Full Tilt Poker CEO Bitar to stay in jail; DoJ claims he has millions stashed away

TAGs: Black Friday, Department of Justice, full tilt poker, Ray Bitar

full-tilt-poker-ray-bitar-jailDisgraced former Full Tilt Poker (FTP) CEO Ray Bitar will remain in jail at least until July 9, following a court hearing in New York on Friday. On Monday, Bitar flew from Ireland to New York to face charges contained in the April 15, 2011 ‘Black Friday’ indictments brought against online poker companies by the US Department of Justice. After surrendering to US authorities on Monday, Bitar appeared in court where his attorneys requested that Bitar be granted bail. The DoJ argued that the new charges of ‘wire fraud against players’ in a superseding indictment unsealed only after Bitar was in custody had increased the likelihood that Bitar would do a runner if released on bail. In the end, Magistrate Judge Debra Freeman split the difference, granting bail but increasing it from $250k to $2.4m – $1m of which must be in cash – and requiring Bitar to stay detained until such a sum was raised.

On Friday, the two sides squared off again in court before Judge Paul Engelmayer. As reported by poker blogger extraordinaire Diamond Flush, the defense provided evidence that Bitar’s bail terms could be met, while the DoJ attorneys filed a motion in support of pretrial detention (viewable here). After lengthy arguments by both sides, Judge Engelmayer agreed to stay the bail order until the government’s appeal can be heard before Judge Lewis Kaplan, who has overseen the Black Friday court proceedings to date. Said hearing can’t take place until sometime next week, so, for the moment, Bitar’s wardrobe will remain limited to an orange jumpsuit.

The DoJ appeal contains some heretofore unrevealed tidbits regarding Bitar’s tenure as FTP supremo. Bitar canceled a planned visit to the US from Ireland in March 2011 apparently after concluding from “discussions Full Tilt Poker company counsel had with the Government in late 2010 that an indictment could be imminent.” (Bonus tidbit: Bitar’s birthday is April 14!) The DoJ claims to have repeatedly told the attorney Bitar hired post-Black Friday that if he “wanted to address the pending charges, he needed to return [to the US] promptly.”

The DoJ also added credence to the July 2011 rumors that FTP shareholders had attempted to oust Bitar. The DoJ claims Bitar beat back the coup attempt with the support of “several allies” and by insisting that “his role at the company was too critical, and that he and only he could raise money from new investors who might acquire a controlling stake in the company to support its continued operations outside the United States.” The DoJ maintains Bitar was all too aware that FTP was by then a Ponzi scheme, and his desire to maintain control was strictly because he “wanted to prevent it from unraveling.” Bitar apparently also wanted the capacity to keep cutting himself paychecks, receiving “over $2m salary payments” between Black Friday and this past Monday.

In arguing against Bitar’s release on bail, the DoJ points out that Bitar paid himself “at least” $40m while running FTP “and has provided no accounting for where those funds now are.” Further, the government alleges that “earlier this year, the defendant attempted to access over $24 million held in his name in a foreign bank account that had not been listed in the Indictment or restraining order and of which the Government had not been aware … The recent discovery of these accounts raises questions about Bitar’s willingness to comply with the restraining order … and about what other overseas accounts Bitar may have.”

The DoJ argues that it would be “nearly impossible” to prevent Bitar slipping over the border into Mexico from California, where the terms of the bail order permit him to reside. Further, the millions Bitar holds in foreign banks could be used “to reimburse Bitar’s friends and family costs associated with the forfeiture of his bail bond.”

Finally, the government dropped a hint regarding the rumored acquisition of FTP’s assets by rival company PokerStars by noting that Bitar’s decision to return to the US was made “shortly before new ownership was expected to take over at Full Tilt Poker and terminate Bitar anyway, jeopardizing his ability to remain in Ireland.” So that’s why he decided to get on that plane!


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