Agreement to forfeit > $1.5 million over 3 years could be his biggest win
Poker superstar Howard Lederer, facing a $42.5 million civil lawsuit filed by the U.S. Department of Justice over his leadership role with a tarnished online gambling company, agreed Tuesday to settle the case, forfeiting more than $2.5 million in cash and assets.
In a stipulated settlement filed at the U.S. District Court in New York City, Lederer, once one of the most revered players on the poker circuit, did not admit to any wrong-doing in the case that stemmed from the April 2011 crackdown by federal prosecutors on illegal Internet poker operations.
However, Lederer, 49, who was nicknamed “The Professor,” by the poker world, agreed to a two-part money settlement with the government, which includes a civil money-laundering penalty of $1.25 million and $168,000 that will be liquidated from various bank accounts.
Lederer agreed to pay the penalty in two installments, due 18 months and 36 months from now. The penalties are secured by Lederer’s two Las Vegas homes in the ultra-exclusive The Ridges area of Summerlin.
In addition, Lederer agreed to turn over two bank accounts of unknown value, a 1965 Shelby Cobra roadster, two Las Vegas properties with a combined value of approximately $975,000 and an additional $30,000 traceable to the sale of a third Las Vegas property.
Lederer, who was a founder and director of the Full Tilt Poker website, agreed to no longer work for any Internet gaming website in the U.S. or collect any money from an online gambling site until the activity is legalized on a federal level.
Government prosecutors in New York originally filed a civil lawsuit against Lederer, a Las Vegas resident, in September 2011, seeking some $42.5 million for allegedly defrauding customers of Full Tilt. The website was shut down in 2011.
In the civil case, Full Tilt was described by prosecutors as nothing more than a giant Ponzi scheme. The website’s owners and operators are accused of diverting funds from gamblers into their own pockets.
In July, the criminal case against Full Tilt as a company was largely resolved and the website was taken over by rival Poker Stars, which agreed to pay a $731 million settlement to the government to resolve its own legal issues.
Out of the settlement, $150 million will be used to refund money owed to American-based Full Tilt customers.
In September, justice department prosecutors amended their complaint against Lederer, seeking to seize seven homes, including six in Las Vegas, alleging the assets were purchased with some of the $44.3 million he received over a four-year period “that was directly tied to the criminal conduct” from Full Tilt.
Prosecutors said the payouts to Lederer, a Full Tilt owner, were just a portion of the $443.8 million he and others allegedly stole from the website’s customers.
As part of the settlement, Lederer claimed Full Tilt was a legitimate business operating within the bounds of the law and that he had no knowledge of any impropriety at the company, including a shortfall in the company’s ability to cover player account balances, until after the April 2011 indictments.
Lederer has never been charged criminally. Nor has fellow poker player Chris “Jesus” Ferguson, who prosecutors said was allocated more than $85 million from Full Tilt, although he collected just $42 million.
Lederer and Ferguson, who won the 2000 World Series of Poker Main Event, helped found the website, which became one of the world’s top Internet gambling locations.
Lederer and Ferguson were among the four Full Tilt insiders personally named in the civil case. Fellow director Rafe Furst settled his case with the government in November, forfeiting a trust account and agreeing to pay a $150,000 penalty.
The case against Ferguson is still pending.
Former Full Tilt Chief Executive Officer Raymond Bitar, however, is facing life in prison after surrendering to authorities in July. He was indicted in April 2011 and is currently on house arrest in southern California.
Lederer has won more than $5.7 million in tournament poker in his career, including $1.6 million at the World Series of Poker, where he earned two individual event championship bracelets.
Since April 2011 Lederer laid low. He hasn’t shown up at the World Series of Poker in two years.
In September, he granted a lengthy videotaped interview to PokerNews.com, which aired the story over seven parts on its website.
Recently, Lederer has been seen playing high-stakes cash poker games at the Bellagio.
Lederer and Ferguson were key figures in Full Tilt’s launch. Ferguson, who has a doctorate in computer science, developed Full Tilt’s software. Both enticed professional poker players to become Full Tilt-sponsored players.
Contact reporter Howard Stutz at email@example.com or 702-477-3871. Follow @howardstutz on Twitter.
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