Full Tilt was running Ponzi Sceme?

[pylon]

I have watched a guy who I know through a friend rig an online game, on a major site in real time, and make 2 grand in an hour playing low limit tables. The guy made a very healthy living for about 5 years, and reinvested it all into a pretty sizeable business, and paid off his house, playing poker part time, and getting a University degree all at the same time.

He didn't do it through hacks that showed him cards, but he did it through setting up multiple "machines" on one PC, held 4 of the 8 seats at the table, and clean out everyone else out by strategically betting and moving the money around through his 4 players, and driving up the pots. I don't know the exact logistics behind how he did it, as I thought they tracked IP's on the sites, but I witnessed it with my own two eyes. He would even purposely lose the odd hand to keep under the radar. The guy had close to 200 different logins for some of the sites, and multiple netteller accounts. The guy capped himself at $5000/day, between 3 sites, as to not raise red flags. It was a pretty complex gig, but whos laws was he breaking? All these sites were based off shore.

Apparantly, he did eventually get caught, banned from a couple sites and lost some winnings, but from what I understand, he made a little over a million bucks in 4 years, cheating the system. After I saw that, I never played online again. I don't know what the security protocols are now, as this was about 5 years ago, but it is not as much the site that scares me, it is the users, and the chance they are colluding/holding multiple seats at the table.

[hmmhmmcamo]

Originally Posted by pylon

I have watched a guy who I know through a friend rig an online game, on a major site in real time, and make 2 grand in an hour playing low limit tables. The guy made a very healthy living for about 5 years, and reinvested it all into a pretty sizeable business, and paid off his house, playing poker part time, and getting a University degree all at the same time.

He didn't do it through hacks that showed him cards, but he did it through setting up multiple "machines" on one PC, held 4 of the 8 seats at the table, and clean out everyone else out by strategically betting and moving the money around through his 4 players, and driving up the pots. I don't know the exact logistics behind how he did it, as I thought they tracked IP's on the sites, but I witnessed it with my own two eyes. He would even purposely lose the odd hand to keep under the radar. The guy had close to 200 different logins for some of the sites, and multiple netteller accounts. The guy capped himself at $5000/day, between 3 sites, as to not raise red flags. It was a pretty complex gig, but whos laws was he breaking? All these sites were based off shore.

Apparantly, he did eventually get caught, banned from a couple sites and lost some winnings, but from what I understand, he made a little over a million bucks in 4 years, cheating the system. After I saw that, I never played online again. I don't know what the security protocols are now, as this was about 5 years ago, but it is not as much the site that scares me, it is the users, and the chance they are colluding/holding multiple seats at the table.

Do you remember what specific sites he was playing on/got banned on?

[metallicat]

And did you report this to the FBI?

[Vulcan]

Isn't this how banks operate?

[Dentoman]

Originally Posted by evman150

Haha you guys have no clue.

These sites have a license for printing money and they're going to risk it all to give you NL25 donks some bad beats?

What's likelier, the poker sites are out to get you and pump up the rake (which maxes out in a $60 pot anyways) or you are a poor poker player?

But hey, like I say, if it's rigged, it's rigged in my favour!

This isn't the point with FTP .... rigged or not, they didn't have the cash to cover the player's accounts. They didn't risk it all on some "NL 25 donks", they risked it all by running a Ponzi scheme and ending up being caught short $300 milliion. If Lederer and Ferguson end up being knowingly involved, it will be a big problem for the future of online poker. I would think the celebrity endorsements are very important to the individual sites.

[BlackEleven]

If you read what happened, that's not a ponzi scheme at all. It's just plain old fashioned embezzlement.

The owners were just stealing money from the accounts, they weren't using that to pay investors with.

[Dentoman]

Originally Posted by BlackEleven

If you read what happened, that's not a ponzi scheme at all. It's just plain old fashioned embezzlement.

The owners were just stealing money from the accounts, they weren't using that to pay investors with.

I suppose.
I never play online. Why would there be that much money in the players accounts? Is there a limit to the amount of winnings you can withdraw at any one time? I would have withdrawn my money after each session, not let it sit in an online gambling account.

[Rathji]

Originally Posted by Dentoman

I suppose.
I never play online. Why would there be that much money in the players accounts? Is there a limit to the amount of winnings you can withdraw at any one time? I would have withdrawn my money after each session, not let it sit in an online gambling account.

There are fees for withdrawal as I recall. Plus the delay would mean you would have to have a huge amount tied up in money that was in the process of being transferred back to you.

You also need to consider that many players sit down and play for a couple hours every day, so to have to make a CC deposit every time would be very annoying.

[burn_this_city]

I agree with the people that say the rakes should be incentive to run the site above board. But with the revelation they were running a ponzi scheme on one site, you'd wonder how they ever thought they'd get away with it, unless they never intended for the majority of players to cash out. Which means at the end of the day almost everyone would lose, which doesn't make sense if the rake was all they were taking.

[Raekwon]

Isn't it a Ponzi Scheme because they were paying people out without having enough money to cover winnings?

Originally Posted by BlackEleven

If you read what happened, that's not a ponzi scheme at all. It's just plain old fashioned embezzlement.

The owners were just stealing money from the accounts, they weren't using that to pay investors with.

[Mazrim]

I hope Poker Stars buys the rights to Rush Poker. That and home games would make it a pretty safe home for me to play poker from now on.

Tom Dwan doesn't think that FT was a ponzi scheme, just a very poorly run operation. So I'll wait and see what really comes out of the trial before passing judgement on exactly what happened.

[BlackEleven]

Originally Posted by Raekwon

Isn't it a Ponzi Scheme because they were paying people out without having enough money to cover winnings?

If it was a ponzi scheme they would have taken money out of the accounts and used that to pay investors in order to attract more investors, and then done that again and again until the scheme eventually ran out of money. All they did was just take money out of player accounts and keep it for themselves.

[BlackEleven]

Originally Posted by Dentoman

I suppose.
I never play online. Why would there be that much money in the players accounts? Is there a limit to the amount of winnings you can withdraw at any one time? I would have withdrawn my money after each session, not let it sit in an online gambling account.

Most people don't withdraw after winning, they use their winnings to fund future games or higher stakes games. It would be pain to constantly withdraw and deposit money. And when they do withdraw, they don't usually withdraw everything. This still leaves a lot of money in the sites accounts that can be embezzled.

[afc wimbledon]

It will be interesting to see how Federer and Ferguson explain it all on 'Poker After Dark' when they have the 'ordinary guy gets to play with the stars' segment and some Joe Schmoe across the table starts demanding his money back.

[Dentoman]

Originally Posted by Mazrim

Tom Dwan doesn't think that FT was a ponzi scheme, just a very poorly run operation.

Maybe so, but to be out $300 million seems more than a "poorly run operation" when all they had to do was collect the rake and take some small percentage upon withdrawal.

[VladtheImpaler]

I have played on almost all the sites, and the only one I never got a bad "vibe" from is Pokerstars. If I wanted to cash out, the cheque would be in my mail box within a week. When I cashed out more than $1,000 at a time, the cheques would arrive by FedEx within a couple days. There are no cash-out charges. The money came from a Canadian entity. At this point I would not play on any other site.

[nfotiu]

This is the part that describes the ponzi scheme part of things.

The Forbes article explains that Fill Tilt Poker's cash flow problems began in 2010 because of a federal government crackdown on online poker sites that disrupted the payment processing account, preventing Full Tilt from withdrawing money from U.S. players' accounts. U.S. government lawyers claims that Fult Tilt continued to credit players accounts with what amounted to $130 million of 'phantom funds,' a practice that backfired (much like Bernie Madoff's ponzi scheme did) when players won the fake money and could not cash out.

Even though they couldn't process Americans' deposits, they credited the accounts anyway, putting way more money into play than they actually collected.

[getbak]

Originally Posted by afc wimbledon

It will be interesting to see how Federer and Ferguson explain it all on 'Poker After Dark' when they have the 'ordinary guy gets to play with the stars' segment and some Joe Schmoe across the table starts demanding his money back.

I think it's safe to say that Poker After Dark is dead as a FTP sponsored show. You've probably also seen the last of a lot of their guys on tv too, especially Lederer.

[return to the red]

Originally Posted by VANFLAMESFAN

I've taken some bad beats on Party Poker, but that's the game. It happens. I've also sucked out HARD and taken plenty of cash from Party Poker. The poster above who said he had 6 casino bad beats within a couple hours, I have a hard time believing that. Not saying you're lying, but that's pretty unbelievable if you saw a straight flush losing to a royal a couple times in a few hours. I haven't seen one casino bad beat in my time online or at an actual casino. Just my personal experience. I hear about it every now and then when I go to the casino.

Could the online sites be rigged? Sure. Do I believe that it is? Not really.

Do I think it's rigged, no but for the amount I play it would seem as though the "random card generator" isn't all that random.

I often play 4 or 5 tables at a time and one thing I have noticed is more often than not cards seen on one table will often duplcate on another table. I understand that there are thousands of tables but when I'm sitting at 4 and 3 of them have the same cards pop up but in different suits within a hand of each other it makes me somewhat skeptical.

I'm not complaining though as I do ok in the online poker world.

[nik-]

Hey, I'm all for anything that kills Poker on TV.