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Department of Justice Settles Lawsuit With PokerStars And Full Tilt Poker For $731 Million
On Tuesday August 7, 2012 the Department of Justice agreed to settle their lawsuit with PokerStars and Full Tilt Poker. The lawsuit was a result of what is now known as Poker Black Friday, where government prosecutors in Manhattan filed charges of civil bank fraud and money-laundering against the online poker sites and seized their domain names and Full Tilt's funds. They also brought criminal charges against their founders. Later, the government charged executives of Full Tilt of operating a Ponzi scheme and stealing millions of dollars from gamblers accounts. Basically, prosecutors accused Full Tilt owners of taking money out as fast as it came in and not have the funds necessary to pay players as they cashed out. In the end, they owed more than they could repay.
The settlement states that Full Tilt poker will forfeit to the government virtually all of its assets, after which the government will sell them to PokerStars. PokerStars will pay a total of $731 Million dollars. PokerStars will repay the approximately $184 million owed by Full Tilt to Non US players. PokerStars will forfeit $547 million to the government. Full Tilt's U.S. players can request compensation from this $547 million. Full Tilt agrees to the settlement and will cease independent operations. None of the companies admitted wrongdoing as part of their agreements.
The settlement also sets the stage for PokerStars to re-enter the U.S. market. PokerStars can apply to relevant U.S. gaming authorities, under both PokerStars and Full Tilt Poker brands, to offer real money online poker when state or federal governments introduce a framework to regulate such activity.
PokerStars will be barred from employing Full Tilt Chief Executive Raymond Bitar, who faces criminal fraud charges and is now out on bail, as well as part-owners and famous players Ferguson and Howard "The Professor" Lederer, who remain defendants in the civil case. Also, pokerStars founder Isai Scheinberg, who also faces criminal gambling, fraud and money laundering charges, would no longer serve as an executive or director.
The schedule of payouts to players is pending on PokerStars sending a $225 million payment to the DOJ within seven days. The payment makes the deal official and starts the 90-day countdown that PokerStars has to repay all non-US players. US players do not know how they get repaid as of yet but this will probably be detailed once the deal is final. Hopefully it will be clear how US players can petition the DOJ to get back their funds.
In a related matter, the court was asked to accept an agreement with Absolute Poker and Ultimate Bet, which requires the company to forfeit all of its assets to the government.