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A handful of folks claim to have benefited from the Full Tilt Poker ponzi scheme that was revealed by the US Attorney in the Southern District of New York last week. Adam Levy, a 26-year-old from New York is one of them.
He told the Wall Street Journal this weekend that, upon trying to transfer funds to what was once the world’s second largest Internet poker room, he quickly turned $150 into $9000 before the money was even verified in his account. Turns out, that money was never verified in his account.
"I was never intending to defraud the site," Mr. Levy says. "I always thought that eventually they were going to take the money, and I made sure there was money in my bank account for that purpose. It just never happened."
$130 million in phantom money was discovered as part of the US Attorney’s investigation.
Last week, poker pros/shareholders in Full Tilt Poker, Chris Ferguson and Howard Lederer, were named as defendants in a civil complaint alleging they and other company executives pilfered millions of dollars from player funds to pay their own salaries. Two co-founders of Full Tilt Poker were indicted on April 15 and charged with money laundering and bank fraud. Since that time, no US players have been paid. The company was shut down globally on June 29.
Full Tilt relied mostly on a company, Vensure Federal Credit Union, to process funds from U.S. players, the Wall Street Journal reported.
By then, Vensure had gone from a nearly illiquid "sleepy little credit union" connected to a defunct Knights of Pythias lodge in New York's Adirondack mountains into a fast-growing processor of online poker funds, federal credit-union regulators said in a May filing after they took control of Vensure, whose business they said was too risky.
Several executives of the credit union didn't respond to recent requests for comment. In July, Vensure Chief Executive Tom Lindsay said in an interview that Vensure had complied with U.S. laws. In a federal court filing seeking to reverse its seizure by regulators, Vensure said that it had provided the regulators full transparency and proof of the legality of its poker-payments processing. The Justice Department hasn't accused the credit union of any wrongdoing.
In 2009, a surge in Vensure's assets attracted scrutiny from federal regulators. A year later, they determined that the company was processing online gambling funds, according to a court filing by regulators.
Under this scrutiny, Vensure, through attorneys, tried to persuade federal authorities its actions were permissible under the 2006 law, according to its court filings. By December 2010, however, it had stopped processing transactions for players in 17 states, according to an audit the company filed in federal court in April.
- Chris Costigan, Gambling911.com Publisher
