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Full Tilt Poker's gaming license revoked by Alderney29 September 2011
"At a hearing held in London over six days, it emerged that FTP had fundamentally misled AGCC about their operational integrity by continuously reporting as liquid funds balances that had been covertly seized or restrained by U.S. authorities, or that were otherwise not actually available to the operator," the AGCC said in a statement.
"Serious breaches of AGCC regulations include false reporting, unauthorized provision of credit, and failure to report material events," the AGCC said.
"Unresolved claims by players against FTP become a matter for the police and civil authorities. Now that FTP’s licenses have been revoked, AGCC no longer has jurisdiction over these companies," add the AGCC.
The U.S. Department of Justice, through the U.S. Attorney's Office for the Southern District of New York, responded to players looking to get their money back.
"At this time, this Office, together with the FBI and other agencies, is attempting to trace, secure and forfeit as much as possible of the funds derived from operation of the fraud committed by Full Tilt Poker and its board members that is alleged in the amended complaint," said U.S. Attorney's Office in a statement.
"The Office is also attempting to obtain and examine the books and records of Full Tilt Poker. Many of those books and records are kept overseas," added the U.S. Attorney's Office. "The return of forfeited funds to victims of the alleged fraud may be possible, but will depend on several factors, including the successful conclusion of the litigation, the amount of funds seized and ordered forfeited by the court, and compliance with other procedures the Department of Justice may eventually establish regarding return of forfeited funds to victims who lost money as a result of the alleged fraudulent conduct.
"We cannot predict the duration of proceedings in this case, other than to state that they will last for many months at the least. We will apprise victims of the alleged fraud of future developments as appropriate."
Last week, Howard Lederer and Chris Ferguson were added to the DOJ's complaint against Full Tilt and U.S. Attorney Preet Bharara called the online poker company "a global Ponzi scheme."
But the amended civil complaint against Full Tilt Poker played no role in today's announcement, according to AGCC. The AGCC deemed the actions "irrelevant."
The AGCC had originally suspended Full Tilt's license on June 29, 75 days after the U.S. Department of Justice indicted Full Tilt founder and CEO Raymond Bitar and seized several bank accounts belonging to the online poker company.
At a July hearing on the suspension, Full Tilt successfully argued to a tribunal hearing its case that it should be postponed so it could complete a sale of the company or find an investor, and that all hearings should be held in private so potential buyers and investors were not scared away.
Full Tilt requested another postponement of its hearing last week, so it could continue working on finding a buyer. But today, the AGCC made it clear that is patience had run out.
"FTP's representatives submitted that the Commissioners should adjourn their determination of sanctions in order to permit commercial negotiations to develop further," the AGCC said in its determination notice.
"The Commissioners have conducted a balancing exercise of the various interests at issue, including, the players (past, present and future), the eGambling industry generally, the public interest and the character of eGambling in the Island of Alderney," the AGCC added. "Due to the seriousness of the grounds established against FTP, the Commissioners are of the opinion, that it is in the public and player interest for the Commissioners to discharge their duties without unnecessary delay. The Commissioners therefore reject FTP's application for the Commissioners to adjourn their determination in relation to sanctions."
According to the AGCC documents released today, when Full Tilt's request for a hearing postponement was rejected, the company declined to defend itself against charges levied against it by the AGCC, including it had misrepresented its cash balances.
The AGCC investigation found the DOJ had seized $331 million from Full Tilt between June 28, 2007 and June 20, 2011, but Full Tilt treated the seized money as cash on hand.
"The Accountant's Report discusses the fact that FTP may argue that there may have been an expectation that the frozen cash balances would become available to the group," the AGCC report said. "However, the Accountant's Report concludes that due to the fundamental uncertainty over their recoverability the situation should have been reported to AGCC as it arose."
Full Tilt's accounting practices was just one of a host of reasons the AGCC cited for revoking the online poker room's license. Other cause for action cited by the AGCC include failing to properly report the DOJ seizures, not refunding money to players, not having enough money on hand to cover player deposits and offering credit to players.
The offering of credit charge stems from the company's decision to credit player accounts even if it didn't have a payment processor to handle the transaction.
"The Accountant's Report explains that Vantage Limited (Editor's note: According to the AGCC, Vantage Limited is Full Tilt's North American operation) had not been able to identify payment processors who could collect deposits from players," the AGCC said in its report. "The Accountant's Report explains that this resulted in customers receiving credit in relation to their deposits. It is alleged that such credit could then be used for gambling transactions. However, due to the fact that Vantage Limited had not found any payment processors who were able to collect the funds, Vantage Limited were unable to collect the payments made by their customers...Having considered all of the evidence, the Commissioners are of the opinion that the acceptance of deposits from customers without any means to collect such payments constitutes an offer of credit."
According to the AGCC report, Full Tilt had $128 million in uncollected payments.
Full Tilt Poker's gaming license revoked by Alderney is republished from Online.CasinoCity.com.
Best of Vin Narayanan