Full Tilt Poker’s Founder Caught Up in Money Laundering Issues

April 10, 2013

Full Tilt Poker has run into a lot of controversy with regard to issues of money laundering, in the past four years. In fact, Ray Bitar, one of the founders of the company, is still dealing with these issues with the US prosecutors. In a recent report, experts stated that Bitar has stopped his defense against the criminal charges that were posed against him, and he is presently urging for a plea from the federal authorities.

Bitar’s involvement with Full Tilt Poker

Ray Bitar played a very important role in launching the Full Tilt Poker website, and bringing this popular online poker site in the limelight. However, around two years ago, Bitar was charged with money laundering charges along with 11 other senior poker professionals. In the month of April, 2011, Bitar was charged with five offenses, and the federal agencies proposed a 65-year long jail sentence for him. At the same time, the Full Tilt Poker website was taken off the online market, and all the player accounts on the network, were frozen.

The reasons behind the allegations

In the past five years, the US laws with regard to online gambling, especially online poker, have changed drastically. In the year 2006, the US federal government issued the Unlawful Internet Gambling Enforcement Act. According to this act, all the operators who provide online gambling or online poker options to the residents of the country were punishable by law.

Once this act was implemented within the country, popular online gambling websites such as PokerStars and Full Tilt Poker were charged with crimes of money laundry, as these websites offered online poker to the US residents, even though gambling was illegal in the country. This act created a lot of imbalance in the online gaming industry in the US, and all the popular operators had to withstand the worst of circumstances.

In order to regain their reputation, the operators who were charged with criminal offenses once this act was implemented, presented their defense in front of the governmental agencies. According to all the operators, the legal restrictions apply to all the gambling games that are based on chance, and poker is not one of them. All the operators, including Full Tilt Poker stressed on the fact that poker is a skill-based game unlike other online casino games, and the players need to have a sophisticated skill-set in order to win money through this game.

Nonetheless, all the operators were charged with money laundering offenses even after their explanations, and they had to pay fines to the government as well as the players in order to re-compensate for their frozen playing accounts. However, once the fines were cleared, the Department of Justice in the US stated that, these operators could conduct online poker activities within the US states, if the state authorities provided them with a license to do the same.

The details of the allegations imposed on Full Tilt Poker and Bitar

Full Tilt Poker has been charged with a lot of criminal offenses in the last 2 years. According to the federal agencies, the company laundered money from the US residents, and used it for personal benefits. A detailed investigation was proposed in this matter, and the investigating authorities stated that Bitar along with a few other members of the company, manipulated player accounts without the knowledge of the poker players.

According to a US attorney from New York, Preet Bharara, Full Tilt Poker was operating in a pronzi-style scheme before it was shut down by the federal agencies. Statistically, the company had no legal accounts for approximately $350 million, and according to Bharara, these figures were manipulated by Bitar.

Experts claim that Bitar manipulated the player accounts in the company, and even bluffed-in some of the accounts. So, the actual number of accounts on the website was not real, and half of them were planted by the company itself, in order to extract money from the genuine players. In this manner, the company used the money, which was earned by the fake accounts, and the genuine players did not benefit by playing on the network.

For years, Full Tilt Poker operated with a license from Channel Island. The company did not have adequate resources or infrastructure in order to provide online poker to the residents of the region; however, they continued their activities from various servers close to Guernsey. Since Full Tilt Poker was charged with criminal offense, and it had a license from Channel Island of Alderney, Channel Island’s good-standing reputation was hampered in the process as well.

PokerStars and Full Tilt Poker accused of setting up fake websites

According to experts, apart from conducting online poker illegally, PokerStars and Full Tilt Poker were charged with other offense of creating fake websites as well. Both these companies earned millions of dollars worth revenue from the residents in the United States, and they also used intermediaries sites in order to extract more revenue from the players.

Reports suggest that both these online operators set up fake online websites in order to make their poker deposits easier. Some of these companies sold products such as bicycles, watches, gold clubs, clothing, and even jewelry. However, in actuality, the deposits made on these fake websites were poker deposits, and were made for the online games offered by both these companies.

Since online gambling was not legal in the US, the operators had to find alternatives to process the financial transactions made by the players on their websites. In order to formulate appropriate alternatives, these companies ended up indulging in more illegal activities. According to experts, running online poker activities in a restricted environment made the companies indulge in more crimes, and this has hampered their reputation to a greater extent.

Present status of these poker providers

At present, these online operators are trying to get gaming licenses in the states that have legalized online gaming and online poker. However, these accusations have made it difficult for the operators to obtain a license in states with strict laws.