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Tag: Ponzi schemes

  • Ponzi Schemer Allen Stanford Blames Twitter For Conviction

    Earlier this month, Allen Stanford was convicted on 13 out of 14 counts relating to a giant Ponzi scheme that he’d been running for the past two decades. As chairman of the Stanford Financial Group, Stanford reportedly committed $7 billion dollars worth of fraud, a staggering figure that really only compares to that other famous Ponzi schemer.

    Now he wants a new trial. And one of his major points of contention centers around social media use by the jury of his peers.

    According to Stanford’s lawyer, Ali Fazel, one of the problems they had with the original trial was that is devolved into a “media circus.” And we know what that means – that a jury would be unable to enter the courtroom each day with an unbiased mind.

    The main problem? Twitter. The motion claims that the judge in the trial allowed reporters to tweet freely from inside the courtroom, even at times when things were going on without the jury present. The motion then claims that the judge failed to tell the jurors to keep off Twitter. Fazel then points out the passivity with which Twitter users can retain information using the service:

    “This broadcasting is likely to have reached a juror, since Twitter does not require active pursuit of information, but rather, if a friend of the juror’s was following the ‘Stanford trial,’ the tweets might automatically show up on a juror’s Twitter account.”

    True, a juror would not have to be actively searching for tweets about the Stanford trial or even following any of the reporters or news organizations reporting on it. A friend’s comment about what they heard or even a retweet would apear in their tweet stream.

    The real question in all of this is how to judges control their juries when it comes to social media. Of course, jurors aren’t going to to be tweeting and reading tweets during the prosecution’s opening statements or anything, but what about when they leave the courtroom? Can someone on jury duty realistically be expected to abstain from Twitter and Facebook for the entire duration of the trial – it could be weeks or months.

    And it’s not like the problem is new. Judges have had to worry about how jurors communicate with the press, and others outside of the courtroom since there was such a thing as a trial. But social media just makes it so much easier for a juror to become involved in questionable communications. You can only get so many phone calls or face-to-face interactions. With Twitter, millions and million of opinions are shot to your smartphone in seconds.

    There’s definitely a precedent for this type of claim from Stanford and his lawyer. Back in December 2011, an Arkansas man’s death row conviction was thrown out because of the Twitter use of a juror. A new trial has been put on the docket for Erickson Dimas-Martinez, because Juror #2 in the trial was tweeting during the trial, after the judge specifically instructed against it.

    What do you think? How serious a problem are tweeting jurors? Let us know what you think in the comments.

  • Full Tilt Poker: A Massive Ponzi Scheme Says U.S. Attorney

    U.S. Attorney in Manhattan Preet Bharara didn’t mince words yesterday when he called out former online poker giant Full Tilt Poker.

    In a statement, Bharara said that “Full Tilt was not a legitimate poker company, but a global Ponzi scheme. Full Tilt insiders lined their own pockets with funds picked from the pockets of their most loyal customers while blithely lying to both players and the public alike about the safety and security of the money deposited.”

    Federal prosecutors are now charging the major players with a new civil money laundering complaint that alleges Full Tilt Poker used online poker players’ money to pay its board of directors. That would include famous poker stars Howard Lederer and “Jesus” Ferguson. The alleged fraudulent payoff is claimed to be $440 million over the last 4 years.

    Here’s how the poker world is responding on Twitter –

    Times like these make me wanna express how proud and thankful I am to be with the world’s largest poker site, @PokerStars. 19 hours ago via TweetDeck · powered by @socialditto

    RT @mitchthebitch77: @ToddBrunson you were not in on the ponzi scheme were you??? Hell no 13 hours ago via Echofon · powered by @socialditto

    Bad day for poker FTP Tilt boys and Howardhlederer 6 hours ago via txt · powered by @socialditto

    Poker star Daniel Negreanu commented on the situation indirectly, responded to a tweet from a fan that read “Wonder if I have better odds of getting a RT from @RealKidPoker or seeing my money from Full Tilt? #LOL” with this –

    @PunisherOnTilt this should answer your question… 2 hours ago via Twitter for iPad · powered by @socialditto

    Just a week after the initial Black Friday events that shut down on Full Tilt, Absolute, and PokerStars, the DOJ reached domain agreements that allowed the sites to begin using them again to process payments to players.

    The first to slowly begin to process payouts was PokerStars, who began payments near the end of April.

    From the get-go, Full Tilt Poker players have complained about how the company handled the whole situation. It wasn’t until nearly a month after Black Friday that they contacted users about cashouts. In June, Phil Ivey famously announced that suing Full Tilt and boycotting the World Series of Poker on behalf of all the players who had yet to receive their money.

    At the end of August, Full Tilt released a statement about its inability to pay back its players, blaming the U.S. government’s original indictment and cash seizures for the hold-up. They also claimed a “massive theft perpetrated by one of its payment processors.”

    And now, this new Ponzi scheme accusation hits. Federal prosecutors have amended the original complaints to include Lederer, Ferguson, and CEO Ray Bitar. Apparently, Full Tilt payed off its board members with player funds while keeping miniscule amounts of funds in the bank. From Forbes –

    Federal prosecutors claim that Full Tilt’s board members got rich because the company used player funds to pay them massive amounts of money that largely was transferred to their accounts in Switzerland and other overseas locations. Specifically, the feds allege that Bitar pocketed $41 million and Lederer got $42 million. Jesus Ferguson allegedly was allocated $87 million in distributions and received at least $25 million, federal prosecutors claim. Another owner, described by the feds as a professional poker player, received at least $40 million in distributions, as well as millions of dollars more characterized as loans from Full Tilt that have only been partially repaid. The government claims Full Tilt continued to make payments to its owners of up to $10 million per month even after the company was insolvent.

    The indictment alleges that soon after April’s original crackdown, Lederer told others at Full Tilt that the company only had $6 million.

    Sadly, with legislation ramping up for the legalization of online poker, all this news does is hurt the game.

  • Tobey Maguire, Poker Star, Sued Over Illegal Game

    Tobey Maguire, Poker Star, Sued Over Illegal Game

    It seems as though there may be two morals to this story: First, when you play for high stakes, make sure you know where your play-partners got their “stakes.” And secondly, just don’t play poker with Tobey Maguire – he’s a shark.

    According to RadarOnline, Maguire is just one of many Hollywood elite being sued in connection with a extremely high-stakes underground poker ring.

    According to the court filings, the games were part of what they call “clandestine Texas Hold’em poker games” that were held at swanky locales like the Four Seasons in L.A., the Beverly Hills Hotel and occasionally at the private residences of the players. The lawsuit also says that they used “professional-type” poker tables and hired dealers.” I would sure hope so, as a high-stakes game on a foldout table with two decks you have to shuffle yourself seems like it would suck.

    Private poker games for money are technically illegal in California, but it is rarely a prosecuted offense. Nobody involved is under criminal investigation as a result of the games.

    Glad to hear Damon, Affleck & Dicaprio poker ring proceeds going to economic justice & environmental causes, in addition to taxable profits. 3 hours ago via Mobile Web · powered by @socialditto

    Tobey Maguire won a million a month on underground poker. Games made Teddy KGB’s place look like daycare. http://bit.ly/jhLhZE 1 hour ago via Visibli · powered by @socialditto

    They are killing off Spiderman…he must have been spooked 😉 “@GRLitman: Poker, a ponzi scheme, and Tobey Maguire. http://t.co/C0CCtMC 49 minutes ago via Twitter for Android · powered by @socialditto

    So at the heart of the civil suit against Maguire is one of the game’s players, Ruderman Capital CEO Brad Ruderman. Ruderman was recently convicted on counts of both wire fraud and investment adviser fraud for organizing a Ponzi scheme that swindled millions out of his investors. Apparently, the FBI investigation into Ruderman found that he lost over $25 million of investor funds during these poker games. So not only is he a fraud, but he apparently sucks at cards. Swell.

    The lawsuit alleges that Tobey Maguire received just over $300,000 of investor money as winnings from Ruderman. It’s unclear whether Maguire or any of the other players knew anything about Ruderman’s finances.

    From the lawsuit

    The trustee is informed and believes that the Defendant (Maguire) did not have any contractual or other relationship with the Debtor, that the Defendant was not a member of, investor in, or creditor of, the Debtor, and that the Defendant improperly received funds of the Debtor. The trustee is further informed and believes that the Defendant received funds from the Debtor as payments for the personal gambling debts of Ruderman. The payment of the personal gambling debts of Ruderman was not an authorized or legal use of the fund of the Debtor, and was paid from funds of investors in, and members of, the Debtor.

    Now the investors who lost their money want some of it back. And they are going after Maguire.

    Here’s the other big news from all this – Maguire wasn’t the only A-lister involved in these games that had “armed guards in bulletproof vests” manning the doors. Matt Damon, Ben Affleck and Leonardo DiCaprio also played in the $100,000 buy-in hold’em games.

    Forget all the civil suit stuff, I’m sure you want to know how the various stars played poker. Were they any good?

    Apparently Tobey Maguire is excellent. According to Radar’s sources, he won around $1 million a month for a period of a couple years. Players were also impressed with Ben Affleck’s poker talent. But Damon and DiCaprio? Not so much. Apparently DiCaprio was a tightwad as well. Never would’ve guessed that.

    It’s good to know that controversy can still come to good ol’ fashioned bricks and mortar poker games, not just all the online poker. $100,000 buy in? Try that on Full Tilt.

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