I am pretty sure that Obama knew it was a big mistake this summer and he ordered them to settle the lawsuits before the election.

The DOJ used that law because it had always been the position of the DOJ (and, numerous online sites, btw) that online poker sites were violating the law.

- The DOJ settled with Party Poker for hundreds of millions of dollars just after the UIGEA was passed and several other companies left the market because their lawyers told them too.

- The DOJ had seized money from FTP specifically as early as 2007 and also went after some of the processors.

Also, when you remember that (1) the banks and credit card companies were able to delay enforcement of some of the provisions of the UIGEA until several years after the law was passed because they claimed that they were not yet capable of implementing the law, (2) that Daniel Tzvetkoff (a key witness) wasn't arrested and turned until several years after the UIGEA was passed and (3) that complex multinational cases take time to develop, and it's pretty clear that the DOJ didn't just suddenly flip it's position on online poker and decide to go after FTP because Obama had some sort of axe to grind against online poker...

Wasn't the UIGEA snuck in under some port security act?

now you're talking about serious business.. an IPO or similar. And I do believe from what I've seen that FTP's (inept) management would be frightened to death of the prospect of going public.. cause then you gotta play with the big dogs.

I certainly did not mean to suggest that they flipped their position, but as they say, "they buck stops here" and the President is ultimately responsible for decisions made by DOJ. Even if Obama did not have an axe to grind, he apparently agreed Poker Stars and FTP should be shut down in the US, despite the fact that many in Congress are now trying to make it legal. Seems like they could have worked out some kind of smoother transition than what ended up happening. At least the lawyers will get rich. And of course, those lawyers in DOJ have some more notches on their belts.

Sorry, you don't just get to handwaive the earlier seizures away by saying, well, seizures are seizures...
If, on Black Friday, Full Tilt had 400 million on hand and owed 400 million to customers and the shortfall only developed because of the Black Friday seizures, then, sure, you can blame the shortfall on the DOJ... But, when the DOJ had been seizing money for 4 years, and the company continued to pay out dividends as usual and made no real attempt to take care of the shortfall, that's on the company...

Oh, and even without any of the seizures, FTP would have had a massive shortfall because of the phantom deposit issue which FTP knew about and allowed to continue.

And I'm not sure where you come from, but if a business promises to hold your money in a segregated account and then doesn't do that, it's not just a little white lie, it's fraud... For example, I'm a lawyer. If a client gives me funds to hold on their behalf, I tell that client that I am placing those funds in a special trust account. If I don't do that and instead deposit the money in my operating account, I have committed fraud and theft upon my client and I can get disbarred and/or go to jail. And that is true even if I have enough cash in the operating account to pay the client back. I've committed a crime simply by failing to segregate the money after telling the client that I would do so... That's what FTP did. They told players one thing and did another and that's not ok.

They could have floated some stock to a private equity firm without going public. I heard estimates that FTP was valued at more than $1 billion, so they could have easily raised $100 million to cover a shortfall (although I have not seen a firm number on the pre-BF shortfall).

And that's why there were two separate complaints against FTP... The first complaint basically alleged the same things that were alleged against PokerStars. The second, amended complaint, which came after Black Friday, was when the allegations of fraud wrt the failure to keep enough money on hand to payback all players came after the DOJ had a chance to learn more about the innerworkings at FTP and see that the shortfall existed... And Stars wasn't subject to those later claims because they kept segregated funds...

Sounds like DOJ has been running a protection racket the last 4 years and skimming money from the Internet poker sites under the guise of enforcing UIGEA.

OK, who at FTP was indicted on the charges relating to fraud wrt the failure to keep enough money on hand to payback all players? That goes back to the question I asked a long time ago.

So if the DOJ believes that a crime is being committed (a violation of the UIGEA and other gambling laws, money laundering, etc), they shouldn't enforce the law because Congress has talked about possibly making it legal?

Congress hadn't and still has not repealed the UIGEA, and many of the proposed bills contained language stating that companies that had operated illegally after 2006 were not going to be allowed to enter into the market (at least without a significant blackout period), so I don't see any reason why Obama or anyone at the DOJ should have delayed a legitimate prosecution simply because Congress is talking about maybe possibly changing the law...

The second amended complaint was a civil complaint that named Bitar, Lederer, Ferguson and Rafe Furst

Since there apparently was, and still is, disagreement as to whether UIGEA applies to online poker, then yes, the Obama administration should have given Congress adequate time to decide if they want to explicitly exempt it from UIGEA.

Obama administration chooses not enforce many illegal immigration laws that are on the books, but that they don't agree with. There are many other examples.

Or, the DOJ, under both Republican and Democratic administrations, was enforcing the law and it just so happens, as with most laws pertaining to companies, that the penalties were enforced through civil forfeiture actions.

Tomato, tomato, I guess...

OK, from what I read Lederer settled that civil complaint with DOJ without having to admit any wrong-doing. If DOJ really had a criminal fraud case against him, I am sure they would have tried to send him to jail.

Politicians rarely have an axe to grind (and take action)... unless it coincidentally fits in with getting something they want. I don't see how attacking online poker would ultimately please any of Obama's constituents or his political colleagues.
I'm gonna chalk it up to the eagerness of the DOJ to appear tough on crime, be the crime real or imagined, and to a lack of supervision by its masters.

Maybe a better solution for the Obama administration would be for the online poker sites to collect two rakes, one for the Internet poker site, and one for the DOJ.

Look, it's obvious that you don't like Obama, but I just don't understand how you can get mad at the government for enforcing a law and seemingly not care about the people who broke it...

FTP paid out dividends when it's didn't have enough money to do so. FTP credited players for deposits that it was unable to collect. FTP provided false financial reports to their regulators. FTP told players that funds were safe and secure even when they weren't.

There is a reason why Stars was able to survive Black Friday and FTP had to get bailed out. And it's not because Obama and the DOJ were harder on Full Tilt. It's because Stars was a well managed company and Tilt was negligently if not criminally mismanaged.

I agree that Obama administration finally figured out that it was a public relations disaster. But the damage was largely already done.

It is no coincidence IMO that Obama's DOJ did this sort of thing to online poker, and also spent a lot of time trying put Barry Bonds, Roger Clemens, and Lance Armstrong in jail, and spent tens of millions prosecuting them. Meanwhile, none of the Wall Street criminals were charged with anything.

mighta cut a deal.. he might have.. well, I'll leave it to people's imagination, since it's pure speculation and only stirs the pot.

Has nothing to do with whether I like Obama or not. DOJ did not have to destroy FTP and could have setup things so that both FTP and Stars were able to quickly pay back the US players.

Yes there was mismanagement at FTP. Clearly there was. But there was mismanagement on Wall Street in 2008 and the US government got them all together and set up mergers between those who were insolvent, so there was no interruption in service and no depositors lost money. I suspect that the amount of the FTP shortfall (apparently caused by some who defrauded FTP with phantom deposits) was relatively small compared to total net worth of FTP.

hehe.. well.. on the one hand you're trying to keep the economy afloat by bailing out key components, hoping against hope they survive, and on the other you gotta put all their executives in the clink.
Tough decision..

Roger, this is all still under the assumption that Interet Poker falls under the classification of "unlawful internet gambling", which it does not.

Well, FTP has to be viewed somewhat differently than someone's attorney.

Did FTP, by way of it's license agreements, have a fiduciary responsibility to its players? Or is that less than clear? I really don't know..

Here's the thing.. If FTP at any time ran one penny short of adequate working capital, it would automatically be in violation of its license agreements. And, they would immediately go out of business and stop all business activity.
It just doesn't seem like that would be the intention of the AGCC. Businesses expand, make errors, have slowdowns, etc, and they must have been allowed some small measure of leeway.

How exactly was FTP going to pay players back quickly when it did not have the cash on hand to pay back players? It had somewhere around 50 million on hand on Black Friday and owed somewhere in the ballpark of 400 million. It was not publicly traded, some key execs were facing criminal and or civil charges, and, as you yourself pointed out, the AGCC wasn't exactly forcing it to keep a tight eye on its books, so any private investor is going to want to scrutinize the books quite thoroughly before investing, so who exactly was going to rush in and save the day to enable Tilt to pay out quickly?

- GBT came along months later with an offer that would have been insufficient to pay back all players immediately

- The rumored white knight brought in by Phil Ivey fell through

- Owners were reluctant to put their own money back into the company

- Stars was busy worrying about its own charges, and Howard has stated that there was quite a bit of reluctance to deal with Stars because Tilt didn't want to give up too much proprietary info that Stars could ultimately use against Tilt if the deal fell through

Noone was rushing in to bail Full Tilt out... Stars ultimately did do it because it made sense for Stars and because the DOJ allowed Stars to purchase the assets as part of a larger settlement agreement, but there was no quick and easy solution that would have allowed Tilt to keep running as an independent concern AND get all of the players paid back quickly.