Ray Bitar: Full Tilt Poker Ponzi Scandal and Happily Ever After?
Ray Bitar was one of the founders and the chief executive officer (CEO) of Full Tilt Poker. He was indicted in 2011 on numerous charges in connection with a nearly $400 million Ponzi scheme the site was accused of running. Yet Bitar managed to escape serious punishment.
At the heart of the scandal were allegations that deposits and winnings were used to pay Full Tilt’s board members and owners.
Full Tilt Poker’s birth
Ray Bitar founded and ran software company Tiltware which became the parent company of Full Tilt. Bitar’s pre-poker career began at age 16 when he started trading equities on the Pacific Stock Exchange. Given his interest in poker since age 12, it seemed almost natural that Bitar would journey down the path that led to the Full Tilt Poker’s development.
Before founding Full Tilt, Ray Bitar was no stranger to the poker tables. In his few California State Poker Championship tournaments, he managed to win $6,195. Of course, this pales in comparison to the millions he illicitly made through Full Tilt.
While running his trading company, Bitar met—and traded for—Chris Ferguson, and this relationship—along with input from Howard Lederer and other poker pros—gave rise to Team Full Tilt and led to the site’s inception. Ultimately, Full Tilt became one of the best real money poker sites in the world.
What happened to Full Tilt Poker?
Just say the words “Black Friday” to any poker player and you will likely hear a collective gasp and curses of Ray Bitar. April 15, 2011 is a day that will live in infamy—and for far more than simply being “Tax Day.”
On that fateful day, a sealed indictment was unsealed. The Department of Justice seized the Internet addresses of three online gambling sites. This indictment included five URLs: FullTiltPoker.com, AbsolutePoker.com, PokerStars.com, UltimateBet.com and UB.com. At the heart of the case, United States v. Scheinberg, was the Unlawful Internet Gambling Enforcement Act (UIGEA) of 2006. This act made it a federal offense for a gambling enterprise to “knowingly accept [payments] in connection with the participation of another person in unlawful Internet gambling.” Whereas some sites—like PartyPoker—withdrew their business from the U.S., others, like Full Tilt, did not.
Ray Bitar faces prison
In April 2011, Ray Bitar found himself charged with five counts of bank fraud, money laundering, and other online gambling offenses. He faced a maximum prison sentence of 65 years. In addition to the Full Tilt Poker shutdown, the site had its assets frozen. Other managing officers including Lederer and Ferguson faced lawsuits due to allegations of illegal conduct.
Further investigation led U.S. authorities to claim that Bitar and his co-conspirators had been running a Ponzi scheme.
Compounding the problem was the fact that Ray Bitar had a serious heart condition. He was on the transplant list in California. Bitar eventually took a plea bargain in 2013, pleading guilty to conspiracy to commit bank and wire fraud in violation of the UIGEA. He also agreed to forfeit $40 million from 18 bank accounts and surrender:
- ownership in several homes and commercial properties in California, Indiana, and Bermuda
- ownership and/or equity interest in 23 separate businesses connected to Full Tilt
- nine other business entities not connected to Full Tilt.
In exchange, Ray Bitar was able to stay out of prison. According to U.S. District Judge Loretta A. Preska, a prison term would be “tantamount to a death sentence.”
Happily ever after?
As would be expected, rumors circulated that Bitar was faking his heart condition to get out of prison. In Bitar’s defense, poker pro Allen Cunningham stated that according to his sources, Bitar was not faking and was unlikely to live more than a couple of years. Compounding the problem was that Bitar was allegedly nearly penniless after the plea bargain.
Nobody really knows whether Ray Bitar received a new heart, but he tied the knot in October 2015 to Jackie Lucas in a truly lavish wedding, looking quite happy and healthy.
As of 2014, U.S. players had received only approximately $76 million of the nearly $547 million owed to them following a settlement agreement with Full Tilt and PokerStars.
But Ray Bitar appears to be living happily ever after.
What are your thoughts on how justice was, or wasn’t, served in the Ray Bitar Full Tilt Poker scandal?
Until next time.
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