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Poker site 'a global Ponzi scheme'; Federal suit cites fraud by Full Tilt

An Internet poker company that was blocked from operating in the United States in the spring as part of an online gambling crackdown was "not a legitimate poker company, but a global Ponzi scheme," federal prosecutors said Tuesday.

The popular Full Tilt Poker website illegally raided player accounts to fund operations and make lavish payments to its owners, Justice Department lawyers said in a revised civil lawsuit filed here.

Over four years, the company used $444 million in player money to pay board members, including well-known professional poker players Christopher Ferguson and Howard Lederer, investigators said.

The poker site had promised players that their accounts were protected and wouldn't be touched. But authorities say that, as of March, the company had only $60 million left in its bank accounts to cover the $390 million that it owed to players. It routinely mingled player money with its own finances and took cash from some customers to pay out winnings due to others, prosecutors said.

"Full Tilt was not a legitimate poker company, but a global Ponzi scheme," U.S. Attorney Preet S. Bharara said in a statement. "Not only did the firm orchestrate a massive fraud against the U.S. banking system, as previously alleged, Full Tilt also cheated and abused its own players to the tune of hundreds of millions of dollars."

Federal authorities initially sued Full Tilt Poker in April as part of a broad crackdown on the most popular online poker sites in the U.S. They also filed criminal charges against the company's two top executives, Nelson Burtnick and Raymond Bitar.

Those charges are pending, and the men are still being sought by authorities.

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