Raymond Bitar, the chief executive officer of world renowned online poker site Full Tilt Poker, was arrested on July 2 on John F. Kennedy International Airport, being accused of money laundering, bank fraud and gambling.
Bitar promised poker players that their funds would be secure, but instead, he used the money to pay shareholders and Full Tilt operations. In the end, the firm was unable to pay around $350 million (276 million EUR) to players worldwide.
“With today’s arrest and the new charges brought against him, Raymond Bitar will now be held criminally responsible for the alleged fraud he perpetrated on his U.S. customers that cost them hundreds of millions of dollars,” said Manhattan U.S. Attorney Preet Bharara.
“The indictment alleges how Bitar bluffed his player-customers and fixed the game against them as part of an international Ponzi scheme that left players empty-handed.”
In 2006, when the Unlawful Internet Gambling Enforcement Act was enacted, Full Tilt Poker started relying on fraudulent means to trick banks into processing payments.
Instead of keeping the funds deposited by players in separate accounts as they promised, Bitar and his accomplices used the money to cover operating expenses and to pay their own salaries.
Thus, by the end of 2010, the company owed around $344 million (271 million EUR) to customers, but its bank account balances totaled only $145 million (114 million EUR).
Furthermore, employees were instructed to lie to both players and regulators about how much money the company had on hand. However, in reality, at this point Full Tilt Poker was nothing more than a mass-scale Ponzi scheme.
The firm admitted to the large debt to players only weeks before US authorities disrupted its activities in April 2010.
Besides Bitar, there are ten other individuals charged for their involvement in the scheme.