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| Full Tilt poker tycoon arrested by FBI | Full Tilt poker tycoon arrested by FBI |
| (30 days later) | |
| The gambling tycoon who ran the world's second largest online poker site from servers in Guernsey has surrendered to the FBI just over a year after the Full Tilt internet address was seized by America's top white-collar crime prosecutor and the business effectively shut down. | The gambling tycoon who ran the world's second largest online poker site from servers in Guernsey has surrendered to the FBI just over a year after the Full Tilt internet address was seized by America's top white-collar crime prosecutor and the business effectively shut down. |
| Ray Bitar, chief executive of the Full Tilt group, was arrested on landing at JFK airport. He faces nine charges including bank fraud, money laundering, wire fraud and operating an illegal gambling business. | Ray Bitar, chief executive of the Full Tilt group, was arrested on landing at JFK airport. He faces nine charges including bank fraud, money laundering, wire fraud and operating an illegal gambling business. |
| In April last year the US authorities struck against Full Tilt and two other large websites they said were offering poker illegally in the US. Soon afterwards they discovered what they alleged was a "Ponzi-style scheme" at Full Tilt, where huge sums supposed to be in segregated players' accounts were missing. | In April last year the US authorities struck against Full Tilt and two other large websites they said were offering poker illegally in the US. Soon afterwards they discovered what they alleged was a "Ponzi-style scheme" at Full Tilt, where huge sums supposed to be in segregated players' accounts were missing. |
| On Monday Preet Bharara, US attorney for the southern district of New York, said the alleged fraud orchestrated by Bitar and co-conspirators had left Full Tilt unable to pay about $350m (£223m) to players around the world, believed to include thousands in the UK. | On Monday Preet Bharara, US attorney for the southern district of New York, said the alleged fraud orchestrated by Bitar and co-conspirators had left Full Tilt unable to pay about $350m (£223m) to players around the world, believed to include thousands in the UK. |
| Bharara claimed Bitar had "bluffed his player-customers and fixed the game against them as part of an international Ponzi scheme that left players empty-handed." | Bharara claimed Bitar had "bluffed his player-customers and fixed the game against them as part of an international Ponzi scheme that left players empty-handed." |
| In a statement through his lawyers, Bitar responded: "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." He has pleaded not guilty and has been granted bail after posting a $2.5m bond. | In a statement through his lawyers, Bitar responded: "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." He has pleaded not guilty and has been granted bail after posting a $2.5m bond. |
| Full Tilt had been operating with a poker licence from the remotest Channel island, Alderney, where the majority of the 498 registered companies are gambling-related groups according to the International Monetary Fund. In 2009, the IMF said, some 3 million people were using Alderney online gambling firms, wagering $2.1bn. | Full Tilt had been operating with a poker licence from the remotest Channel island, Alderney, where the majority of the 498 registered companies are gambling-related groups according to the International Monetary Fund. In 2009, the IMF said, some 3 million people were using Alderney online gambling firms, wagering $2.1bn. |
| The Alderney Gambling Control Commission (AGCC) claims the island "transmits more egambling traffic than any other location on the globe and is in fact much larger than the combined activity of its three European offshore rivals [Gibraltar, the Isle of Man and Malta]." | The Alderney Gambling Control Commission (AGCC) claims the island "transmits more egambling traffic than any other location on the globe and is in fact much larger than the combined activity of its three European offshore rivals [Gibraltar, the Isle of Man and Malta]." |
| The principal attraction of an Alderney licence to gambling groups is that there are no gambling or corporation taxes. Firms targeting players in countries such as the UK, where online gambling is legal but tax rates are 15%, are drawn to the island in large numbers. In 2007 even the then state-owned Tote began running its online operations through Alderney to avoid UK tax. | The principal attraction of an Alderney licence to gambling groups is that there are no gambling or corporation taxes. Firms targeting players in countries such as the UK, where online gambling is legal but tax rates are 15%, are drawn to the island in large numbers. In 2007 even the then state-owned Tote began running its online operations through Alderney to avoid UK tax. |
| However, an investigation by the Guardian found there is almost no industry presence on Alderney, where power is provided a by a diesel generator and communications constrained by a single microwave transmitter. | However, an investigation by the Guardian found there is almost no industry presence on Alderney, where power is provided a by a diesel generator and communications constrained by a single microwave transmitter. |
| Almost all Alderney licensees operate from banks of servers in data centres located on the sister island of Guernsey. | Almost all Alderney licensees operate from banks of servers in data centres located on the sister island of Guernsey. |
| The alleged fraud at the heart of Full Tilt is a huge embarrassment for Guernsey, where the island's dominant financial services industry relies on a high regulatory reputation. The Guernsey financial services authority must sign off all companies before they can be incorporated in Alderney. | The alleged fraud at the heart of Full Tilt is a huge embarrassment for Guernsey, where the island's dominant financial services industry relies on a high regulatory reputation. The Guernsey financial services authority must sign off all companies before they can be incorporated in Alderney. |
| The gambling commisssion in Alderney knew that the US authorities regarded Full Tilt's activities in America as illegal when they granted a first license to the group in 2007; the regulator accepted that this position had not been proven in law and remained only an opinion. | The gambling commisssion in Alderney knew that the US authorities regarded Full Tilt's activities in America as illegal when they granted a first license to the group in 2007; the regulator accepted that this position had not been proven in law and remained only an opinion. |
| Bharara claimed Full Tilt had "allegedly lied about its finances" to the AGCC. | Bharara claimed Full Tilt had "allegedly lied about its finances" to the AGCC. |
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