1&2 are exceptionally unlikely. Bitar et al are going to cut some sort of a deal long before they accept even the possibility of prison time. ANd part of that deal is going to be that the DOJ gets to keep at least all the money it already has.

thanks for that mpethybridge just couldnt understand why there has been more discussions or questions on this area of the statement as we knew that the DOJ froze accounts on or after BF but no one really knew it had been going on prior to the event

I find this interesting considering if you or me did this it would be consider theft.

Why would they need to lose on all counts considering they would have taken this money based on the UIEGA. This has nothing to do with Bank Fraud and MOney Laundering which are seperate.

Why wouldnt the DOJ be required to return these funds if FT proved Poker is not illegal?

because the player funds aren't seperate. They would keep them towards the bank fraud and money laundering fines.

So Harry says there is another solution "in the works" to resolve this situation for the players and likely others? Details are not available. Normally with most posters we should be big doubters (levels, trolls, liars) but this source is pretty credible IMHO. Not bad news at least. Good luck to you all.

Pocket Kings Ltd doesn't receive all of the rake. It receives all of its money from a company called My West Nook, which is another FTP company. The reason that its gross profits and its costs go up in tandem is almost certainly because My West Nook is simply paying PKL as much money as it needs to operate.

That same concept is why those docs aren't incredibly helpful. PKL is one company of many, so all of its numbers are essentially artificial--it's "gross profit" is just how much money some other company sent to it that year, and it's sale of fixed assets etc are probably just moves of assets (perhaps not even real assets) between companies for accounting purposes.

The one really helpful piece of information in those docs is PKL's running costs. That's good to know. IIRC it's like 110M euros/year. Of course, that's over a year old, and that was back when they had a poker site to run.

They did lay charges.

FTP used the wrong terminology. (Hopefully the DOJ doesn't notice!) They meant to say "frozen by, seized by, or forfeited to the DOJ."

Money that is frozen is frozen pending trial. In your words, the DOJ has laid charges against the companies that are sufficiently serious and plausible that a judge (and in some cases, also a foreign governmentt) has agreed to hold onto some money until the trial.

Money that is seized or forfeited (There's a distinction, but I don't really get it) has been won at trial or in a settlement. I believe that FTP has not contested any of the charges before Black Friday (though they have filed a response to the Black Friday charges), so most of that money has already been forfeited as their respective US Attorneys won their trial by default.

You have this completely backwards. Tiltware owns Pocket Kings (although there are other intermediate companies in between I believe), not the other way around. Tiltware pays Pocket Kings to operate (through some company called My West Nook).

PK's admin costs are all the boring things--employee salaries, rent for a massive office building, internet for a massive office building (with a static IP address!), various utilities for a massive office building, cleaning services and stuff like that, computers, ridiculously fancy food for the employees from a private chef, etc etc.

Incidentally, this fact sorta goes against the whole "We didn't think we were doing anything wrong" argument, doesn't it? They forfeited huge amounts of money to the DOJ without even contesting the charges....

To forfeit something doesn't the entity who is recieving it already need control (like it being frozen, signed as guarantee or something along those lines) while seizing is taking control of assets they don't already have direct control over?

I am pretty sure most of us know that FTP is dead, the question is when FTP will burn the last $ of his players and completely shut down, has the point already been passed (I mean the net worth is already in RED)?

I actually never knew how Tiltware was related to FTP since everyone always kept talking abt PK. Thanks for the info. And I can totally see the level of your frustration when you use massive 3 times in that sentence.

This 'seized money' was probably money held by processors (in their own, or arms length, bank accounts) not money held by Tilt. The Rennick case showed that 'Tilts money was smooshed up with other merchant's money - including sportsbooks - so chance of recovery was possibly not worth opening pandora's box with legal action. The only time I can see Tilt actually actioning a seizure is when Intabill walked away with 52m/42m and that was done via Kolyma (the Aruban entity that held the KGC licence).

(All above from google)

They absolutely could have laid claim to that money if they wanted to. Evidently, they either didn't think they had a chance to win in court because they knew they were breaking the law, or they were too lazy to hire a lawyer to try to get them back tens of millions of dollars.

Intabill wasn't a seizure; it was a processor who robbed them.

Might as well post the correct way (legally) to use these terms:

1) "frozen" - assets that are frozen are assets that are still in the hands of individuals (or banks, etc.) but are subject to a legal order that prevents them from being moved, used or otherwise affected pending the outcome of further legal proceedings.

2) "seized" means assets that are now actually in the hands of government officials pursuant to a court order and are being held by the government pending the outcome of further legal proceedings.

3) "forfeited" means the assets have gone through all legal proceedings and have been declared the property of the government by those legal proceedings.

The only real practical difference between "frozen" and "seized" occurs when the assets are in a non-US jurisdiction. In that situation the US government needs not only a US court order but also an order from a court in the non-US jurisdiction to change the assets' status from frozen to forfeited.

With respect to FTP it is most correct to say that the money in foreign banks on BF was frozen while the money in US banks was seized. But except for that additional requirement of foreign court action before forfeiture, there is no practical difference between the two.

Skallagrim

Unfortunately there appears to be no way of accessing My West Nook and Tiltware financial statements and annual returns in nay straighforward or easy manner.

If we could do that then maybe we can start putting together the jigsaw and tracking down where the money went.

Another interesting aspect is that companies are supposed to make forward looking statements about material things that are likely to affect their future income and profits. I see no mention of payment processor thefts for the period May 1 2009 to 30 April 2010 unless of course those payments are handled by another FTP company (maybe My West Nook???)

Too few pieces of this jigswaw are accessible but they will invariably come out at some stage in the future via the various court actions.

At that point allocation of blame, fraud and/or theft will be a lot easier to do.

Ty, skall.

It is probably also useful to point out that all the seizures that resulted in forfeitures prior to BF involved money that was in the hands of processors, not FTP itself.

Without going into what would necessarily be a very long and technical legal explanation, this fact extremely complicated the ability of the sites (and, for that matter, US players) to seek return of the money in the forfeiture proceedings.

In the end it was clear that the sites made the decision to simply accept the money lost through DOJ actions against processors as part of the cost of doing business in the US.

While that decision can be argued about, it makes some sense if you also minimize the amount of your money in the hands of processors at any one time. What hit FTP hard on BF (it appears at this time - lots of facts are still not clear) seems to be a combination of having a lot of money in the hands of US processors (or supposed to be - the inability to collect deposits plays a large role here too) and the DOJ's surprise (in the sense they had never done it before) ability to freeze FTP's overseas accounts.

Also an important fact, as has been mentioned before, is that player funds at FTP were not kept in clearly segregated foreign trust accounts like they were at PokerStars. The commingling of player funds and corporate funds exposed a lot more of the money held by FTP to the DOJ's freezing of foreign accounts.

I am sure there were/are other factors at play too, and the above is not meant as full explanation of FTP's situation nor in any way a defense of how they operated.

Skallagrim

cliff notes please..this isn't looking good after all..is poker after dark still running new shows or just re runs

Yes, it does. Their claim that they were operating within the law is a complete charade.

It was always a charade. Business that think they are operating legally don't just keep letting the DOJ seize money again and again without putting up a fight.

The sites,poker media,the PPA,etc had to keep the myth alive by saying there's nothing illegal in what the sites are doing. They had to keep the deposits coming in. Players were mislead and lied to again and again.

Harry has a way of taking what is known\obvious and turning into something that sounds like breaking news. Maybe it's just his way of expressing things but he has no inside information.

I'd be interested to hear your explanation as to how this would benefit the PPA and more so what evidence you have that would lead you to believe they were culpable in hiding the truth.

Hope you are wrong/not in the know, but as usual, who knows? Guess we will see sometime.

The question of the legality of a foreign site offering only online poker in the US has been debated numerous times on this forum and so is not a proper subject for this thread.

But I resent your accusation that my long-expressed legal opinion that a foreign site offering only online poker in the US is PROBABLY operating legally is the result of some hidden motive or a participation in a charade.

I truly find it troubling and disappointing that some folks seem to have to believe that anyone who disagrees with their opinion must be doing so because of some hidden agenda rather than simply accepting that the other person might actually and rationally have come to a different conclusion.

Skallagrim

Skall,
When you say things like this, even if you make it clear that you're speculating, people take it fairly seriously. I recognize that you're not speaking for the PPA when you post speculation like this, but many people think that you are anyway, and most people at least think that you're speaking with some knowledge of the situation.

In fact, this was actually not the first time that the DOJ froze foreign assets of poker sites. They'd done so at least two years ago.

And, you have absolutely no clue how much money FTP had in processor accounts on BF. All you know is that it was less than $115M minus the various amounts that were already known to be seized over the past two years.

Indeed, the fact that it was significantly less than $115M and that they owe somewhere on the order of $300M to customers shows that what REALLY hit FTP hard on Black Friday was the fact that they didn't have anywhere close to enough money to meet their obligations even before Black Friday, and the domain name seizure caused a "run on the bank"[1] that simply asked for more cash than they had.

[1] I put "run on the bank" in quotes for two reasons:

1) FTP's not a bank. It's infuriating when people pretend otherwise, particularly when it comes from Mike Matusow because he almost certainly heard it from one of the people who ran this site as an incredibly stupid justification for their actions.

Banks are able to keep ~10% of customer assets liquid because they have like 200% of customer assets (or whatever the percent actually) in loans and investments and other things that are easily converted into liquid assets. FTP kept some smallish percentage of customer assets liquid while they paid themselves, paid operating expenses, paid for commercials, paid their buddies outrageous fees to wear a piece of felt, paid absurd payment processing costs to the US in order to (allegedly...) get people to commit bank fraud, loaned players hundreds of millions of dollars without bothering to tell them (the shortfall), paid more absurdly high payment processing fees to try to get some of this money back through more (alleged...) bank fraud, etc.

Even if FTP had put player money in government bonds or secured loans or something and kept some of the profit, that would have been slightly different than FTP acting as a bank. (People agree to that when they deposit in a bank. We didn't agree to that when we deposited on FTP.) What they actually did was not at all like what a bank does.

2) The "run" wasn't really much of a run at all.

At the time, roughly half of their player base (US players) were basically waiting patiently for their money, and they had been for a couple months. The remaining half was cashing out relatively slowly and not freaking out much when they learned that cashouts were "slow because of payment processor problems" (outside of the US... where giant legitimate companies like Moneybookers handle all cashouts with absolutely no problems in almost all countries, and where other sites were having absolutely not trouble at the same time...).