Two-time WSOP bracelet winner, two-time WPT champion, author and entrepreneur Howard Lederer has been vilified by the poker community. But why?
The short answer is that both Howard Lederer and Chris Ferguson were managing officers and the public faces of the once-popular online card room Full Tilt Poker. In September of 2011, Full Tilt was sued in federal court over allegations that it was a Ponzi scheme. Prosecutors alleged that both Lederer and Ferguson collected more than $40,000,000 each over a four-year period from unscrupulous and illegal conduct by Full Tilt.
The end result for both Lederer and Ferguson was a nearly six-year hiatus from professional poker. For Lederer’s part, despite issuing an apology for his role in the scandal his personal and professional reputation has continued to suffer.
What happened to Full Tilt Poker?
Given reputations of respect, success, and professionalism, both Howard Lederer and Chris Ferguson’s endorsements of Full Tilt were significant for legitimizing the site, and as a result Full Tilt quickly became one of the most popular online poker sites in the United States.
Other pros–such as Mike Matusow, Ted Forrest and Jennifer Harman–were involved with Full Tilt as well, but not nearly as much as Lederer and Ferguson.
Full Tilt Poker Black Friday
In 2011, the FBI shut down the two largest online poker sites operating in the United States, Full Tilt and PokerStars, on grounds that both sites’ systems for receiving and distributing deposits violated federal law. In short, Full Tilt was accused of co-mingling player funds with the company’s operating funds, which are used to pay company expenses, owners’ salaries and profit distributions. Additionally, when players cashed out their winnings, they were paid with new player deposits, but necessarily so. In other words, Full Tilt was clandestinely insolvent.
Lederer et al. were subsequently charged with civil forfeiture claims for illegal gambling of business proceeds, conspiracy to commit wire and bank fraud, conspiracy to commit money laundering, defrauding Full Tilt players out of more than $330,000,000 (while owners earned over $450,000,000), lying to the FTP, misrepresenting that players’ funds were safe and secure, and violating the Travel Act.
Lederer, who received over $42,500,000 from Full Tilt’s operations, struck a sweetheart deal to give up just $2,500,000 in assets in exchange for a slap on the wrist. Meanwhile, Full Tilt’s customers were left in limbo, unable to get any of their money back.
In 2012, PokerStars acquired Full Tilt Poker and subsequently arranged to pay out all American Full Tilt players. PokerStars is now the top online poker site in the world—except in the US.
Reasons for hating Howard Lederer
Many players who lost money as a result of the Full Tilt scandal have not forgiven Howard Lederer for his role in the fiasco. Their anger was exacerbated when Lederer gave an unsatisfying 2 hour interview to PokerNews. This condensed version of the interview sums it up well:
Howard issued a public statement through Daniel Negreanu’s blog apologizing for his mismanagement of the company on May 19th, 2016. The statement gets off to a good start in the first paragraph, which reads:
I am writing to apologize to everyone in the poker community, especially to all the players who had money on Full Tilt Poker on April 15, 2011. When Full Tilt Poker closed in 2011, there was a shortfall in funds, a distressed sale to recover those funds, and a long delay in repaying players. Throughout this period, there was little explanation for the delay, and no apology. Players felt lied to. They trusted the site, and they trusted me, and I didn’t live up to that trust.
Soon after, however, Lederer starts deflecting at least some of the blame:
Even though I was no longer overseeing day to day operations, my inattention in the two years leading up to Black Friday imperiled players’ deposits. My involvement in Full Tilt from 2003-2008 put me in a unique position of trust, a trust that I disappointed by failing to ensure that Full Tilt was properly governed when I stepped away in 2008. My failure to make sure proper oversight was in place when I left resulted in the situation that began to unfold on Black Friday.
Howard Lederer’s statement has been criticized for deflecting blame (except for the last two lines), and for being issued five years after Full Tilt’s collapse. Criticism of Lederer’s lack of observable remorse is also common. Understandably, disappointment and shame are common themes expressed by Lederer’s peers in the professional poker community.
If there’s anything for Lederer to feel good about, it’s that Ferguson’s return to the poker world has been even more futile. Ferguson has himself refrained from making a public apology for his involvement with Full Tilt.
Trying to fit back in: Chris Ferguson and Howard Lederer 2017 WSOP
Both Howard Lederer and Chris Ferguson returned for the 47th WSOP in 2016 to mixed reactions; however, WSOP officials reported that no serious incidents involving either player occurred during the series. Ferguson went on to win the 2017 WSOP Player of the Year, much to the chagrin of most players in the the poker community.
Yet there continues to be an air of disgust surrounding both players, particularly on social media. One criticism is that they have jumped right back in to playing high buy-in tournaments–tournaments that pros who lost significant amounts of money because of Full Tilt cannot afford to play.
What are your thoughts on the Full Tilt scandal and the vilification of Howard Lederer?
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