Preet Bharara, the United States Attorney for the Southern District of New York, announced today that the United States has retained the Garden City Group (“GCG”)to serve as Claims Administrator to oversee the process of compensating eligible victims of the fraud committed by Full Tilt Poker against United States players that was set forth in both the civil money laundering and forfeiture action United States v. PokerStars, et al., and the indictment United States v. Bitar, et al.
Manhattan U.S. Attorney Preet Bharara said, “The Garden City Group brings a track record of handling the administration of some of the country’s largest and most complicated settlements. With theirselection, we take a significant step forward in the process of compensating victims of the Full Tilt Poker scheme.”
In July 2012, the United States entered into settlement agreements with Full Tilt Poker and PokerStars – two of the three online poker companies named as defendants in a civil forfeiture action brought by the United States alleging bank fraud, wire fraud, money laundering, and illegal gambling offenses. Under the terms of the settlement with Full Tilt Poker, the company agreed to forfeit virtually all of its assets to the United States (the “Forfeited Full Tilt Assets”) in order to fully resolve the action. The amended complaint filed in that action alleged that Full Tilt Poker defrauded its players by misrepresenting to the public that player funds held by Full Tilt Poker were safe, secure and available for withdrawal at any time. In reality, the company did not maintain funds sufficient to repay all of its players and instead, utilized player funds to finance more than $400 million in dividend payments to Full Tilt’s owners.
Under the terms of the settlement with PokerStars (the “PokerStars Settlement”), the company agreed, among other things, to forfeit $547 million to the United States and to assume Full Tilt Poker’s liability for the approximately $184 million owed by Full Tilt to foreign players. The PokerStars Settlement also provides that PokerStars will acquire the Forfeited Full Tilt Assets from the Government and also precludes PokerStars from offering online poker for real money in the United States unless and until it becomes permissible to do so under relevant law.
Utilizing funds forfeited from PokerStars in this action, the Department of Justice will establish a process by which eligible U.S. fraud victims will be able to seek compensation for their losses(“Petitions for Remission”). The Garden City Group has been selected as Claims Administrator by the United States to process Petition forRemission claims submitted by the U.S. Full Tilt fraud victims.
GCG is a class action settlement and bankruptcy administration company that has provided comprehensive legal administration services for nearly three decades. GCG has worked on numerous complex administrations, including the Gulf Coast Claims Facility; the Deepwater Horizon Economic and Property Damage Settlement; the Visa Check/MasterMoney Antitrust Litigation; the WorldCom Securities Litigation; and the IPO Securities Litigation.
Eleven defendants were charged criminally in connection with the original Internet poker Indictment, eight of whom have been arrested. The defendants who have been arrested are: Brent Beckley; Raymond Bitar; Nelson Burtnick; John Campos; Chad Elie; Bradley Franzen; Ryan Lang; and Ira Rubin. Seven of the arrested defendants previously pled guilty and four have been sentenced. Beckley was sentenced to 14 months in prison in July 2012, Rubin was sentenced to
36 months in prison in July 2012, Campos was sentenced to three months in prison in June 2012, and Elie was sentenced to five months in prison in October 2012. Burtnick, Franzen, and Lang await sentencing. The charges against Bitar remain pending as do the charges against Isai Scheinberg, Paul Tate, and Scott Tom, who remain at large. The charges and accusations against them are allegations and they are presumed innocent unless and until proven guilty.
U.S. Attorney Preet Bharara praised the Federal Bureau of Investigation for its outstanding leadership in the investigation, which he noted is ongoing. The victim claims process will begin shortly. Information about the claims administration will be posted on the dedicated website GCG has established in connection with the victim compensation process, www.FullTiltPokerClaims.com. Information is also available from the toll-free hotline number at (866) 250-2640.
This matter is being handled by the Office’s Asset Forfeiture and Complex Frauds Unit. Assistant U.S. Attorneys Sharon Cohen Levin, Michael Lockard, Jason Cowley, and Andrew Goldstein are in charge of the civil money laundering and forfeiture action. Assistant U.S. Attorneys Arlo Devlin-Brown, Nicole Friedlander and Niketh Velamoor are in charge of the criminal case.
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