kp
kp
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September 20th, 2011 at 1:54:28 PM permalink
If they were using player deposits to fund operational costs, including salaries, while relying on future deposits to cover any withdrawals, then, yes, that is very much a ponzi scheme.

Quote: FleaStiff

Yes, its a mess. A mess that was contained and controlled prior to the government tipping it over.


Most ponzi schemes tend fall apart once they are revealed.
FleaStiff
FleaStiff
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September 20th, 2011 at 2:01:13 PM permalink
Yes. Defense lawyers are expensive and the toll on the defendant's health is horrendous so its often easy to accuse in the headlines and then get a guilty plea to lesser charges.
FleaStiff
FleaStiff
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September 20th, 2011 at 2:03:26 PM permalink
Quote: kp

If they were using player deposits to fund operational costs, including salaries, while relying on future deposits to cover any withdrawals, then, yes, that is very much a ponzi scheme.

If that had been the game all along, I would agree. If that is what was happening only after the government seized funds, then no.
Nareed
Nareed
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September 20th, 2011 at 2:54:45 PM permalink
Quote: Wizard

I'm not a lawyer but I don't see any grounds here for a counter-suit. If they could claim libel and slander, why couldn't anybody do the same who beat a criminal case? For example, OJ could claim that his reputation was slandered by the LA District Attorney's Office after the jury in the criminal case found him not guilty.



I'm surprised he didn't.

To your questions, a prosecutor who brings forth charges in good faith is discharging his duty and is not liable for anything he says or does in court. He might be liable for statements made outside of court that slander the defendant, but only so long as 1) the statements made are false and 2) the prosecutor knows them to be false.

It's more common, I think, to sue a DA's office for wrongful prosecution. I imagine that's also a lot harder to prove. You'd ahve to show the DA knew the charges to be false and/or impossible to prove on the evidence available, yet proceeded to file charges.
Donald Trump is a fucking criminal
boymimbo
boymimbo
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September 20th, 2011 at 2:56:54 PM permalink
I am thinking that the charges are trumped up from the Black Friday charges. If these poker players and executives are receiving payments that are designated to be in customer deposits with the intention of never paying it back, then there is a problem.

When you think about what a Ponzi scheme is, it's the use of an asset for the permament gain of its employees. All companies use the cash they have on hand to either pay its bills or fund capital investment. What a Ponzi scheme is the intentional use of a fund for the gain of a member of the company.

For Full Tilt, customer deposits are supposed to remain as a cash deposit. Of course, Full Tilt should be allowed to invest those deposits or even use some of its funds to pay off short term accounts payable. The point is however that the cash deposits belong to the depositors and should be readily convertable to cash. However, clearly, the government believes that the level of deposits was so low that it would be impossible to pay back the depositors AND that there is a direct link between the customer deposits and the payments to its board members.
----- You want the truth! You can't handle the truth!
Tiltpoul
Tiltpoul
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September 20th, 2011 at 3:22:11 PM permalink
Quote: Nareed

I'm surprised he didn't.

To your questions, a prosecutor who brings forth charges in good faith is discharging his duty and is not liable for anything he says or does in court. He might be liable for statements made outside of court that slander the defendant, but only so long as 1) the statements made are false and 2) the prosecutor knows them to be false.



As I said in the beginning of my post, to me, it sounds like the government is grasping for straws in a way to prosecute and maintain criminality in playing a game between other players. In this case, the prosecutor may be throwing some mud hoping there is truth in the matter.

As others have also pointed out, calling it a Ponzi scheme is extremely misleading. That may have been the article's choice of words, but if the DA is accusing THAT, when it's something else, then the truthfulness of the prosecutor could be called into question by the defense.

Quote: Nareed


It's more common, I think, to sue a DA's office for wrongful prosecution. I imagine that's also a lot harder to prove. You'd ahve to show the DA knew the charges to be false and/or impossible to prove on the evidence available, yet proceeded to file charges.



I'm not a lawyer either, but this sounds more correct. Again, I maintain that the government is trying to find a way to criminalize the acts of people are innocent, so I'm pretty sure the case would hold up.

Maybe I think too much of the players involved, but Lederer, Ferguson and the players mentioned are very smart individuals. I know, I know, smart individuals can be the greatest crooks, but what did they have to benefit from it? Full Tilt would have made all their money in rakes. Yes they spent a lot in advertising. If the company mixed operating expenses and player funds while the operation was still continuing, AND THEY HAD KNOWLEDGE OF IT, then yes, I hope they get what's coming. If it happened afterwards, and they KNOWINGLY blocked funds from being paid out, then yes, that's a problem.

Frankly I just don't think either one of these scenarios is plausible; I should restate that I don't think the PLAYERS would have willingly accepted or taken part in that. They were the face of the company, and involved, but they didn't own, and I just can't see them getting dirty with it... then again, that could be wishful thinking.
"One out of every four people are [morons]"- Kyle, South Park
kp
kp
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September 20th, 2011 at 3:22:13 PM permalink
Quote: boymimbo

If these [...] executives are receiving payments that are designated to be in customer deposits with the intention of never paying it back, then there is a problem.


Only if they never had intentions of "paying it back"? If that were a viable defense, then every embezzler would get off on the "I was planing to pay it back" defense.

Quote: boymimbo

Full Tilt should be allowed to invest those deposits or even use some of its funds to pay off short term accounts payable.


Why?
If you go to the cage to cash in some chips, would you accept that the casino had used your funds to pay an executive bonus or invest in crochet futures, and told you to come back next week when they hope to pay you?
boymimbo
boymimbo
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September 20th, 2011 at 3:48:55 PM permalink
kp,

Casinos, by law, in Nevada, must keep enough cash in reserve to pay every chip on the floor. However, companies like WalMart or your local convenience store are not required to keep cash deposits to cover its inventory. However, it is required to be able to pay back money left in layway. Customer Some companies run very short on cash. Banks are another example. If every customer of the bank came to the branch and required its deposit back, the bank would have to call in mortgages to cover. The point is that a bank must have some very liquidable assets (stocks, short term bonds) to cover all of its customer deposits. Full Tilt failed to do so, instead electing to use a significant portion of its customer deposits to pay its boardmembers.

It would make sense to have a different account outside of operating capital for customer deposits. These deposits should be held separately. Was there a law for this in Full Tilt's jurisdiction?
----- You want the truth! You can't handle the truth!
avargov
avargov
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September 20th, 2011 at 3:52:59 PM permalink
I just heard a report on the radio about FT owing players over 300 million, but less that 6 mil in cash is accounted for. Lederer has received 42 mil in payments, Jesus 25 mil with 62 still owed him.

Seems like something fishy was going on.
Before you diagnose yourself with depression or low self-esteem, first make sure that you are not, in fact, just surrounded by assholes." ~ William Gibson
Wizard
Administrator
Wizard
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September 20th, 2011 at 4:41:26 PM permalink
Quote: boymimbo

Casinos, by law, in Nevada, must keep enough cash in reserve to pay every chip on the floor.



It is not that simple. There is a formula based on such things as the number of slots, tables games, game limits, and gross revenue of the casino. I think MathExtremist posted the exact formula several months ago.

This does have some elements of a Ponzi scheme -- stealing from player money that should have been in a bank or legitimate investment somewhere. Also, much like a Ponzi scheme, it probably would have kept working as long as there was not a run on the bank, or the operation got shut down. Where it differs is that there were players instead of investors. Whatever angle the DOJ has to take so that players at least get more of their money back I support.
It's not whether you win or lose; it's whether or not you had a good bet.

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