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Why did Full Tilt Poker get shut down?

The United States authorities had taken action against Full Tilt Poker back in April 2012 because the company had been offering poker illegally in the United States. It is a widely known fact that it is against the law for American citizens to gamble on the Internet, although betting via foreign websites continues. However, regardless of the motive of shutting down Full Tilt, the act actually led the authorities to making a surprising discovery.

Based on the accusation that surfaced, Full Tilt was being operated “as massive Ponzi scheme” by the company’s board of directors, which included Chris Ferguson, Howard Lederer (who could have ended up in jail) and Rafael Furst. The three, along with another company director, were accused of defrauding both U.S. and non-U.S. members of the Full Tilt Poker website out of over $300 million that they still owe to them. The U.S. government has stated that over the years, $444 million had been distributed among the 23 owners of the company.

According to a statement made by Preet Bharara, the U.S. Attorney in Manhattan, Full Tilt was never a legal poker company but was operating as a worldwide Ponzi scheme against its own members. The ones behind the company picked funds from the pockets of their loyal customers to line their own, and blatantly lied to everyone that a player could safely deposit money with them without any security concerns.

According to speculations by the U.S. government layers, Full Tilt Poker had most likely been facing a cash crunch since because of their inability to collect funds from players in the United States. Indeed, there was some serious disruption in the payment processing network of the company and money could no longer be withdrawn by the company from the bank accounts of U.S. players.
According to the Federal Bureau of Investigation, Full Tilt Poker never stopped crediting player accounts nor did they disclose they were no longer able to fund those credits. As a result, online players at the site continued making bets with “phantom funds” that pooled up to total of $130 million, resulting in a huge shortfall.

By the time Full Tilt had been shut down as an illegal gambling business, Full Tilt Poker had nothing but $6 million, while the company was liable for replaying $300 million. Of course, representatives of Full Tilt claim that they had committed no misdeeds, rather they fell victim to the action that the United States government had taken against the online poker industry. Regardless of whether it was right for the U.S. government to ban online gambling, had Full Tilt Poker not been shut down, the Ponzi scheme that the company had been operating would not have been revealed soon enough.

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