PokerStars and Full Tilt Poker have settled a federal money laundering charge and fraud charges against them. The companies have said that they will pay hundreds of millions of dollars in the settlement in order to reimburse customers. PokerStars is forfeiting $731 million, with $547 million of it going to customers of Full Tilt Poker for reimbursement in the United States. Full Tilt Poker also said it will settle and that it will stop operations.
In the settlement agreement, PokerStars and Full Tilt Poker did not admit that they did anything wrong. Full Tilt Poker claimed that it operated in the Channel Islands but instead, most of its owners were residents of the United States. For instance, Chris ‘Jesus’ Ferguson, owned 19 percent of the business.
Preet Bharara, U.S. attorney for Southern District of New York, said that the settlement will “allow us to quickly get significant compensation into the victim players’ hands.”
Prosecutors on the case said that the companies were using false billing codes to trick banks that did not want to process gambling transactions. Prosecutors also said that Full Tilt Poker lied to its customers when it told them that their private accounts were “segregated and held separately” and not with the operating funds of the company. Full Tilt Poker wound up owing more money to its customers than it was able to pay.
“Today’s settlements demonstrate that if you engage in conduct that violates the laws of the United States, as we alleged in this case,” Bharara said. “Then even if you are doing so from across the ocean, you will have to answer for that conduct and turn over your ill-gotten gains.”
Raymond Bitar, the chief executive for Full Tilt Poker, is banned from employment with PokerStars because he is facing criminal fraud charges. Ferguson is also banned from employment along with Howard ‘The Professor’ Lederer. The two poker players are defendants in the case. Isai Scheinberg, the founder of PokerStars, will face criminal fraud, gambling and money laundering charges. Scheinberg is not permitted to act as a director or executive of the company any longer.
PokerStars chairman, Mark Scheinberg, is the son of the founder. He said the following in a statement, “The agreement explicitly permits PokerStars to apply to relevant U.S. gaming authorities, under both PokerStars and Full Tilt Poker brands, to offer real money online poker when state or federal governments introduce a framework to regulate such activity.”
Chief executive of U.S. Digital Gambling, Jon Richmond, said, “For PokerStars, it’s smart business to try to remove a number of the clouds which obviously were preventing them from operating in the U.S.”