel like you lied to them. You were the face of the company in the poker community. Thousands of players played on the site because they trusted you. Many pros represented the site because they thought you were in control. And you happily accepted the accolades while falling short of their trust.”
At the time, my friend’s response felt like a slap in the face, but it is clear to me now that it was fair. An apology is not enough, but it is what I am able to offer to the poker community in the wake of a travesty that I should not have allowed to happen. I am sorry.
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Following Black Friday Lederer settled with the U.S. Department of Justice. In exchange for the opportunity to admit to no wrongdoing in the civil complaint that stemmed from Full Tilt’s failures Lederer forfeited at least $2.5 million in cash and assets, including several pieces of real estate property and vehicles. He also handed over the contents of a bank account, although the settlement didn’t specify the amount of the funds in that account. Lederer was paid at least $42.5 million by Full Tilt over the course of his involvement with the company, which he helped in founding.
With those forfeitures in mind and this apology made, has Lederer even begun to mend the bridges burned by the Full Tilt fiasco and his failure to take responsibility for the site’s mismanagement?
“The choice to accept his apology is a personal one,” says Negreanu. “For what its worth, I personally believe the apology to be genuine.”
Genuine or not, Lederer likely has a long way to go before he is able to play in poker’s biggest events without facing hostility and contempt.