Quote:
Originally Posted by sixfour
[ ] op knows what a ponzi scheme is
I know exactly what a Ponzi scheme is. It's the closest definition of fraud that I could think of in this situation. It wasn't embezzlement. I realize there's no fake ROI being told to investors, but people are playing in tournaments expecting to be paid in Travel Funds/Buy-ins to Aruba and getting nothing in the end.
It's similar because I think they've been sustaining this by growing each year. Each year they take these $5k packages from running satellites or events at each property and get paid by the casinos for the in good faith that they will then correctly escrow the funds and use it for the prize pool in Aruba later in the year.
They must have been using that money as operating expense, fun, blow, hookers, whatever (I have no evidence of any of that just conjecture), but making it back by running more stops. Enough so that they could pay out the prize pools in the past events.
So tournament number 1 they don't do this. #2 they do, and recoup some of what they spent from loans or waiting a few weeks to send out the prize pool and run another event and get a few more 5k packages. #3 this happens again but on a much larger scale, this is the year they looked for and found investors (I have friends that I know they approached looking for funding, I don't know the details however). So with investors money they could pay that year out (and if they did find investors and do this I believe that could be specifically ponzi as well).
#4 (this year) could be the year that everything catches up and there's no further ability to beat around the bush. I believe this is likely the case.