Cliffs from DOJ Indictment of FTP CEO Ray Bitar
Very interesting stuff....
Ray Bitar is gonna fry...
Some observations from a first scan of the superceeding indictment:
The indictment is specifically for Bitar and Burnick. It adds 3 new counts of wire fraud against players, divides the previous money laundering conspiracy charge into two separate charges - for promotion and use of funds, and makes it clear that Burnick is facing counts WRT both FTP and PokerStars. Together they are facing $2.5B in forfeiture allegations.
The unnamed co-conspirator "CC-1" is most likely Lederer, but may be Ferguson. CC-1 is a well-known professional poker player and part owner of FTP who at all times relevent to the indictment co-managed Tiltware LLC with Bitar.
The second unamed co-Conspirator, "CC-2" is FTP's Director of Finance. I had posted a long time ago that the person in this role must have known about the misrepresentations to players and the AGCC.
Given that there are new charges against Bitar and Burtnick, It would seem possible that there could be a new indictment for CC-1 and CC-2.
For those who think that all the owners are to blame and should be charged, the indictment makes it clear that Bitar and CC-1 misled the owners into thinking the distributions were legit. In a March 15 2008 conference wcall with the owners of Tiltware LLC, Bitar and CC-1 told owners that it was essential to keep >= 100% of player balances as cash in company accounts. this did not include any of the cash in procesor accounts. It seems that they never in fact actually did this.
For those that think that FTP could have kept operating and paid all players if it hadn't been for Black Friday, the indictment claims that internal projections at the beginning of February 2011 showed that FTP would run out of money "within months". Despite this, Bitar continued to approve dstributions of about $10M. Between his share of distributions, directors fees and salary, Bitar seems to have been drawing well over $1M per month.
As of June 10 2012, FTP was receiving deposits of $8-9M per week from ROW players and had a $12.5M backlog in withdrawl requests and $16.6M in other payments owing, but only had $2.1M in available funds. Incoming player deposits were being used to pay off portions of player withdrawls and other bills, as well as covering operating expenses. Despite this, after BF, Bitar and Burtnick between them received "multiple millions of dollars" in payments.
The indictment contineus to assert the existence of a sub-entity known as "Full Tilt Poker Ltd." and implies it is an Irish company.
After Sun First Bank (Campos' operation) ceased processing payments in late 2010 at the request of regulators, FTP relied on two struggling single-branch banks in Illinois: All American Bank and New City Bank. It seems like All American Bank requested a $1M bribe in order to process payments. All three banks have since failed, costing the FDIC over $70M.
FTP claimed to have player money in segregated accounts as early as March 2008, but never actually segregated player funds.
FTP's Director of Finance was instructed to lie to the AGCC about cash on hand in monthly reports. Among other things, he claimed as cash on hand over $100M not actually recevied from prcessors, including amounts stolen by the processors and amounts seized by the DoJ. In his report to the AGCC covering August 2010, he claimed $370.8M cash on hand, against $322.5M player balances. In fact, FTP only had $124.3M cash on hand. Eight months before BF, FTP was already $198M short of obligations to players and $246M short of its claimed cash postion.
