Ferguson Forfeits Additional $2.5mm to Settle with Feds

Contribution to player repayment pool allows for future work in legal gaming

by , Feb 25, 2013 | 1:00 pm

Chris Ferguson bannerFormer World Series of Poker champion Chris Ferguson, whose career has been derailed for almost three years following the U.S. government’s crackdown on Internet poker, has settled with federal prosecutors.

According to court documents, Ferguson agreed to forfeit millions of dollars he earned as a founder and principal in Full Tilt Poker, one of three online gambling businesses whose access to American customers was cut off in April 2011 following a slew of criminal indictments.

The eight-page settlement was signed by Ferguson and his attorneys and federal prosecutors on Tuesday. U.S. District Judge Kimba Wood of New York City approved the agreement Thursday.

The case stems from a civil lawsuit filed by the U.S. Justice Department in September 2011, which alleged Ferguson, fellow poker player Howard Lederer and other Full Tilt owners defrauded online customers out of $443.8 million.

Government prosecutors labeled Full Tilt Poker nothing more than a giant Ponzi scheme. The website’s owners and operators were accused of diverting funds from gamblers into their own pockets.

Under terms of the settlement, Ferguson agreed to forfeit to the government a bank account with an undisclosed amount, as well as forfeiting any remaining interest in money Full Tilt owed him. Ferguson also agreed to forfeit an additional $2.35 million within 30 days.

Ferguson, known as “Jesus” in the poker community because of his long black hair and beard, did not admit any wrongdoing and agreed not to work for any unlicensed online gaming site in the U.S.

In the settlement, Ferguson said he “was unaware of any wrongful activity at Full Tilt or that the company had become unable to satisfy its player account liabilities”

Just before the April 2011 crackdown, Ferguson said he “forgave approximately $14 million in dividends owed to him by Full Tilt” with the “expectation” that the money would be used to pay players.

Lederer agreed to similar settlement terms in December, agreeing to pay a civil money-laundering penalty of $1.25 million and $168,000 that will be liquidated from various bank accounts. He also gave up two Las Vegas land parcels, a 1965 Shelby Cobra, and two bank accounts of unknown value.

Ferguson, 49, won the World Series of Poker’s Main Event in 2000 and owns five individual event championship bracelets. His career tournament earnings of more than $7.7 million include $5.4 million from the World Series of Poker. He was one of the circuit’s more popular professional players, but he has been absent from poker rooms and tournaments since 2011.

Ferguson, who has a doctorate in computer science from the University of California, Los Angeles, helped develop Full Tilt’s software. He and Lederer were key figures in Full Tilt’s launch. Both enticed professional poker players to become Full Tilt-sponsored players.

Lederer and Ferguson were not charged criminally. Prosecutors, however, alleged Ferguson was allocated more than $85 million from Full Tilt, although he collected just $42 million.

In July, the actions against Full Tilt as a company were 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. Ferguson’s surrendered money will be added to the player repayment pool.

Contact reporter Howard Stutz at hstutz@reviewjournal.com or 702-477-3871. Follow @howardstutz on Twitter.
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