NEW YORK (AP) — Settlement deals reached between federal prosecutors and three Internet poker companies call for more than a half billion dollars to be paid to the government, enabling U.S. poker players to recover more than $160 million lost when the companies shut down U.S. operations last year, authorities said Tuesday.
U.S. District Judge Leonard B. Sand approved settlement agreements with PokerStars and Full Tilt Poker. A separate agreement between the government and a third company, Absolute Poker, had not yet been approved by the court.
PokerStars said in a release that its deal with the U.S. Department of Justice calls for it to pay the government $547 million over three years with the money being used in part to reimburse former U.S. customers of Full Tilt Poker.
The company also said that $184 million representing outstanding balances owed to non-U.S. customers of Full Tilt Poker will be made available in a segregated bank account that can be accessed with no restrictions on withdrawals. PokerStars said it has acquired the assets of Full Tilt Poker.
The U.S. operations of the companies were shut down when the government last year brought criminal charges against various poker company executives and those who helped the companies process money.
Prosecutors said Full Tilt Poker had only $60 million left in its bank accounts to cover the $390 million it owed its players when the government revealed its case last year. About $160 million was owed to U.S. players. It said the company over a four-year period used $444 million in player money to pay board members.
U.S. Attorney Preet Bharara last year called the company was "a global Ponzi scheme."
The government said the settlements announced Tuesday do not constitute admissions of wrongdoing, liability or guilt by any of the parties. The deal with PokerStars allows it to re-enter the U.S. market if laws change to permit online poker.
In a statement, Bharara said the deals will "allow us to quickly get significant compensation into the victim players' hands."
FBI Assistant Director Janice K. Fedarcyk said: "Pokerstars and Full Tilt bet the house on their illicit scheme; fortunately, we were holding the trump card."
Jerry Bernstein, a lawyer for Absolute Poker, said the company's deal with the government calls for it to forfeit its assets to the government. Continued...