Full Tilt Poker co-founder and director Howard Lederer has filed a motion to dismiss the civil charges against him that seeks $42m in damages for his role in allegedly defrauding customers and operating a “global ponzi scheme.”
The arguments to dismiss are two-fold: Firstly, that no evidence has been provided that Lederer personally was involved in defrauding customers; secondly, that Full Tilt Poker activities did not fall under the IGBA’s definition of operating an illegal gambling business.
“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,” states the filing.
In the indictment, it is alleged that customers were lied to about their funds being segregated from the company’s operating funds and that an employee drafted email templates to send to customers to assure them their money—which was nearly all gone—was “safe and secure.”
“That is the only allegation relating to Lederer’s participation in or knowledge of the alleged fraud against FTP’s customers,” states the motion to dismiss. Later, it adds that Lederer cannot be held responsible for the posts of “FTPDoug,” a customer service representative on poker forum 2+2 that frequently assured players that their funds were safe, and regularly held Q&A threads to promote the poker room.
“Notably, however, the complaint nowhere alleges that Lederer knew about or had anything to do with this supposed miscoding of transactions by FTP,” it adds.
As to the second point, it is argued that the Illegal Gambling Business Act (IGBA) simply does not apply: the statute “has never been successfully applied solely to poker clubs, let alone internet poker companies headquartered and operated entirely abroad.”
Rafe Furst has also filed a similar motion to dismiss the civil charges against him. He allegedly holds 2.6% of the company, the smallest out of the four indicted (Ray Bitar, Chris Ferguson and Howard Lederer the other three).
At the time of writing, no motion to dismiss from Chris Ferguson has been filed, although is expected by the end of the day.
