The so-called “backlog” and Black Friday took center stage in the third installment of “The Lederer Files” from PokerNews, a seven-hour sit-down interview with embattled Full Tilt Poker front man Howard Lederer (pictured). Cash discrepancies in an August 2010 report were up first in a 28-minute interview, with Full Tilt Poker falsely reporting to the Alderney Gambling Control Commission that it had $370 million in total cash and $330 million in player deposits when an audit revealed just $122 million in cash. Essentially, the poker site was $200 million short in cash to players.

Watch Part 3 here.

On the audit, Lederer claimed, “No one was made aware of that report. I don’t know anything about that report. In terms of investigating what happened and what led to April 15, I had spent no energy trying to answer these particular questions about whether it was August, October, or earlier in the year in 2010. I’m not a professional investigator… It’s all a mystery to me in terms of the actual timing.”

In November 2010, Full Tilt Poker CEO Ray Bitar and payment processing guru Nelson Burtnick decided to start crediting U.S. customer deposits before Full Tilt Poker received the funds, creating the so-called “backlog.”

Lederer chastised the autocratic decision, telling PokerNews, “A decision to embark on allowing these transactions to go on for what must have been maybe months and to rise into the nine-figure range should have been a Board decision. We were not brought into that decision at all… It turned out to put the company over the edge in terms of its cash coverage. The company had no right to be running a backlog.”

Lederer called the backlog “unacceptable” and said over 100,000 people benefited from it. In February 2011, Bitar (pictured) received a projection from Full Tilt’s financial department saying that the site would run out of cash within a few months. Lederer claimed, “Ray didn’t let on that this was going on… Clearly, things got out of hand and people in Dublin were trying to clean up the mess somehow and not telling the Board or the members.”

Despite the dire financial straits Full Tilt was in at the time, distributions continued. Lederer called the payments “horrible” and argued, “If the Board had any inkling that there was this kind of hole in our balance sheet, we would have responded in the same way we tried to respond after April 15. There would have been no distributions. There wouldn’t have been any discussion [of making distributions].”

Lederer revealed that he was not aware of the extent of Full Tilt’s financial struggles until April 7, 2011, just a week before Black Friday: “I was never shown a balance sheet or any kind of a financial document that would have suggested we were in a severe state of financial distress before April 15.”

On April 7, Lederer was in Dublin, where a Board meeting took place. There, Bitar told him there was a nine-figure backlog and Lederer was “shocked and upset.” Lederer left for a USO Tour stop shortly thereafter and admitted that one evening was insufficient time to grasp the gravity of the backlog.

Was there discussion about removing Bitar from his post as CEO given the financial mess? “I don’t think there was any point in having a Board meeting right then,” Lederer said. “You have to understand [the news] first. You don’t just go, ‘Oh, you didn’t tell me about that? You’re fired.’ That’s absurd.” Lederer added that he was coming back to Dublin on April 19 and could have wrapped his head around the backlog then.

Before “The Professor” could return to Ireland, however, Black Friday hit on April 15. “I found out via e-mail,” Lederer recalled. “I was in Dubai, so it was late at night. I was at some restaurant with Huck Seed (pictured)… It was obviously a shock. Initially, people had heard there were indictments too, but no one knew who, so we really didn’t know much for a half-hour or so.”

“Once we saw the indictments, there was some sort of Board call,” Lederer narrated about that landmark day in online poker history. “Plus, the company needed to figure out an effective way to geo-block all of the U.S. players. There were a lot of decisions that had to be made very quickly.” Full Tilt’s general counsel and PR department were on the call as well, but the topic of ousting Bitar did not come up.

Full Tilt executives then distributed a press release announcing their intention to jettison the U.S. market. At the end of the document, a sentence about players’ money being safe and secure was made. “That was clearly inaccurate,” Lederer confessed.

Part 4 of the Lederer interview was also released today. Read PocketFives’ write-ups of Part 1and Part 2.