See http://www.courthousenews.com/2011/09/20/Amended%20Poker%20Civil%20Complaint.pdf

If you go to pages 92 through 103, you will see all of the affected bank accounts. It contains a lot of the usual suspects but there are a lot of new ones.

Why the reference to "Ponzi Scheme" in the thread title?

I believe the ADA referred to the website as a Ponzi Scheme.

Full Tilt Poker A Ponzi Scheme According To U.S. Attorney

http://www.huffingtonpost.com/2011/09/20/full-tilt-poker-ponzi-scheme_n_972349.html

Oh. You have to stretch the definition of a Ponzi scheme pretty far to make that work. It's good PR for the ADA, though.

Doesn't sound to me like you have to stretch the definition much. You might want to read the complaint before making snap judgements. This wasn't Social Security afterall

Beginning in or around August 2010, Full Tilt Poker was often unable to find payment processors to withdraw funds from the bank accounts of its United States players. Instead of disclosing this fact, Full Tilt Poker secretly began to credit funds to players’ online gambling accounts that Full Tilt Poker had never actually collected from players’ bank accounts. As players gambled, and lost, these phantom funds, Full Tilt Poker developed an undisclosed shortfall of approximately $130 million owed to players that Full Tilt Poker had never collected because, in reality, these funds were never withdrawn from players’ bank accounts. The management of Full Tilt Poker, including the FTP Insider Defendants, operated Full Tilt Poker with the hope that only a small number of players would try to withdraw funds at any one time, and that Full Tilt Poker would regularly receive additional deposits in amounts greater than any withdrawal requests.

Sorry I did not include this in the original thread.

http://www.justice.gov/usao/nys/pressreleases/September11/amendedfulltiltpokercomplaintpr.pdf

Definition of a Ponzi scheme:

A fraudulent investment plan in which the investments of later investors are used to pay earlier investors, giving the appearance that the investments of the initial participants dramatically increase in value in a short amount of time.

A Ponzi scheme is a type of investment Fraud that promises investors exorbitant interest if they loan their money. As more investors participate, the money contributed by later investors is paid to the initial investors, purportedly as the promised interest on their loans. A Ponzi scheme works in its initial stages but inevitably collapses as more investors participate.

Or,

A fraudulent investing scam promising high rates of return with little risk to investors. The Ponzi scheme generates returns for older investors by acquiring new investors.

Full Tilt Poker is clearly a massive fraud, but it is not a Ponzi scheme.

1. It did not promise a rate of return for funds invested.
2. It actually offered online poker playing to subscribers/gamblers. In a typical Ponzi scheme, there are no actual securities or investments on offer.
3. Small point, but Full Tilt Poker did not seek investors, it sought customers (which it proceeded to defraud.)
4. If hoping that only a small number of customers will want to withdraw funds from their accounts at any given time is a measure of a Ponzi scheme, then banks/credit unions/savings funds societies/thrifts might also be vulnerable to the same label.

I think "Shell Game" is a more apt description, but "Ponzi Scheme" is much more attention grabbing.

Well - looking at the list of U.S. Banks named in the complaint, I do have to wonder what this will portend for Reg. GG exam procedures, or will they roll-up Reg. GG into the BSA/AML exam manual?

That was my fear as soon as I saw money laundering charges in the initial annoucement.