On Monday, PocketFives reported that Full Tilt Poker CEO Ray Bitar had surrendered to U.S. authoritiesin New York more than a year after being charged with numerous crimes in the Black Friday indictment. In conjunction with his apprehension, the U.S. Attorney’s Office unsealed a Superseding Indictment that updates the charges against both Bitar (pictured) and Full Tilt’s head of payment processing, Nelson Burtnick. The document also details Full Tilt’s transgressions after Black Friday. Read it.

The section entitled “Lies to Prevent the Scheme from Being Discovered” begins almost halfway through the 36-page Superseding Indictment on page 15. Remember that on Black Friday, the U.S. Government seized the poker room’s domain name, FullTiltPoker.com. Subsequently, U.S. players were barred from the site, but players from other countries were still able to log in and compete for real money.

At first, the poker community assumed that the dust would settle and Americans would be able to log in and cash out. The first alleged lie detailed in the document was a Bitar-approved “message to U.S. customers” on April 15 that assured players that their funds were safe and the company was working on getting all monies returned as soon as possible.

But, Bitar allegedly knew Full Tilt could not pay back its players. On April 20, the site issued a press release lamenting repayment delays, citing “numerous legal and jurisdictional issues” as the problem.

The U.S. Government says this statement was a blatant lie, noting in the Superseding Indictment, “In truth and in fact, however, Full Tilt Poker could not return player money because, as Bitar knew, the player money had been spent by the company and distributed to its owners. Indeed, Full Tilt Poker’s internal financial statements reported that as of March 31, 2011 the company owed $390 million to players around the world, but had less than $60 million in its bank accounts.”

Full Tilt’s yarns were not limited to U.S. customers. On more than one occasion, starting in April 2011, Full Tilt Poker assured non-U.S. players that the trouble in the United States “in no way affects your ability play safe and secure online poker in your country…. business as usual and we hope you continue to enjoy playing Full Tilt Poker.”

The U.S. District Attorney’s Office begs to differ, saying in the Superseding Indictment that Bitar knew funds were not safe and not in segregated accounts separate from the company’s operating funds.

The DOJ wrote, “As Bitar was aware, Full Tilt Poker was entirely dependent on new player deposits to meet the backlog of player withdrawal requests and cover the company’s operating expenses. For example, on or about June 10, 2011, [Full Tilt Poker’s Director of Finance] e-mailed company financial reports to Bitar showing that despite ‘$8 to $9 million per week’ from new deposits, the company only had only $2.1 million in ‘available funds’ and had ‘current outstanding payments’ due of $29.1 million, including $12.5 million to pay in ‘backlogged player withdrawal requests.'”

The DOJ continued, “[Full Tilt’s]e-mail noted that the available cash was being divided ‘back and forth’ between ‘must pay invoices’ and ‘withdrawals’ in order ‘to keep movement on both fronts.'”

Even as this was going on, the Superseding Indictment alleges, Bitar and Burtnick were still drawing salaries. In fact, they allegedly both made several million dollars after Black Friday, with the money coming from player deposits. “In effect, Full Tilt Poker operated what was, by then, nothing more than a Ponzi scheme.”

Bitar also tried to actively cover up Full Tilt’s financial problems. “On or about June 12, 2011,” Bitar allegedly urged Full Tilt executives to nix a press release that contained bad news because he felt it would start “a possible new run on the bank” when Full Tilt “can’t even take a $5 million run.”

The Superseding Indictment also alleges that Full Tilt filed false financial statements with the Alderney Gambling Control Commission, the regulatory body through which Full Tilt was licensed, in order to make the Commission believe it had the necessary funds to repay players when, in fact, Full Tilt “was essentially insolvent.”

Read the entire Superceding Indictment.