Full Tilt Poker CEO Raymond Bitar arrested over alleged Ponzi scheme

(AP) The U.S. government raised the stakes Monday for an Internet poker company founder, boosting charges against him and saying he could face decades in prison for operating a Ponzi scheme that has cost poker players hundreds of millions of dollars.

Raymond Bitar, 40, was arrested as he arrived at Kennedy Airport. The founder and chief executive officer of Full Tilt Poker said in a statement issued by his lawyers that he voluntarily returned from Ireland.

"I know that a lot of people are very angry at me," said Bitar, of Glendora, Calif., in suburban Los Angeles. "I understand why. Full Tilt should never have gotten into a position where it could not repay player funds."

Bitar, who pleaded not guilty in a courtroom that included several family members and friends among spectators, was ordered held until he can meet the conditions of a $2.5 million bond, an amount set by U.S. Magistrate Judge Debra Freeman over the objections of a prosecutor who asked that he be held without bail as a flight risk.

Assistant U.S. Attorney Arlo Devlin-Brown said Bitar falsely claimed to Internet poker customers that their money would be safe and would not be mixed with company funds.

He said authorities had determined that more than $430 million had been paid to Bitar and other owners while only $60 million to $70 million remained in company accounts to reimburse players who thought they had accounts totaling $350 million, half of it belonging to Americans.

3 online poker houses face fraud charges in NYC

Devlin-Brown accused Bitar of paying himself at least $40 million, most of which remains abroad. He said charges filed against Bitar on April 15, 2011, when the three largest online poker companies operating in the U.S. were shut down, would have resulted in only a few years in prison.

The new indictment, he said, could result in a sentence that would be "measured in decades."

The charges included conspiracy to violate gambling laws, operation of an illegal gambling business, wire fraud and money laundering conspiracy. They carry a potential maximum prison sentence of 145 years upon conviction.

Devlin-Brown said Bitar continued accepting money from new customers outside the United States even after last year's charges were filed in Manhattan.

"By then this company was little more than a Ponzi scheme, and his presence was needed to keep it from unraveling," he said.

Bitar, in his statement, said he had "worked hard" for the last 15 months to find solutions to get players repaid.

"Returning today is part of that process," he said. "I believe we are near the end of a very long road, and I will continue to do whatever is required to get the players repaid, and I hope that it will happen soon."

Roberto Finzi, one of Bitar's lawyers, said his client had worked around the clock trying to pay back customers, including considering the sale of company assets.

"He was not running around Mallorca having fun," Finzi said, referencing the vacation-friendly island in the Mediterranean Sea.

Devlin-Brown rejected claims Bitar was working for the greater good of the customers, saying it "strains all credibility." He said Bitar was "simply keeping a Ponzi scheme from being detected."

The prosecutor said the U.S. had been working with Irish authorities and was prepared to extradite Bitar if he did not return voluntarily.

U.S. Attorney Preet Bharara said in a statement that the indictment shows "how Bitar bluffed his player-customers and fixed the game against them as part of an international Ponzi scheme that left players empty-handed."

Janice K. Fedarcyk, head of the New York FBI office, agreed.

"The online casino became an Internet Ponzi scheme," she said.

[Bennie363]

Maybe you people fail to realize this, but the U.S. banking system works the same way. That's why the Government offers bonds at very low interest rates. These bonds allow them to have access to more cash on hand. So if you think banks have constant access to 100% of deposited money, you should probably reconsider. I never had an issue withdrawing money from Full Tilt Poker until the Government stuck their noses in.

[no1blonde]

Hmmmm....sounds familiar...Wall Street...Banking CEOs...Senators...Representatives....It seems as if the only people who do not realize a profit from an investment is the 99%

[luadda22]

You think playing poker on line is the same as an investment??? I think I see why you are probably one of the "poor 99%'ers" and will remain that way. Why because you cannot stay on subject.

[realist2010]

On a positive note, he now qualifies to be the next governor of Florida.

[lesserof2evil]

and prolly will. Florida lol

[MichaelinAtlanta]

I do not believe the article went deep enough. It is true that the house only gets a small percentage, but FT Poker had shills playing with a loaded deck while the legit players were getting the sh*t hands every time.

[casperasop]

You obviously have o idea how poker works... You do not play against the house, only against other players. The way the house gets paid is by taking a small % of every hand played. It may be as little as pennies per hand but as hundreds of millions of hands are played it quickly adds up. What this guy was doing was not cheating people out of money by giving them bad cards... He was just straight stealing the money.

[BWB2020]

That is why they call it gambling, how one loses is not relevant, one simply loses.

All big-money gambling is fixed, in these modern times, there is no way that huge sums of money are left to pure chance.

If suckers don't bet, then suckers can't lose.

[Bennie363]

Such an ignorant comment. Explain one thing to me, if big money gambling is "fixed", how is it possible that amateur players come from nowhere to win millions of dollars every year at the World Series of Poker? You should probably do your research before making claims about something you clearly know nothing about.

[mybillz]

I hate to say it but any body that is foolish enough to trust an online poker game in the first place would likely buy a bridge from the right salesperson.

There is no way to tell if the game is rigged to find the best cards that you don't already have. The house could win any time it wants to. And now even the people who seemed to be winning get screwed. Now who would have ever thought that? These guys deserve their sentences to be "in the decades" And they shouldn't get bail without proving the money is legally obtained/earned and not more ill gotten revenue from his criminal activities. He's a low down thief preying on others weaknesses and doesn't even pay the winners!

[casperasop]

You obviously have o idea how poker works... You do not play against the house, only against other players. The way the house gets paid is by taking a small % of every hand played. It may be as little as pennies per hand but as hundreds of millions of hands are played it quickly adds up. What this guy was doing was not cheating people out of money by giving them bad cards... He was just straight stealing the money.

[lesserof2evil]

typical republi-cons, willing to come to defense of crooks, criminals, and thieves as long as they wear 3-piece suit and a tie.