Bitar pleads not guilty in US court

Full Tilt Poker chief executive Ray Bitar has pleaded not guilty to all charges against him after surrendering to US authorities in New York.

According to poker news site Diamond Flush Poker, the 40-year-old was told by magistrate judge Debra Freeman that he would be entitled to bail, but that US$2.4m, including $1m in cash, would need to be posted rather than the previous figure of $250,000. Until that point he has been remanded in custody with a pre-trial conference scheduled for next Monday.

It remains uncertain whether Judge Lewis Kaplan, who presided over the sentencing of Bitar’s fellow Black Friday indictee John Campos last month, will sit on the bench when Bitar stands trial. This is because Kaplan used to work at the same firm ““ Paul, Weiss, Rifkind, Wharton & Garrison LLP ““ which is representing the 40 year-old CEO.

Bitar’s lawyer Jack Baughman said in a statement ““ prepared before the unsealing of a new superseding indictment against Bitar and Full Tilt head of payments Nelson Burtnick ““ that “Through the company, Mr Bitar has been working to get Full Tilt’s players repaid. Arranging for those repayments has been, and remains his top priority”.

Baughman, described on his firm’s website as having represented “several European online gaming companies and their executives with respect to U.S. legal issues,” also confirmed that “As has been widely reported, when Full Tilt’s operations were shut down last year, it was not able to refund money it was holding in players accounts.”

Bitar’s lawyer also stated that Bitar still holds the position of CEO, confirming to Diamond Flush Poker that his and Bitar’s statements remained valid after the new charges were brought. In a separate statement Bitar said: “I know that a lot of people are very angry at me. I understand why. Full Tilt should never have gotten into a position where it could not repay player funds.”

Manhattan US Attorney Preet Bharara said in a statement last night: “With today’s arrest and the new charges brought against him, Raymond Bitar will now be held criminally responsible for the alleged fraud he perpetrated on his U.S. customers that cost them hundreds of millions of dollars. The indictment alleges how Bitar bluffed his player-customers and fixed the game against them as part of an international Ponzi scheme that left players empty-handed.”

Janice K. Fedarcyk, FBI Assistant director-in-charge added: “Bitar and Full Tilt Poker persisted in soliciting US gamblers long after such conduct was outlawed. As alleged, Bitar has already been charged with defrauding banks to conceal the illegal gambling. Now he stands accused of defrauding Full Tilt’s customers by concealing its cash-poor condition and paying off early creditors with deposits from later customers. The online casino become an internet Ponzi scheme.”

eGaming Review understands that Bitar agreed to return to the United States despite failing to receive requested reassurances that no further charges would be brought. The new superseding indictment carries 11 charges against him and Burtnick (see list below) with nine solely against Bitar, and accuses the CEO of having approved profit distributions of $10m per month to himself and other owners, despite the operator being on course to use up all its funds. It states that Full Tilt Poker was left with just $2.1m in available funds in June last year, the same month that it saw its operating licences suspended by regulator the Alderney Gambling Control Commission. If convicted on all counts Bitar faces a maximum sentence of 145 years in prison.

“… to prevent players from learning about Full Tilt Poker’s shaky finances and to induce them to continue gambling with Full Tilt poker, Bitar allegedly concocted a scheme in which Full Tilt Poker players were led to believe they were gambling real money when in actuality they were gambling with “phantom” online credits,” a release from the US Attorney’s Office of the southern district of New York said last night.

The other allegations in the indictment include claims that “Acting at Bitar’s direction, [FTP’s finance director] routinely submitted false monthly financial certifications to the AGCC that claimed the company had far more cash on hand than it actually did.” In a statement filed in August 2010, FTP claimed to have more than $370m when in actual fact the amount of cash in its bank accounts totalled less than $125m.

Bitar is the seventh of the 11 defendants charged in connection with the original Internet poker indictment on April 15 2011 to have been arrested. John Campos, former part-owner of SunFirst Bank in Utah, is the only one of the 11 Black Friday indictees to be sentenced. The others arrested to date include Bradley Franzen, Ryan Lang, Ira Rubin, Brent Beckley, Chad Elie and Campos. Absolute Poker director of payments Beckley and several other payment processors, have submitted guilty pleas, while four others including Burtnick, Scott Tom, and Isai Scheinberg and Paul Tate ““ tied to Full Tilt Poker, Absolute Poker and PokerStars respectively – are yet to do so and remain at large.

Full list of charges included in superseding indictment:

1. UIGEA conspiracy (Ray Bitar and Nelson Burtnick are both named as defendants)

2. Violations of UIGEA in relation to Full Tilt Poker (Bitar and Burtnick)

3. Operation of an Illegal Gambling Business: Full Tilt Poker (Bitar and Burtnick)

4. Conspiracy to defraud banks (Bitar and Burtnick)

5-7. Wire fraud against players (Bitar only)

8. Money laundering conspiracy: promotion (Bitar and Burtnick)

9. Money laundering conspiracy: use of funds (Bitar and Burtnick)

10. UIGEA violations in relation to PokerStars (Burtnick only)

11. Operation of an illegal gambling business: PokerStars (Burtnick only)