Unclear if Lederer, Ferguson, Furst Will Face Criminal Charges in Alleged Ponzi Scheme

A week after Manhattan U.S. Attorney Preet Bharara called Full Tilt Poker a “global Ponzi Scheme,” amending charges of fraud against its players to the civil complaint, Howard Lederer, Chris Ferguson, and Rafe Furst are not facing any criminal charges. The company’s CEO Ray Bitar faces a maximum sentence of 65 years in prison for alleged crimes listed in April’s unsealed indictment

The U.S. Attorney’s Office in the Southern District of New York said that they cannot confirm or deny any potential criminal charges against Lederer, Ferguson, or Furst, but said the investigation is ongoing.

Jeff Ifrah, attorney for Bitar, told Card Player that anything is possible, but that he hopes the charges in the amendment won’t become criminal. He said he isn’t sure what the motivation was behind calling the site a “Ponzi Scheme,” but that it could reflect the Department of Justice’s frustration with the company’s slow progress to find a buyer.

While the merits of the term Ponzi to describe Full Tilt are currently hotly contested by attorneys associated with the company, such allegations are typically also associated with criminal charges. However, that doesn’t necessarily mean that Lederer, Ferguson, or Furst will face possible jail time.

“I’ve never heard of a ‘non-criminal Ponzi scheme’ before, but that doesn’t mean that it couldn’t possibly exist,” Dr. Henry Pontell, a white-collar crime expert and professor at University of California, Irvine, told Card Player. “Civil charges may be filed where there’s not enough evidence to prove beyond a reasonable doubt. Ponzi is a descriptive and pejorative term, but it’s really about a specific charge for fraud (criminal or civil).”

Pontell also pointed out that the DOJ could bring lesser charges against the defendants, ones that wouldn’t necessarily be called criminal.

Bitar, the only board member facing both forfeiture of assets and possible jail time, is currently overseas trying to coordinate an investment in the company that would release what is owed to players, according to Ifrah. He also said that his client doesn’t want any further criminal charges to fall upon Full Tilt’s board of directors. If everything remains static, “[Bitar] would be the only person punished criminally in the company.”

According to Ifrah, the anonymous potential investor in Full Tilt will meet with the DOJ next week. Ifrah said that he is “encouraging [the investor] to come out of the closet,” but “I’m not looking to scare anybody away.”

Authorities claim that Full Tilt’s Bitar, Lederer, Ferguson, and Furst defrauded players “by misrepresenting that their funds on deposit in online gambling accounts were safe, secure, and available for withdrawal at any time.” Furthermore, the company used the funds to pay board members and other owners more than $440 million in corporate dividends over the past four years.

Follow Brian Pempus on Twitter — @brianpempus

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