Class Action Lawsuit Against Full Tilt Poker Could Complicate Sale
Potentially complicating a tentative saleof a majority stake in Full Tilt Poker is a class action lawsuit filed in the Southern District of New York on Thursday under the RICO statute. Nick Hammer, Robin Hougdahl, Steve Segal, and Todd tbt4653Terry have filed the complaint against Full Tilt Poker, which seeks “return of U.S. player funds and for damages under the RICO statute.” Read the lawsuit.
A slew of defendants are named in the class action suit, including Ray Bitar and Nelson Burtnick, who were indicted as part of the Black Friday legal proceedings in April. Also named are Pocket Kings, Howard Lederer, Phil Ivey, Chris Ferguson, John Juanda, Jennifer Harman, Phil Gordon, Erick Lindgren, Erik Seidel, Andy Bloch, Mike Matusow, Gus Hansen, Allen Cunningham, Patrik Antonius, and “John Does 1-100.”
The 58-page filing begins with a recap of Black Friday, in which the U.S. Department of Justice filed indictments against 11 individuals associated with Full Tilt, PokerStars, Absolute Poker, and their payment processors.
The suit begins by spinning readers back to 2006: “As a result of regulatory changes, Full Tilt lost most legal means of accepting and processing U.S. player funds… Accordingly, at all or some relevant time between 2006 and March of 2011, Defendants joined together to form an Enterprise… The Enterprise was formed for the purpose of processing U.S. player funds for Full Tilt. But, the Enterprise achieved that end through illegal means.”
Hammer, Hougdahl, Segal, and Terry then assert that Full Tilt Poker “tricked U.S. banks and financial institutions into extending credit for transactions that otherwise would have never been approved.” They added that $150 million is due to U.S. players, funds that could potentially be available should a tentative sale to European investors be finalized.
The suit also attacked reassurances from Full Tilt Poker that players’ funds were secure: “Full Tilt’s statements are of little comfort to U.S. players who, in some cases, have hundreds of thousands of dollars tied up in their inaccessible Full Tilt player accounts.” PocketFives.com has heard of members of the industry who have eight-figures locked up.
PokerStars’ processing of player cashouts starting on April 28th is outlined in the closing pages of the legal action. It then summarizes, “Plainly stated, RICO Defendants ran the Enterprise and directed the Enterprise to engage in a broad scheme to defraud and lie to U.S. financial institutions, the Federal Reserve, and Plaintiffs about the nature of their business.”
What did Terry (pictured) and company ask for? Among other things, their player funds plus interest, triple damages, “an order enjoining the Defendants from continuing to block the Plaintiffs’ and class action members’ access to their Full Tilt player accounts,” and a “declaration” that the defendants have violated the RICO Act.
Players on PocketFives have been discussing the news in a Poker Sites thread. One responder argued, “I read the complaint. It seems well conceived and pretty fact-specific. The facts in the complaint appear to be accurate (based upon what is in the public domain) and show solid understanding of the players and the acts… Sorry folks. This all looks like a good thing. I hope (and think) that we will get our money back many stages before joining and riding out a class action lawsuit. But the people behind this suit are likely coming from a good place.”
On Friday, it was revealed that a tentative deal is in place for a group of European investors to purchase a majority stake in Full Tilt Poker, perhaps allowing Americans to receive their funds, according to the Wall Street Journal.
Whether the lawsuit will complicate the recently announced sale remains to be seen. Poker Players Alliance State Director Patrick Skallagrim Fleming posted on TwoPlusTwo, “If FTP is truly shopping for buyers/investors, then the existence of a RICO triple damages class action is another real concern for any buyer/investor.”
Full Tilt Poker has not yet provided any public comment on the suspension of its gaming license. Read the entire class action lawsuit against Full Tilt Poker.
