The United States District Attorney’s Office has retained the Lake Success-based Garden City Group as claims administrator to oversee compensating eligible victims of fraud reportedly committed by online poker service Full Tilt Poker.
“The Garden City Group brings a track record of handling the administration of some of the country’s largest and most complicated settlements,” Manhattan U.S. Attorney Preet Bharara said in a statement. “With their selection, we take a significant step forward in the process of compensating victims of the Full Tilt Poker scheme.”
In July 2012, the United States entered into settlement agreements with Full Tilt Poker and PokerStars – two of the three online poker companies named as defendants in a suit alleging bank fraud, wire fraud, money laundering and illegal gambling offenses.
Under the terms of the settlement with Full Tilt Poker, the company agreed to forfeit virtually all of its assets. The suit alleged that Full Tilt Poker defrauded its players by misrepresenting to the public that player funds held by Full Tilt Poker were safe, secure and available for withdrawal at any time. However, the company reportedly did not maintain funds sufficient to repay all of its players and instead, utilized player funds to finance more than $400 million in dividend payments to Full Tilt’s owners.
Under the terms of the settlement with PokerStars the company agreed to forfeit $547 million to the United States and to assume Full Tilt Poker’s liability for the approximately $184 million owed by Full Tilt to foreign players. The PokerStars settlement also provides that PokerStars will acquire the Full Tilt’s assets from the government and also precludes PokerStars from offering online poker for real money in the United States unless and until it becomes permissible to do so under law.
Utilizing funds forfeited from PokerStars, the Department of Justice will establish a process by which eligible U.S. fraud victims will be able to seek compensation for their losses. The Garden City Group, a class action settlement and bankruptcy administration company, will process claims submitted by the U.S. Full Tilt fraud victims.
The three-decade old firm has worked on numerous complex administrations, including the Gulf Coast Claims Facility; the Deepwater Horizon Economic and Property Damage Settlement; the Visa Check/MasterMoney Antitrust Litigation; the WorldCom Securities Litigation; and the IPO Securities Litigation.
A total of 11 defendants were charged in connection with the original suit, eight of whom have been arrested. Seven of the arrested defendants previously pled guilty and four have been sentenced.
Information about the claims administration will be posted on the dedicated website GCG has established in connection with the victim compensation process, www.FullTiltPokerClaims.com. Information is also available from the toll-free hotline number at 866-250-2640.