Friday, August 02, 2013

Garden City Group Confirms Final Balances to Be Paid, Not Deposits

On the subject of the very slow claims remission process for Full Tilt Poker, to be eventually overseen by the Garden City Group, there's the tiniest bit of news.  And by tiny, we mean tiny; a recent update to the site shows a recent addition of some old news, but what's there is worth examining very closely, because it seems to confirm the answer to one question.

As published on the GCG site, this text is new (August 1st):

Important Update About the Calculation Formula and Start of the Claims Process 

GCG, working with the Asset Forfeiture Unit of the United States Attorney's Office for the Southern District of New York and the Asset Forfeiture and Money Laundering Section of the United States Department of Justice, has completed the review of data provided by Full Tilt Poker ("FTP"). It has been determined that the calculation formula to be used for the Petition for Remission process will be based on players' final balances with FTP as of April 15, 2011 (the "FTP Account Balances"). The claims process will begin shortly. Once the process begins, GCG will email instructions on how to complete an online claim to all potentially eligible claimants identified by GCG utilizing data supplied by FTP.  Account balances from online poker sites other than FTP are not included in this remission process. Petitioners must also meet all other requirements outlined in 28 C.F.R. § 9.8 to be considered eligible for remission. 

If you do not receive an email notice and you believe you are eligible to participate in the remission process, you may file a claim online using the directions that will be provided on this website. If the forfeited funds available for distribution equal or exceed the aggregate FTP Account Balances for all eligible Petitioners, each eligible Petitioner with an approved claim will receive the entirety of his or her FTP Account Balance. If the aggregate FTP Account Balances for all eligible Petitioners exceed the funds available for distribution, payments shall be made to eligible Petitioners on a pro rata basis. Please continue to check this website for updates regarding this administration. Last updated August 1, 2013. Followed by: Summary of the Settlement Agreement and Forefeitures

In July 2012, the United States entered into settlement agreements with FTP and PokerStars - two of the three online poker companies named as defendants in a civil forfeiture action brought by the United States alleging bank fraud, wire fraud, money laundering, and illegal gambling offenses. Under the terms of the settlement with FTP, the company agreed to forfeit virtually all of its assets to the United States (the "Forfeited Full Tilt Assets") in order to fully resolve the action. The amended complaint filed in that action alleged that FTP defrauded its players by misrepresenting to the public that player funds held by FTP were safe, secure and available for withdrawal at any time. In reality, the company did not maintain funds sufficient to repay all of its players and instead, utilized player funds to finance more than $400 million in dividend payments to Full Tilt's owners.

Under the terms of the settlement with PokerStars (the "PokerStars Settlement"), the company agreed, among other things, to forfeit $547 million to the United States and to assume FTP's liability for the approximately $184 million owed by Full Tilt to foreign players. The PokerStars Settlement also provides that PokerStars will acquire the Forfeited Full Tilt Assets from the Government and also precludes PokerStars from offering online poker for real money in the United States unless and until it becomes permissible to do so under relevant law. Utilizing funds forfeited from PokerStars in this action, the Department of Justice has established the Petition for Remission process, by which eligible U.S. fraud victims will be able to seek compensation for their losses.

Let's look at that more closely.  Besides the chiding about the misrepresentation by Full Tilt, the statement -- an official statement, mind you -- is very specific about detailing that the money paid by PokerStars was very specifically related to the complete settlement of both PokerStars and Full Tilt matters.

The balances vs. deposits thing had been argues for a while, but the truth of it is, despite the argument that this solution condones the poker playing, it's the only solution that really made sense.  Besides that, it's a lot less expensive; to think that the US government was going to give all of the US Full Tilt poker-playing freeroll on their deposits was a pipe dream, same as it was that they'd allow the FTP owners to walk away with any latent profits that that sort of a solution would imply.

And what isn't mentioned at all?  That would be Absolute Poker.  Here's the key line: "Account balances from online poker sites other than FTP are not included in this remission process." 

Also, the first paragraph of the second recent addition clearly defines the settlement as being in connection with "two of the three online poker companies," and not with the third, Absolute.

While it was always a pipe dream of AP and players to think that this settlement money would somehow be used to refund players from those sites, this latest seems to confirm that that won't be happening, and that only Full Tilt players will be receiving refunds from the GCG process.

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