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PokerStars, Full Tilt Poker Defendants File for Dismissal of DOJ Complaints[ return to main articles page ]

By: Earl Burton    [See all articles by Earl Burton]
Published on Jul 11th, 2012
At virtually the last minute, the major players in last year's Black Friday indictments have filed legal motions seeking to dismiss the civil complaints levied against them. According to eGaming Review, PokerStars' legal team filed a motion for dismissal with the Southern District of New York, alleging that the Federal complaint hasn't proven there was a crime committed.

Although the PokerStars motion says the Federal complaint "reads like a novel," PokerStars claims that there is a high standard to prove in the civil action and that the U.S. Department of Justice has failed to reach said standard.

The New York law firm Skadden, Arps, Meagher, and Flom filed a 51-page motion for the dismissal of all the charges against PokerStars, pointing out three areas where Federal authorities have failed to prove their case. In responding to the Federal claim for almost $1.5 billion from PokerStars, the attorneys state that the Federal action doesn't provide adequate details as to what PokerStars actually did. Thus, the company cannot prepare an adequate defense.

In responding to the Feds' contentions that PokerStars violated the Illegal Gambling Business Act, PokerStars' attorneys declared that there isn't a "viable theory" of how the company infringed on the act, wire and bank fraud regulations, and U.S. money laundering laws. Finally, PokerStars' legal team contends that the Federal Government is not able to seize money or property from the company because it lacks the jurisdictional authority to do so.

"In light of the heightened pleading standards applicable to civil forfeiture claims, and because the facts alleged in the complaint do not give rise to liability under the relevant criminal and forfeiture statutes, each of these causes of action must be dismissed as a matter of law," PokerStars' legal team requests.

The PokerStars action comes on the heels of Full Tilt Poker's Howard Lederer (pictured), Chris Ferguson, and Rafe Furst's motions for dismissal. All three filed similar motions earlier this week.

"Although the Government alleges that Lederer participated in a scheme to defraud FTP's customers, specific factual allegations against him are nowhere to be found," Lederer's motion stated. "How, exactly, did he mislead players regarding their deposits and accounts? What did he say to them, and when did he say it? Was any information Lederer allegedly provided false when given, and if so, did Lederer know it? The Government doesn't say."

The document continues, "The only specific factual allegations against Lederer are that he co-founded FTP and helped build it into a successful business, and that he received distributions as part-owner of the company. These allegations fail to state a fraud claim - or any claim - against Lederer."

The important point for many American poker players is what the motion means for the rumored PokerStars purchase of Full Tilt Poker and the potential refund of FTP bankrolls. While the DOJ and PokerStars have been in discussions for a resolution to the situation, those talks have dragged on. Then, PokerStars had to file its motion for dismissal before the appropriate time expired.

eGaming Review doesn't opine on whether the sale discussions will be affected by PokerStars' motion. The continued sticking points, according to eGaming Review, continue to be the amount of any fine (a $1 billion price tag is reportedly the price) and exoneration for PokerStars founder Isai Scheinberg, executive Paul Tate, and former Full Tilt Poker leader Nelson Burtnick.

Last week, another player in the ongoing saga, Full Tilt Poker's Ray Bitar (pictured), surrendered to Federal authorities in New York after flying in from Ireland. On Tuesday, Bitar settled on a $2.5 million bond, with $1 million of it secured, and was released despite the DOJ's insistence that he was a flight risk.

Although the judge denied the DOJ's request for Bitar to remain in jail, it was revealed that he allegedly received over $2 million in salary following Black Friday.

Bitar will not exactly walk away a free man, however. There were several conditions for his release, including electronic monitoring, giving up his passport, and restrictions on his travel until trial. He will be allowed to return to California to live and return to New York for any legal proceedings, but any other travel is prohibited.

Comments

  1. [?] Progress
  2.  
    Originally Posted by ei8htyei8ht View Post

    [?] Progress

    It's a development, although the possibility that it could derail the Stars/Tilt deal is a bit alarming. I suppose time will tell whether the motion to dismiss impacts the ongoing Stars negotiations with the DOJ about FTP.
     
  3. Skadden, Arps, Meagher, and Flom are legal heavyweights and the DOJ knows it. The DOJ has been on quite the losing streak lately in high profile cases (Roger Clemens, John Edwards) and they might be feeling a bit on the ropes these days.

    It will be interesting to see how this plays out if Scheinberg decides to have some backbone and fight.
  4.  
    Originally Posted by Dan View Post

    It's a development, although the possibility that it could derail the Stars/Tilt deal is a bit alarming. I suppose time will tell whether the motion to dismiss impacts the ongoing Stars negotiations with the DOJ about FTP.

    Actually, the motions are a necessary step in facilitating a deal between the DOJ, PokerStars, and FullTilt. The deadline for filing was approaching and this step is normal. Would not deter any previously talked about deals. The DOJ also asked for a dismissal of charges brought against PokerStars and FullTilt by Cardroom International, and a class action lawsuit against FullTilt by its players.
  5. Lets say that by some miracle that the dismissal is granted, does Stars come bak to the US at that point? Do they wait for a bill to pass to take away the grey area?
  6. What is the grey area? PS & FT do not think they broke the law and Merge, Bovada, Revolution, Ever whatever, etc. etc. never even saw a problem!

    Just hope they dont take it to the Supreme Court, they will make up some new laws and screw everyone!
  7. I don't understand why PokerStars and Full Tilt are so closely tied together legally. I understand that FullTilt players want to get paid by why should PokerStars have to pay them? PokerStars has been completely honest and fair to its players and I am grateful to them. FullTilt cheated a lot of people and FullTilt people can go to jail and stay there. Let's get PokerStars up and running again and let FullTilt twist in the wind.
  8. Thanks for the input Shakhtar
     
  9. at this point part of me wants this to go to trial now so it can be proven that our gov had no right to seize money from payment processors all those years. How sick would it be if they had to return all that money and we got our bankrolls back that way.
  10.  
    Originally Posted by frizzlefry777 View Post

    at this point part of me wants this to go to trial now so it can be proven that our gov had no right to seize money from payment processors all those years. How sick would it be if they had to return all that money and we got our bankrolls back that way.


    Well they definitely did not have right, but that is not how the corrupt system of government and justice here in the United States works.
  11.  
    Originally Posted by shakhtar View Post

    Actually, the motions are a necessary step in facilitating a deal between the DOJ, PokerStars, and FullTilt. The deadline for filing was approaching and this step is normal. Would not deter any previously talked about deals. The DOJ also asked for a dismissal of charges brought against PokerStars and FullTilt by Cardroom International, and a class action lawsuit against FullTilt by its players.


    What makes you say this?
     
  12.  
    Originally Posted by FakeJchan View Post

    What makes you say this?

    I don't really understand what exactly you're questioning, but feel free to read the latest court filings.

    http://dockets.justia.com/docket/new...v02564/377900/
  13. So, the DOJ fudged up??? Not a big surprise... I wonder how many employees at the DOJ played on stars and full tilt?
  14. These articles are about as big of an emotional rollacoaster as it was to be aipf on Full Tilt.
  15. someone just should kick some asses
     
  16.  
    Originally Posted by shakhtar View Post

    I don't really understand what exactly you're questioning, but feel free to read the latest court filings.

    http://dockets.justia.com/docket/new...v02564/377900/


    Sorry for being vague. So when you say that this is normally, do you mean it is normal in all criminal cases in general to wait to the last minute and then file to dismiss? Is this so it buys the defense more time?
    Is it a necessary step because the deal couldn't be completed without the lawsuits being dismissed? Does this mean that a condition of the deal going threw is that the personal law suits against Bitar, Lederer ect are dropped?
    Does this mean that in your opinion this is a step towards a completion of deal of PokerStars buying Full Tilt rather then away from it?
     
  17. It is about time someone stood up to this shake down. I know common sense doesn't apply in court but UIGEA is Unlawful Internet Gambling Enforcement Act correct? Since DOJ has said the Wire Act doesn't apply to poker wouldn't that mean poker is not Unlawful Internet Gambling and therefore UIGEA can't be used?Seems cut and dry to this layman but I am sure DOJ will pull something to try to save face.
  18.  
    Originally Posted by FakeJchan View Post

    Sorry for being vague. So when you say that this is normally, do you mean it is normal in all criminal cases in general to wait to the last minute and then file to dismiss? Is this so it buys the defense more time?
    Is it a necessary step because the deal couldn't be completed without the lawsuits being dismissed? Does this mean that a condition of the deal going threw is that the personal law suits against Bitar, Lederer ect are dropped?
    Does this mean that in your opinion this is a step towards a completion of deal of PokerStars buying Full Tilt rather then away from it?

    The filings are normal legal procedure. Sometimes motions to dismiss are filed early, sometimes at the deadline. But before a trial, they are almost always filed for something. It really has no relevance either positively or negatively regarding any deal talks. It is however worth noting that the DOJ filed motions to dismiss lawsuits against Stars and Tilt from 3rd parties at the very same time that Stars and Tilt filed their dismissals. This could certainly lead one to speculate they are related to a possible deal, but this would be only clearing the way for a possible deal, and in no way signifies that they have actually reached one.

    The endgame for PokerStars is eventual access to the US market, and Isai Scheinberg wants to live without fear of goons picking him up at some airport in the future. The DOJ wants loads of cash, and admissions of guilt (regardless if there is any or not). PokerStars has the legal guns to fight this in court and win, but they have to balance that with the big picture as far as it's effect on someday re-entering the US market in some form.

    There are billions at stake, and powerful interests on both sides of this fight. Outside companies, who want PokerStars eliminated have influence with some congressman, and as usual, this turns into backroom politics. There are many layers to this, and I'm only stating the obvious which everyone else already knows. I have no "inside scoops", so your guess is as good as mine as far as what is going to transpire.
  19. IMHO it now makes more sense for Stars to buy Tilt. If the DOJ is forced to dismiss the charges and Stars and Tilt come back to us then the execs at Stars will own the two most popular sites. May be kinda bad for us players being there won't be much competition for rakeback and deposit bonuses etc...
  20.  
    Originally Posted by Boofer View Post

    IMHO it now makes more sense for Stars to buy Tilt. If the DOJ is forced to dismiss the charges and Stars and Tilt come back to us then the execs at Stars will own the two most popular sites. May be kinda bad for us players being there won't be much competition for rakeback and deposit bonuses etc...

    It won't be bad cause Stars makes a ton of money now with a system that works well, for them and their players. No reason to change things once they are back in US market and if they takeover FT. Just my 2 cents
     
 
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