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It’s going on six months now since Full Tilt Poker, the former number two site in the online poker industry, had its license revoked by the Alderney Gambling Control Commission, almost nine months since the news broke that the management of Full Tilt Poker had nearly drained the coffers of players’ money and almost a year since the “Black Friday” indictments started this ugly chain of events. In that span of time, the poker world has been divided – and not equally – as to who to believe: that those in charge of Full Tilt knew nothing or that there was grand conspiracy.
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- Full Tilt Poker scandal Main article: U. Scheinberg et al. 336) In 2004, Ferguson was one of the founders of the online poker site Full Tilt Poker. On September 20, 2011, the United States Department of Justice amended an existing civil complaint against Full Tilt Poker, an online poker company of which Chris Ferguson was a director.
A simple look at two of the most respected voices in the poker community over the past few weeks demonstrates both sides of the issue.
The last we have have seen of the Full Tilt Poker scandal was on April 24th 2012 when it became known that the deal between BTG, the DOJ and Full Tilt Poker fell through. On the same day PokerStars released a statement on their website about rumors of being interested in purchasing Full Tilt Poker.
Daniel Negreanu has not held back his disgust over the actions of Full Tilt Poker, letting his voice be heard over a variety of media. Earlier this month in an interview with Poker Player UK, Negreanu expressed the opinion that the entirety of the Lederer family was “scoundrels” (amid other incendiary comments) and he didn’t stop there. In a blog posting on his Full Contact Poker site, he enunciated his views even more, stating that “Ray (Bitar) is a buffoon, Howard (Lederer) is arrogant and Chris (Ferguson) is a liar.” Just last week prior to his deep run at the Latin American Poker Tour Grand Final, Negreanu took it a step further with a video blog, saying that he would have no problem with “Vegas justice” on Lederer in that he should be “bashed in the nuts with a baseball bat.”
After those vitriolic outbursts from Negreanu, the “Godfather of Poker,” Doyle Brunson, decided it was time he put his two cents into the mix. In a blog posting on his own website – and after admitting it was his own personal opinion – Brunson stated, “Was Full Tilt guilty of gross negligence and terrible mismanagement? Yes, of course.” He then attempts to defend two of the alleged perpetrators of the Full Tilt fiasco, Lederer and Ferguson, in a logical look at the situation.
Brunson states he had inside knowledge from Jack Binion, who at one time was potentially looking at purchasing Full Tilt, that Ray Bitar took over control of the entirety of the Full Tilt operation in 2008, at the suggestion of Ferguson. As the site grew, Bitar began to hand out huge checks to the members of Team Full Tilt and the board of directors, leading Brunson to ask, “If you were a stockholder, would you question the management of a company sending you hundreds of thousands of dollars each month? I doubt you would.”
Once issues began to arise for Full Tilt, Bitar allegedly continued with the huge payouts while trying to figure a way out of the situation. “Bitar might have worked things out, but Black Friday happened,” Brunson states. He also believes that none of the stockholders knew anything about the issues with FTP, writing, “I’m not defending nor persecuting anyone. Ferguson had a lot of faith in Bitar. I have been in contact with Lederer and, when someone I’ve known for years, trusted, and respected looks me dead in the eye and says he didn’t know about the financial problems, call me a big old Texas sucker because I will believe them.”
As you can see, when two of the poker world’s most respected members cannot agree, there are bound to be plenty of questions.
When did members of the board of directors and/or the members of Team Full Tilt know anything? This is the nagging question that many have over the Full Tilt tragedy. If those either in charge of the direction of the company or those representing the company were “in the dark” as to what was occurring, then they aren’t good businesspeople (a factor that Brunson alludes to in his blog). If they knew – and kept on taking the money – then it does border on criminal the activities they conducted.
Are Bitar, Lederer and Ferguson the “fall guys” for Full Tilt’s failure? Because they have allegedly received a sizeable chunk of money for their operation of the company, they have borne the brunt of the poker world’s outrage. At the same time, however, perhaps Lederer and Ferguson are as clueless as Brunson states. Maybe even Bitar was simply operating the business to the best of his abilities and, through the bad timing of the “Black Friday” indictments, the mismanagement of Full Tilt was discovered. As we have seen over the past couple of years, businesses make bad decisions all the time that eventually end up costing them severely, even to the point of dissolution.
Finally, to what extent should the players behind Full Tilt Poker be held accountable? As stated previously, Lederer, Ferguson and Bitar are the faces that have been blasted by the poker world, but what of some of the other members of Team Full Tilt? Should Phil Ivey be held liable for the actions of the organization? What about the players who allegedly owe money to Full Tilt from loans handed out by management? What is the level of blame on the other members of Team Full Tilt? Brunson states in his blog post that “I don’t want to keep them from rejoining the poker world. Where do you stop the level of responsibility?”
As always with highly charged debates – and as with most things in life – the answer to many of the questions (and more) probably lies somewhere in the middle of the two extremes. But the ongoing silence of the many players in the Full Tilt Poker fiasco – as well as the molasses-like pace of any resolution of the issue – only seems to be further inciting the ire of the poker community.
Full Tilt Poker’s player pool was fully integrated into PokerStars on May 17 and the poker platform was officially retired. In the wake of the final closure of what was once one of the largest online poker sites in the world Howard Lederer, a former board member of the now defunct business, has opted to put out a statement through Daniel Negreanu’s poker blog.
Lederer has been a persona non grata in the poker world after the fiasco that followed the U.S. Department of Justice’s actions on April 15, 2011. Players with money in accounts on Full Tilt Poker looked as if they might not ever retrieve their funds after poker’s Black Friday as a result of the site’s failure to segregate player funds from the money used to operate the business. Players only received any form of relief when PokerStars announced that they would buy the company and pay out player’s balances.
Negreanu posted Lederer’s statement and also gave his own commentary, saying it is, “the kind of apology people would have liked to read five years ago.” Lederer’s full statement can be found below. For more of Negreanu’s thoughts on it, check out his blog post which can be found here.
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Howard Lederer Poker
I am writing to apologize to everyone in the poker community, especially to all the players who had money on Full Tilt Poker on April 15, 2011. When Full Tilt Poker closed in 2011, there was a shortfall in funds, a distressed sale to recover those funds, and a long delay in repaying players. Throughout this period, there was little explanation for the delay, and no apology. Players felt lied to. They trusted the site, and they trusted me, and I didn’t live up to that trust.
I take full responsibility for Full Tilt’s failure to protect player deposits leading up to Black Friday. The shortfall in player deposits should never have happened. I should have provided better oversight or made sure that responsible others provided that oversight. I was a founder in the company that launched Full Tilt, and I became the face of the company’s management in the poker community. Many of our players played on the site because they trusted me.
Even though I was no longer overseeing day to day operations, my inattention in the two years leading up to Black Friday imperiled players’ deposits. My involvement in Full Tilt from 2003-2008 put me in a unique position of trust—a trust that I disappointed by failing to ensure that Full Tilt was properly governed when I stepped away in 2008. My failure to make sure proper oversight was in place when I left resulted in the situation that began to unfold on Black Friday. Players were not able to get their money back for a minimum of a year and a half, and, for many, it has been much longer. I’ve been a poker player my entire adult life. I know the importance of having access to one’s bankroll. The lost opportunity, frustration, and anxiety many of FTP’s customers experienced in the intervening years is unacceptable. I cannot be sorry enough for what happened.
During Full Tilt’s rise, I received a lot of praise. I couldn’t see it at the time, but I let the headlines change me. In the first couple of years after Black Friday I made lots of excuses, to my friends, my family and myself, for why I wasn’t the bad guy or big-headed or wrong. In the months immediately following the crisis, I focused a lot of energy on trying to refute allegations that were factually untrue. I convinced myself that I was a victim of circumstance and that criticism was being unfairly directed toward me instead of others. I was missing the bigger picture.
At a wedding in the fall of 2014, I was sitting with a friend, talking about Full Tilt. I was grumbling about how unfair my lot in life had become. My friend didn’t let me off the hook. I’m paraphrasing here, but he said, “Howard, it doesn’t matter whether you knew about the shortfall or what you did to help players get paid. These players feel like you lied to them. You were the face of the company in the poker community. Thousands of players played on the site because they trusted you. Many pros represented the site because they thought you were in control. And you happily accepted the accolades while falling short of their trust.”
At the time, my friend’s response felt like a slap in the face, but it is clear to me now that it was fair. An apology is not enough, but it is what I am able to offer to the poker community in the wake of a travesty that I should not have allowed to happen. I am sorry.
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Following Black Friday Lederer settled with the U.S. Department of Justice. In exchange for the opportunity to admit to no wrongdoing in the civil complaint that stemmed from Full Tilt’s failures Lederer forfeited at least $2.5 million in cash and assets, including several pieces of real estate property and vehicles. He also handed over the contents of a bank account, although the settlement didn’t specify the amount of the funds in that account. Lederer was paid at least $42.5 million by Full Tilt over the course of his involvement with the company, which he helped in founding.
With those forfeitures in mind and this apology made, has Lederer even begun to mend the bridges burned by the Full Tilt fiasco and his failure to take responsibility for the site’s mismanagement?
“The choice to accept his apology is a personal one,” says Negreanu. “For what its worth, I personally believe the apology to be genuine.”
Howard Lederer Scandal
Genuine or not, Lederer likely has a long way to go before he is able to play in poker’s biggest events without facing hostility and contempt.