PPA provides DoJ with recommended path to refund FTP players

[MyrnaFTW]

Has anyone looked at this from a depositor angle yet?
So I am playing a sometimes "friendly "monthly PLO. In that game we start talking about the whole Pstars , FTP developments , etc. The conversation finds its way into the DOJ's wording of calling FTP a ponzi scheme . A hedge fund guy deposited 100k plus (learning plo) , another "near" there and a lawyer also stated 5 figures . the hedge fund guys asked the lawyer if there was any recourse and if it might be worth it putting a claim in , they had no intentions it seems of recapturing any funds, but now that ponzi scheme was worded in. They got curious . I am sure they are not the only ones to think of this.

So what could happen if depositors with no withdrawals and no balance make a claim?

[LT22]

There won't be nearly enough money if that happens.

[northeastbeast2]

Another way depositors could win is by making a claim for all the rake they paid.

[LetsGambool]

Originally Posted by MyrnaFTW

Has anyone looked at this from a depositor angle yet?
So I am playing a sometimes "friendly "monthly PLO. In that game we start talking about the whole Pstars , FTP developments , etc. The conversation finds its way into the DOJ's wording of calling FTP a ponzi scheme . A hedge fund guy deposited 100k plus (learning plo) , another "near" there and a lawyer also stated 5 figures . the hedge fund guys asked the lawyer if there was any recourse and if it might be worth it putting a claim in , they had no intentions it seems of recapturing any funds, but now that ponzi scheme was worded in. They got curious . I am sure they are not the only ones to think of this.

So what could happen if depositors with no withdrawals and no balance make a claim?

If they are accepted as valid claims they get paid out. If here isn't enough money in the remission pot, payouts get pro rated.

[tamiller866]

Originally Posted by MyrnaFTW

Has anyone looked at this from a depositor angle yet?
So I am playing a sometimes "friendly "monthly PLO. In that game we start talking about the whole Pstars , FTP developments , etc. The conversation finds its way into the DOJ's wording of calling FTP a ponzi scheme . A hedge fund guy deposited 100k plus (learning plo) , another "near" there and a lawyer also stated 5 figures . the hedge fund guys asked the lawyer if there was any recourse and if it might be worth it putting a claim in , they had no intentions it seems of recapturing any funds, but now that ponzi scheme was worded in. They got curious . I am sure they are not the only ones to think of this.

So what could happen if depositors with no withdrawals and no balance make a claim?

What I believe is most likely to happen is that the claims administrator will review their accounts and inform them that their losses were to unlawful gambling and fees for providing that unlawful service (rake), neither of which are entitled to remission.

They may offer to provide them with a list of the players whom their hand history indicates they lost their money to if they wish to seek recovery of unlawful gambling winnings through the courts, but their petition for remission will likely be denied.

Interesting to me is what a court would rule if a losing online player were to pursue recovery of his losses from the player(s) he lost it to in the courts, the statute of limitations in many States would have passed, but courts could rule that awaiting remission from fraud caused the delay in filing.

In several states double, triple, even quadruple losses are recoverable, one example statute (Michigan):

(1) 750.315 Losing at gambling.

Losing at gambling—Any person who shall lose any sum of money, or any goods, article or thing of value, by playing or betting on cards, dice or by any other device in the nature of such playing or betting, and shall pay or deliver the same or any part thereof to the winner, and shall not, within 3 months after such loss, without covin or collusion, prosecute with effect for such money or goods, the winner to whom such money or goods shall have been so paid or delivered, shall be guilty of a misdemeanor, punishable by a fine not exceeding 3 times the value of such money or goods. Such loser may sue for and recover such money in an action for money had and received to the use of the plaintiff; and such goods, article or valuable thing in an action of replevin, or the value thereof in an action on the case.

http://www.gambling-law-us.com/Artic...s-recovery.htm

[Gzesh]

Originally Posted by MyrnaFTW

Has anyone looked at this from a depositor angle yet?
So I am playing a sometimes "friendly "monthly PLO. In that game we start talking about the whole Pstars , FTP developments , etc. The conversation finds its way into the DOJ's wording of calling FTP a ponzi scheme . A hedge fund guy deposited 100k plus (learning plo) , another "near" there and a lawyer also stated 5 figures . the hedge fund guys asked the lawyer if there was any recourse and if it might be worth it putting a claim in , they had no intentions it seems of recapturing any funds, but now that ponzi scheme was worded in. They got curious . I am sure they are not the only ones to think of this.

So what could happen if depositors with no withdrawals and no balance make a claim?

Why would they be entitled to anything ? They got what they bargained for, a chance to play (and lose) at poker.

If a player had no balance in his FTP account, what were his "losses" due to the alleged ponzi scheme ? If he lost all his deposits playing poker, then what did he lose as a victim of the alleged scheme ?

[ScreaminAsian]

the people with balances are the victims of the ponzi scheme. people with zero balance couldn't withdraw a dime even if full tilt was solvent as ****.

[MyrnaFTW]

Originally Posted by ScreaminAsian

the people with balances are the victims of the ponzi scheme. people with zero balance couldn't withdraw a dime even if full tilt was solvent as ****.

they dont consider themselves victims , the thing is DOJ is calling it a ponzi scheme , and if treated as that , it wont be dependent on the 4/15 balance.

look into other cases classified as Ponzi (ie madoff) , they returned to depositors
from people/entities who withdrew above their deposited amount.

[ScreaminAsian]

Originally Posted by MyrnaFTW

they dont consider themselves victims , the thing is DOJ is calling it a ponzi scheme , and if treated as that , it wont be dependent on the 4/15 balance.

look into other cases classified as Ponzi (ie madoff) , they returned to depositors
from people/entities who withdrew above their deposited amount.

FTP was an investment firm? I looked at it more like a stock exchange.

[Gzesh]

Originally Posted by MyrnaFTW

they dont consider themselves victims , the thing is DOJ is calling it a ponzi scheme , and if treated as that , it wont be dependent on the 4/15 balance.

look into other cases classified as Ponzi (ie madoff) , they returned to depositors
from people/entities who withdrew above their deposited amount.

So, are you advocating FOR a clawback from winning players to pay depositors who were not winning players, going back as far as the "start" of FTP ?

Think that is either fair or realistic or justified, given the fair value received in playing poker ?

[MyrnaFTW]

Originally Posted by Gzesh

So, are you advocating FOR a clawback from winning players to pay depositors who were not winning players, going back as far as the "start" of FTP ?

Think that is either fair or realistic or justified, given the fair value received in playing poker ?

I am not advocating anything, I just passed on another pov .
The easiest thing to have done is just let pstars return balances , but you know that is not how our govt works.

I dont think its fair or realistic , but this is the govt we are talking about here. They dont view it as "fair value" just for playing poker , they are viewing the whole enterprise that was FTP as a ponzi scheme. look at just about every press clipping from doj and you will find those words there.

http://www.justice.gov/usao/nys/pres...ndictment.html

[RollWave]

Originally Posted by MyrnaFTW

The easiest thing to have done is just let pstars return balances , but you know that is not how our govt works.

it worked that way last year when pokerstars paid everyone back.

[northeastbeast2]

I think the only thing that people with lost deposits could make a claim for would be the fees they paid in the games. The reason that is true is because outside of the rake that money is accounted for in the account balance of another player as a positive account balance. The players in Europe were paid directly. That means that the only balances that remain in the accounts are the sum of all the deposits of the players that lost plus the rake they paid.

So by paying out the account balances it could be said that even though there was no consideration before the account balances were paid out, that it did exist in a technical sense when the payments were made because that counter-balances the losses in the games by the players that thought they were gambling.

It wasn't necessarily against the law for Full Tilt not to have money backing the entire base of deposits in segregated accounts. Some element of leverage and predictability can exist in businesses of that nature. This concept is one of the fundamental things that banks use to expand the money supply and make more loans, for example.

The question of whether a player actually received the perceived value of their deposits can only be measured and proven at the point they try to retrieve them or when having lost them, others try to retrieve what they benefited.

In order to pay people with balances faster than people with no balances it has to be determined who had suffered the most harm from the fraud when it was discovered. Players with account balances suffered more than players with no account balances because the future expectation of compensation from the website was far higher than it was with someone who had lost their deposits and would only have a claim in a more narrow sets of circumstances like this one.

All players paid fees in the games that they almost certainly would not have paid if they had known what they were getting for those fees. Even though both the players with balances and the players without balances took losses in the games as the result of fees being collected in them, the settlement existing fundamentally alters what they have received for the fees.

Because a balance being paid out represents the sum of deposits made by others on Full Tilt Poker, paying out a balance counteracts and reduces the level of fraud that happened because the result matches as closely as possible to what would have happened if Full Tilt had met its obligations to pay out the balance.

The only losses left after balances have been paid would be the fees the players paid in the games. Both players with balances and players without them suffered a loss as the result of fees being collected by Full Tilt and then its subsequent failure to meet its obligation that justified the collection of them.

Because a player with an accumulated balance could be paid interest on his balance that would legally provide him with full restitution, a player without a balance should have priority in the refunds of fees in the games outside of a legally compensable interest rate payment to players that had a balance in which it was practical to calculate it.

Considering all these factors the priority and order of payments to customers of Full Tilt Poker should be as follows:

1. Players with balances with no interest calculated
2. If money remains a subsequent calculation and payment of interest owed to players with account balances
3. If money remains, a proportional payment of fees paid by players who had made deposits but had no calculable account balance to base interest payments

[permafrost]

Originally Posted by Skallagrim

You make some good points but some of your conclusions I question.

1) We can argue about the use of the words "and should" in the quote from Pappas. To keep it short I think it is nitpicking to not see Pappas' statement as his take on what the settlement means, not a reporting of what it actually said. Pappas" point is really that the DOJ choose not to influence the future - if some legal jurisdiction wants to license PokerStars to operate within that jurisdiction, that is not something the DOJ is going to stop.

Question about the above and what Pappas said below...

This sends an important message to Congress. The Justice Department could have very easily banned PokerStars and Full Tilt Poker from the United States forever. Yet it chose not to.

...if the DOJ had chosen to "very easily" ban those entities from the U.S., what would have been the legal basis and method?

[LetsGambool]

Couldnt they just have added as a condition of the negotiated settlement that Poker Stars or its related entities would not apply for licensing or partner with licensees in any US jurisdiction?