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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK -x UNITED STATES OF AMERICA -vRAYMOND BITAR, and NELSON

BURTNICK, Defendants. -x
COUNT ONE

SUPERSEDING INDICTMENT

88 10 Cr. 336

(LAK)

(Unlawful

Internet

Gambling

Enforcement

Act Conspiracy)

The Grand

Jury charges:
Introduction

1. enacted making accept"

On or about October Internet crime

13, 2006, the United- States Enforcement businesses Act ("UIGEA"),

the Unlawful it a federal most

Gambling

for gambling

to "knowingly

forms of payment of another

"in connection in unlawful

with the Internet gambling."

participation Notwithstanding company

person

the enactment by United to offer

of UIGEA,

Full Tilt Poker - a poker players in

founded

States professional internet gambling

2004 - continued States residents,

on poker to United $1 billion

and took in at least an estimated residents United through April 15, 2011.

from United 2. to process gambling,

States

Because

States banks were activity

largely

unwilling

payments

for an illegal

such as internet to avoid bank

Full Tilt Poker used fraudulent

methods

restrictions United States

and to receive residents

hundreds

of millions through BURTNICK

of dollars

from

who gambled

Full Tilt Poker. conspired with

Defendants others

RAYMOND

BITAR and NELSON United

to deceive

States banks of millions

and financial of dollars

institutions

into processing

hundreds

for Full Tilt received to

Poker, by, among other things, from United numerous States gamblers

arranging

for the money as payments

to be disguised

non-existent

online merchants

and other non-gambling

businesses. 3. To encourage BITAR, players to deposit money directed with Full

Tilt Poker, RAYMOND Poker employees deposits

the defendant, potential

Full Tilt

to assure

customers

that player that would operating knew - Full accounts and be

would be held in "segregated and distinct"

accounts"

kept "separate accounts.

from the company's

In truth and in fact - and as BITAR well player funds in separate purposes

Tilt Poker did not protect instead used player

funds for whatever

BITAR directed, Poker

including hundreds

to pay BITAR. and the other owners of Full Tilt of millions of dollars. Accordingly, when

Full Tilt States

Poker was forced in April unable million

to stop operating

- first in the United

2011 and then internationally around

in June 2011 - it was $350

to repay players it owed them.

the world the approximately

2

The Defendants

And

Their

Companies

4. BITAR, Officer through

At all times

relevant

to this Indictment, owner,

RAYMOND

the defendant,

was a founder,

and Chief Executive 2009 up

of Full Tilt Poker. and including

From in or about January

at least in or about June 2012, NELSON was the Director of Payment Processing

BURTNICK,

the defendant, Poker.

for Full Tilt

Prior to joining processing

Full Tilt Poker BURTNICK department Through for Full Tilt its website, gambling and

was the head of the payment Poker's principal

competitor, Full Tilt

Pokerstars.

fulltiltpoker.com, on internet certain poker

Poker provided

real-money

games to customers

in the United

States

other 5.

countries. At all times through relevant to the Indictment, companies all Full Tilt

Poker operated beneficially Limited RAYMOND

a group

of related

owned and controlled Company.

by Tiltware

LLC, a California included

Liability BITAR,

Tiltware

LLC's owners

the defendant,

and approximately

22 other poker

individuals, players.

many

of whom were well known professional RAYMOND

Defendants

BITAR and one of these professional not named a defendant to the indictment LLC operated herein the coPoker

poker players,

a co-conspirator

("CC-l"), were at all times managers through of Tiltware several LLC.

relevant Tiltware

Full Tilt and other

other privately

held corporations to Kolyma

entities,

including

but not limited

Corporation

A.V.V.,

3

Pocket Vantage Ltd.

Kings Ltd.,

Pocket Kings Consulting

Ltd.,

Filco Ltd., Poker

Ltd., Ranston

Ltd., Mail Media Ltd., and Full Tilt

(collectively, where

"Full Tilt Poker").

Full Tilt Poker operated headquarters, and

in Ireland,

it maintained

its principal

in the United

States,

among other places.

The Defrauding of Financial Institutions 6. Because internet gambling was illegal, Full Tilt

Poker was not permitted accounts States NELSON in the United

by United States

States banks to open bank proceeds from United RAYMOND various BITAR,

to receive

gamblers. BURTNICK means

To defeat and their designed

this ban, defendants devised

co-conspirators to trick United

deceptive financial

States banks and transactions on

institutions

into processing

gambling

Full Tilt Poker's Fraudulent Credit 7. MasterCard

behalf. Card Processing to the Indictment, credit Visa and

At all times relevant

required

banks that processed "acquiring

card transactions

for merchants transaction relevant

(so-called

banks")

to apply a particular At all times credit cards

code to internet

gambling

transactions. issuing

to the Indictment, (so-called

most U.S. banks "issuing

to U.S. residents extend credit

banks")

elected

not to and as

to customers

for internet

gambling

purposes

a matter

of policy

automatically transaction

declined code.

transactions

bearing

that internet

gambling

4

8. regulations gambling

In order to circumvent and trick U.S. banks RAYMOND

the Visa and MasterCard their internet the

into authorizing

transactions, worked

BITAR and NELSON

BURTNICK,

defendants,

with others gambling

to apply incorrect. codes to Full in order to disguise

Tilt Poker internet the nature

transactions

of those transactions

and create the false appearance to internet issuing gambling. banks were that would As a

that the transactions result tricked

were unrelated United

of this deception, into approving

States

payments

for internet if properly

gambling coded.

have automatically Fraudulent E-Check 9. processing, arranged accounts

been rejected Processing

In addition RAYMOND

to the fraudulent

credit

card

BITAR and NELSON transfer residents

BURTNICK,

the defendants,

to electronically of United States

funds from the checking in a way that disguised gambling. to this Indictment, the that

the transactions 10. Automated network,

were for internet At all times

relevant

Clearinghouse administered

(or "ACH")

system was an electronic Reserve, that allowed States for

by the Federal

electronic through

fund transfers

to and from United checks."

bank accounts

"e-checks"

or "electronic

A principal processing was that the account at

difficulty

for Full Tilt Poker in e-check the merchant Originating

ACH system required a United States-based

to open a processing Depository Financial

5

Institution

(or "ODFI"). gambling

Because

Full Tilt Poker was not legally States, it could not - and in its own the companies, using the for

able to offer

in the United

did not - open bank accounts name. Instead, RAYMOND agents

for e-check

processing BURTNICK,

BITAR and NELSON to create

defendants, complete

hired

dozens of phony

with

fake websites,

and to open bank accounts as a cover to process

names of these phony Full Tilt Poker.
The 11.

companies

payments

Corruption

of Financial

Institutions

In addition

to processing

transactions

by lying to the

financial defendants,

institutions, worked

RAYMOND

BITAR and NELSON

BURTNICK,

with co-conspirators of failure

who sought

out small

banks on the verge millions gambling November George, of dollars

that were willing in return

to accept

in "investment" For example,

for processing 2009 through Bank in Saint in poker in

transactions. 2010,

from November on Sunfirst

Full Tilt Poker relied

Utah to process

tens of millions

of dollars dollar

transactions the bank. ordered

in return for a multi-million the Federal Deposit

investment

After

Insurance

Corporation Full Tilt Poker Bank

Sunfirst

Bank to cease

such processing, in Illinois

relied on two single branch

banks

- All American in

and New City Bank - to process transactions banks have in return since failed

millions

of dollars

for investments and been

in these banks.

All three

seized by bank

regulators,

6

causing

estimated

losses to the Federal

Deposit

Insurance

Corporation

of over $70 million. The Defrauding of Customers

Lies About

Segregated 12.

Accounts the enactment inquired of UIGEA, players in the

Following

United whether

States

and elsewhere

of Full Tilt Poker as to with the company 2008, RAYMOND was safe. the

the money

they were depositing from at least March

As set forth below, defendant, prospective "segregated company's directed

BITAR,

Full Tilt Poker employees that player

to falsely in

assure

customers accounts" operating

funds were protected and distinct"

that were "separate However,

from the

accounts.

as BITAR well

knew, these induce

representations customers

were simply

lies intended and entrust

to fraudulently their money

to do business

with,

to, Full

Tilt Poker. 13. potential customer By way of example, ("Customer writing money" on or about March 17, 2008, a

customer support,

1") e-mailed

Full Tilt Poker about the

that he was "very concerned

risk of depositing money

with Full Tilt Poker and asking held in trust?"

"is my On or

that I have in my Full Tilt account

about March forwarded

18, 2008 a Full Tilt Poker customer l's e-mail to RAYMOND

service manager

Customer

BITAR and CC-l and asked BITAR responded by e-

how to reply. mail, copying

On the same day, RAYMOND CC-l,

"The best we can say is we keep a 100% of

7

players available check." response, response
1) :

[sic] funds in segregated to players

accounts.

Funds will always fraud

be

24 hours a day after a reasonable 19, 2008, after receiving e-mailed

On or about March the customer to Customer

BITAR's

service manager

the following to BITAR and CC-

1 (which was then forwarded

Full Tilt Poker takes the security of our player's money very seriously indeed. To protect our players and our business from financial problems, all player accounts are segregated and held separately from our operating accounts. Unlike some companies in our industry, we completely understand and accept that player account money does not belong to us. It belongs to our customers. Player account funds are available to the account holder 24 hours a day, 7 days a week, 365 days a year, and all withdrawals are processed immediately upon completion of a review for fraudulent activity. 14. Full Tilt Poker seeking On or about March 22, 2008, Customer initial 1 emailed

in reply to the company's as to whether which

response,

clarification accounts

"player

funds are held in itself."

segregated RAYMOND

can't be used by the company reviewed and indicated

BITAR,

the defendant,

bye-mail

that he approved .as follows:

a draft response

to Customer

1 that read in part

Players' funds at Full Tilt Poker are kept in several deposit accounts throughout the world, all of which are separate and distinct from our operating accounts. Funds are transferred from the players' deposit accounts to Full Tilt Poker's operating accounts only after we have earned them. This
8

is not done each time Full Tilt earns a rake or even daily, but as Full Tilt's earnings accumulate, we make periodic transfer of the earnings from the Deposit Accounts to the Operating Accounts, from which we then pay outside expenses, Full Tilt employees and ultimately, the shareholders of the company .... In closing we would also like to say that you are always welcome to withdraw some or all of your funds if you feel uncomfortable. But we would also like to assure you that they are not at all at risk, except when you use them to play, and there is no poker site on the Internet where they would be any safer. 15. including language On multiple occasions from 2008 up through and

at least the fall of 2010, Full Tilt RAYMOND BITAR, the defendant,

Poker used the to Customer 1

had approved

as the basis e-mailed

for form e-mails

sent routinely

to other players funds. Full

who

Full Tilt Poker about the safety of their to respond

Tilt Poker also used this language on a leading poker internet

to comments worries

posted that

forum regarding accounts

player

Full Tilt Poker used player advertising

to cover the company's Specifically, to monitor a and respond July

and other operating

expenses.

representative

of Full Tilt Poker assigned posted the following

to forum messages 18, 2008:

response

on or about

I'm not sure where most of the information in this thread is coming from, but I do want to clear up the most important piece of bad info Players' funds at Full Tilt Poker are kept in several deposit accounts throughout the world, all of which are separate and distinct from our operating 9

accounts. Funds are transferred from the players' deposit accounts to Full Tilt Poker's operating accounts only after we have earned them. 16. representations made about In truth and in fact, contrary that RAYMOND player BITAR, to the directed be

the defendant,

segregated

accounts, player

at no time in its history accounts.

did Full Tilt Poker protect Instead, at all relevant the player

funds in separate

times,

Full Tilt Poker simply from third party where player funds

transferred payment

funds it collected

processors

into company

bank accounts,

were combined proceeds

with company

funds.

Full Tilt Poker used the bank accounts expenses as and

of these intermingled including

company/player

BITAR directed, to pay BITAR million

to pay company

operating

and the company's

other owners

a total of over $430 in or about April at least accounts as

dollars

from in or about

2007 through received

2011. Of this total~ BITAR personally approximately salary $41 million from these

intermingled

and "profit" 17.

sharing. BITAR, the defendant, his employees was also aware to provide to that

RAYMOND

the assurances prospective materially mailed needed

he was directing

customers misleading.

about the safety

of their funds were 23, 2008, BITAR counsel ethey

On or about.March general

CC-1 and Full Tilt Poker's "a good canned response

that while

to send to the one or two guys

10

that write "bottom

in a month"

about the safety

of their money

the act like

line is we are not a bank" even though customer funds "will always

"we might

one" and therefore Lies About

be at risk."

Cash On Hand 18. By using player funds to finance Full Tilt Poker's a

operations substantial

and pay its owners, and increasing and the money

Full Tilt Poker developed between

shortfall

cash it had in its Full Tilt Poker Alderney 100% of was not

bank accounts was required Gambling money

it owed to players. the Channel

by its regulator, Commission

Islands-based

Control

("AGCC"), to keep, as cash,

owed to players. 100% of player

To hide the fact that the company deposits as cash

holding

and was in fact simply and pay the directed Full

using player company

funds to cover operating RAYMOND

expenses

owners

BITAR, the defendant,

Tilt Poker's

Director

of Finance on hand.

("CC-2") to inflate Specifically,

the amount

of the company's

"cash"

BITAR told CC-2

to count as company payment company processors and in many had stolen

"cash" over $100 million

that third party

owed to Full Tilt Poker but had never paid the cases never would because, the money or because for example, the

processor

the funds had been

seized pursuant 19. submitted claimed

to u.S. Court order. Acting at BITAR's financial direction, CC-2 routinely to the AGCC that

false monthly

certifications

the company

had far more cash on hand than it actually

11

did. For example, AGCC stating

CC-2 submitted

a financial

statement

to the cash

that Full Tilt Poker had $370,801,074 31, 2010, comfortably reported in excess

in ~total of the

held" as of August $322,472,894

the company

owing to players. financial

In truth and prepared

in fact - as reflected

by an internal

report

for CC-2 and BITAR - Full Tilt Poker had only approximately $124,342,485 of cash in its bank accounts at the end of August as cash to the actually owed

2010, over $200 million AGCC, and nearly

less than it had reported

$200 million

less than the company

to players. 20. keeping RAYMOND BITAR, the defendant, deposits money. was aware that

less than 100% of player the safety of player

as cash on hand on or about Full Tilt at

jeopardized March

For example,

15, 2008, during a recorded

conference

call with

Poker owners, least money

BITAR and CC-1 told the owners

that maintaining because

100% of player

funds in cash was essential

customer

that was in the hands of third party payment by the processors the March

processors

could be stolen Indeed, during

as it had been in the past. call, BITAR and CC-1 could take need to hold

15, 2008 conference

discussed action

the risk that the Department the company

of Justice

against

and the corresponding should

cash at the company action occur.

to repay players

law enforcement about such risks, cash

Notwithstanding

his discussions

BITAR allowed

Full Tilt to operate

with far less available

12

than was required Poker simply through false

to cover obligations concealed

to players,

and Full Tilt

and willfully statements

the truth about its finances

to the AGCC about its cash on hand. Player Deposits to offer "real money" on its ability and

Lies About

Ability 21.

To Collect

Full Tilt Poker's in the United

ability

internet

poker

States was dependent

to reliably distribute

collect

funds from U.S. player bank accounts seeking withdrawals.

funds to players BURTNICK unable

Throughout were reliably of United

2010, NELSON increasingly collect States

and RAYMOND

BITAR,

the defendants, who could

to find payment

processors

Full Tilt Poker deposits customers through

from the bank accounts checks.

electronic

On or about November such

9, 2010, deposits longer United

Full Tilt Poker lost the ability entirely, meaning, as a practical internet

to collect matter,

it could no in the

operate States.

a "real money" As of November

poker business

9, 2010, Full Tilt Poker owed its but had only approximately

customers

approximately

$344 million

$145 million 22. - an option

in all of the company Rather

bank accounts. its United states operations

than terminate likely

that would

have e~posed

the fact that Full accounts it

Tilt Poker was not holding and in fact was holding owed players concocted - RAYMOND

player

cash in "segregated"

as cash less than half of the money BITAR and NELSON BURTNICK,

the defendants, problems

a method

to temporarily

disguise

the company's

13

while reducing Specifically, States player website,

its ability

to pay its customers directed

still further.

BITAR and BURTNICK

that when a United Full Tilt Poker's and award

sought to deposit money

through

Full Tilt Poker would approve online gambling

the deposit account

credit to the player's were function~ng actually to do so. phantom

as if all systems

normally,

even though from'the

Full Tilt Poker had not player and had no ability and won or lost these Full

collected

the money

As United

States players totaling

gambled

funds - ultimately

over $130 million

Tilt Poker would account

list the phantom

funds on players'

online the funds

statements.

Full Tilt Poker did so even though or actually available

were never winning

in fact collected,

to pay the

players. 23. As a result balances of the above practice, the gap to players, had

between

the account

Full Tilt Poker reported of cash the company

on the one hand, and the amount available to pay players,

actually

on the other, widened 1, 2011, RAYMOND

still further. BITAR, the

In fact, on or about February defendant, received

a projection

from his financial

staff warning

that Full Tilt Poker would run out of all cash within months. Notwithstanding distributions this report, of approximately BITAR continued $10 million further to approve "profit"

per month

to himself the

and Full Tilt Poker's company's

other owners,

decreasing

cash on hand and its ability

to repay its customers.

14

24. precipitously department

Additionally, decreased,

even as Full Tilt Poker's customer stating

cash

Full Tilt Poker's

service

continued

to send form e-mails

that player

funds were held in "segregated" Additionally, statements example, press would secure Tilt the company

or "separate" to insist

accounts. in public For a "we

continued

that player

funds were "safe and secure." 12, 2010,

on or about November reviewed

Full Tilt Poker issued BITAR that stated funds are safe and " Indeed, Full

release

by defendant

RAYMOND

like to assure in their

all players

that their

Full Tilt Poker account. described itself

Poker consistently internet poker

as offering

"safe and

secure" posted

in its press releases

and in statements

on its website. The Scheme From Being Discovered 15, 2011, the Federal internet domain Bureau name its of

Lies To Prevent 25. Investigation pursuant United

On or about April seized

Full Tilt Poker's

to a Court order. operations

Full Tilt Poker then terminated drafted a "message

States

and promptly

to U.S.

customers," "Please

approved

by defendant

RAYMOND

BITAR,

that said

be assured

that your funds are safe, and we thank you for in our power to have your

your patience money returned 26. reached

while we do everything

to you as soon as possible." On or about April 20, 2011, Full Tilt Poker of Justice providing

an agreement

with the Department

15

that the company to United customers trying States

could immediately players.

return

all of the money

owed

Full Tilt Poker did not then repay its to U.S. customers" issued claimed it was 20,

as its "message

to do, and instead

a press release

on April

2011 asserting prevented

that "numerous repayment.

legal and jurisdictional

issues"

immediate

In truth and in fact, however, as BITAR

Full Tilt Poker knew, the player distributed financial company

could not return player money because, money had been spent by the company Full Tilt Poker's

and internal

to its owners. statements

Indeed,

reported

that as of March around

31, 2011 the

owed $390 million

to players

the world but had

less than $60 million 27. had available requests balance

in its bank accounts. cash that Full Tilt Poker stiil by the

Even the limited after April

15, 2011 was soon threatened the United States which

from players of their

outside

to withdraw

Full T~lt Poker accounts,

Full Tilt Poker of

had no ability

to pay.

Full Tilt Poker slowed down payments requests - falsely blaming the

there international delay in one press laundering checks"

withdrawal release

on "anti-fraud claimed

and anti-money - in

the company

to be conducting

order conceal Meanwhile, BITAR,

the fact that it simply was out of cash. of defendant the United RAYMOND States that

Full Tilt Poker, at the direction to encourage players outside

continued

to make new deposits

with the company

with the assurance

16

their money

would be safe. In a statement outside the United States

issued on April (and repeated in

15,

2011 to players substance

at various

times thereafter), action

Full Tilt Poker stated your ability to

the U.S. enforcement play safe and secure business as usual

"in no way affects

online poker

in your country .... It is to enjoy playing at

and we hope you continue

Full Tilt Poker." 28. deposits In fact, as defendant outside RAYMOND BITAR knew, new

from players

the United

States were not then accounts). on new

"safe and secure"

(much less protected

in "segregated"

As BITAR was aware, player deposits

Full Tilt Poker was entirely of player

dependent

to meet the backlog operating

withdrawal

requests on or to

and cover the company's

expenses. company

For example,

about June 10, 2011, CC-2 emailed BITAR showing deposits, that despite

financial per week"

reports

"8 to 9 million

from new

the company

only had only $2.1 million outstanding payments"

in "available

funds" and had "current million, withdrawal including

due of $29.1 player

$12.5 million CC-2's

to pay in "backlogged

requests." divided

e-mail noted that the available "'must pay' on both

cash was being invoices" fronts." continued receiving

"back and forth" between

and "withdrawals" All the while,

in order "to keep movement and defendant NELSON

BITAR

BURTNICK

to take a salary several million

from the company, dollars after April

collectively 15, 2011. In

17

effect,

Full Tilt Poker operated

what was, by then, nothing

more

than a Ponzi scheme. 29. conceal RAYMOND BITAR, the defendant, financial also sought to

the company's

worsening

condition

to prevent

the scheme

from being exposed.

For example,

on or about June 12, that

2011, BITAR e-mailed the company BITAR viewed possible

CC-1 and other Full Tilt Poker owners release containing

should not issue a press as bad news because

what "a "can't

doing

so would trigger

new run on the bank" run."

at a time when the company Similarly,

even take a 5 million to submit falsely money financial

Full Tilt Poker continued signed by CC-2, that

statements

to the AGCC,

claimed

that the company when,

had cash sufficient the company

to repay all

owed to players

in truth,

was essentially

insolvent.

The AGCC ultimately

concluded

that Full Tilt Poker's the to

representations company's operate

were false and, on June 29, 1011 suspended and halted Full Tilt Poker's ability

operations

in any jurisdiction.
Statutory Allegations

30. through District BURTNICK,

From at least on or about October

13, 2006,

up

and including

on or about June 29, 2011, in the Southern RAYMOND BITAR and NELSON known and unknown, confederate, and the

of New York and elsewhere, the defendants, together

with others conspire,

wi·llfully and knowingly agree together

did combine,

and with each other to commit

offenses

against

18

United

States,

to wit, violations 5363.

of Title 31, United

States

Code, Section 31. RAYMOND BITAR

It was a part and an object and NELSON BURTNICK,

of the conspiracy and others

that

the defendants,

known and unknown, in the business accept, unlawful

willfully

and knowingly,

with persons

engaged

of betting

and wagering,

would

and did knowingly person in

in connection internet

with the participation to wit, gambling and 225.05 Pokerstars

of another

gambling,

in violation

of New

York Penal Law Sections states where operated, behalf

225.00

and the laws of other and Absolute extended extended Poker to and on through and the of

Full Tilt Poker,

credit,

and the proceeds

of credit, credit

of such other person,

including

the use of a credit proceeds

card, and an electronic fund transfer

fund transfer

of an electronic

from and on behalf

such other person, which

and a check,

draft and similar

instrument and is drawn in

is drawn by and on behalf at and through 31 United

of such other person

on and payable violation

any financial

institution,

of Title

States Code, Sections
Acts

5363 and 5366.

Overt

32. the illegal

In furtherance thereof,

of said conspiracy RAYMOND

and to effect BURTNICK, the of

object

BITAR and NELSON

the defendants, following overt

and others

known and unknown,

committed

acts, among others,

in the Southern

District

New York and elsewhere: 19

a.

On or about January

18, 2007 BITAR

e-mailed

CC-1

and CC-2 that Full Tilt Poker should track which processors miscoded United States

of its payment so

credit card transactions to internet gambling.

that they would
b.

appear unrelated

In or around August for gambling

2007, Full Tilt Poker processed transactions under the name

credit

card payments

"PS3SHOP,"

using a non-gambling through District a credit

credit card code for the card network with headquarters in

transactions, the Southern c. received

of New York. 20, 2009, Full Tilt Poker located

On or about January transfer

an electronic

of funds from a gambler

in the Southern d.

District

of New York. 9, 2010, BURTNICK internet e-mailed a

On or about February

Full Tilt Poker colleague processing options

that the various

poker of

all involved including

"some form or another methods

'misrepresentation,'" e. colleagues processing "potential

used by rival Pokerstars. e-mailed payment and had

On or about November

9, 2010, BURTNICK

at Full Tilt Poker that the only available options left in the United

States were "crap"

legal repercussions." f. On or about January 11, 2011 a payment processor e-

mailed

BITAR and BURTNICK to be invested Full Tilt

to request

that Full Tilt Poker advance Bank in return for the

$1 million

in All American

bank processing

Poker transactions.

20

(Title 18, United

States
COUNT

Code, Section

371.)

TWO

(Unlawful

Internet

Gambling

Enforcement charges:

Act:

Full Tilt Poker)

The Grand Jury further 33. are repeated 34. Paragraphs and realleged

1 through

29 and 32 of this Indictment

as if fully set forth herein. 2006 up to and including District of New York

From in or about October

in or about April and elsewhere, persons persons engaged aiding

15, 2011, in the Southern BITAR and NELSON

RAYMOND

BURTNICK,

the defendants, and

in the business and abetting

of betting

and wagering

persons accept,

in the business in connection

of betting

and wagering, participation wit, gambling

did knowingly of another through

with the gambling, to

person

in unlawful

internet

Full Tilt Poker in violation and 225.05

of New York states

Penal Law Sections where Full Tilt extended extended

225.00

and the laws of other and the proceeds of

Poker operated,

credit,

credit, credit

to and on behalf through

of such other person, card, and an

including

the use of a credit and the proceeds

electronic transfer

fund transfer

of an electronic

fund

from and on behalf instrument

of such other person,

and a check, of any

draft and similar such other person financial

which was drawn by and on behalf at and through

and was drawn on and payable

institution. 18

(Title 31, United States Code, Sections 5363 and 5366; Title United States Code, Section 2). 21

COUNT

THREE

(Operation

of an Illegal

Gambling

Business:

Full Tilt Poker)

The Grand 35. are repeated 36. about April elsewhere, knowingly

Jury further

charges: 29 and 32 of this Indictment

Paragraphs and realleged

1 through

as if fully set forth herein. in or

From in or about 2004 up to and including District

15, 2011, in the Southern RAYMOND BITAR and NELSON finance,

of New York and the defendants, direct, namely in a and

BURTNICK,

did conduct,

manage, gambling

supervise, business, online

own all and part of an illegal business violation that engaged

in and facilitated

poker,

of New York State states

Penal Law Sections

225.00 and 225.05 operated, and

and the law of other which business financed,

in which the business

involved

five and more persons directed,

who conducted,

managed,

supervised,

and owned all and part in

of that business, substantially thirty

and which business operation revenues

had been and had remained in excess of

continuous

for a period of $2,000

days and had gross

in a single day, to the operation

wit, the defendants of Full Tilt Poker.

operated

and aided and abetted

(Title 18, United

States Code, Sections

1955 and 2.)

22

COUNT FOUR

(Conspiracy

to Defraud charges:

Banks)

The Grand Jury further 37. are repeated 38. including Paragraphs and rea1leged

1 through

29 and 32 of this Indictment

as if fully set forth herein.

From at least in or about 2006, up to and 15, 2011, in the Southern BITAR and NELSON District the of

on or about April

New York and elsewhere defendants, did combine, and others conspire,

RAYMOND

BURTNICK,

known and unknown, confederate,

willfully

and knowingly and with 18, United of Title

and agree together of Title

each other to commit bank fraud, States Code, Section States 39. RAYMOND

in violation

1344, and wire fraud, in violation Section 1343.

18, United

Code,

It was a part and an object of the conspiracy BURTNICK, the defendants, and others would to

that

BITAR and NELSON

known and unknown, did execute defraud insured

unlawfully,

willfully,

and knowingly

and

and attempt

to execute

a scheme and artifice of which

a financial

institution, Deposit credits,

the deposits Insurance assets,

were and to

by the Federal funds,

Corporation,

obtain monies, property financial

securities, and control

and other of that pretenses,

owned by and under institution

the custody

by means

of false and fraudulent in violation of Title

representations, States

and promises, 1344.

18, United

Code, Section

23

40. conspiracy defendants,

It was further

a part and an object BURTNICK,

of the the willfully, a scheme by

that RAYMOND and others having

BITAR and NELSON known and unknown,

unlawfully, to devise money

and knowingly, and artifice

devised

and intending

to defraud,

and for obtaining pretenses,

and property and

means of false and fraudulent promises, means would

representations,

and did transmit

and cause to be transmitted communication signals,

by

of wire,

radio, and televison writings,

in interstate pictures, and in

and foreign sounds

commerce,

signs,

for the purpose of Title

of executing

such scheme

and artifice,

violation

18, United

States Code, Section involving

1343, to wit, wire

the defendants communications financial

participated to deceive

in a scheme financial

institutions

and other payments

intermediaries

into processing Pokerstars

and authorizing and Absolute

to and from Full Tilt Poker, United States gamblers

Poker and to create and of,

by disguising

the transactions

the false appearance thereby to obtain

that they were unrelated

to gambling,

money of, or under the custody and intermediaries States Code, Section

and control

those financial

institutions

(Title 18, United

1349).

24

COUNTS

FIVE THROUGH

SEVEN Players)

(Wire Fraud Against The Grand Jury further 41. are repeated 42. through Paragraphs and realleged

charges: 29 and 32 of this Indictment

1 through

as if fully set forth herein. 19, 2008 up the and intending

From at least on or about March June 29, 2011, RAYMOND and knowingly, having

and including willfully a scheme

BITAR,

defendant, to devise money

devised

and artifice by means

to defraud,

and for obtaining pretenses,

and property

of false and fraudulent to wit, the making regarding

representations, representations funds deposited to entrust

and promises, to potential

of false the security of

customers

with Full Tilt Poker in order to induce

customers and

funds with the company,

would and did transmit radio,

cause to be transmitted communication signs,

by means of wire, and foreign

and televison writings, of executing States

in interstate pictures,

commerce,

signals,

and sounds

for the purpose of Title

such scheme

and artifice,

in violation

18, United

Code, Section sent or caused passed

1343, to wit, on or about the dates below BITAR to be sent the following commerce through wire transmissions, in which

in interstate

New York, New York, players:

furtherance

of the scheme

to defraud

25

COUNT FIVE

DATE OF WIRE July 18, 2008

TYPE OF WIRE Posting of message regarding separate player accounts on internet forum Transfer of $250,000 from Full Tilt Poker bank account to Raymond Bitar Transfer of $1,000,000 u.S. payment processor Tilt Poker from to Full

SIX

September

7, 2010

SEVEN

February

14, 2011

(Title 18, United

States Code, Section COUNT EIGHT

1343 and 2) .

(Money Laundering The Grand 43. are repeated 44. including

Conspiracy: charges:

Promotion)

Jury further

Paragraphs and realleged

1 through

29 and 32 of this Indictment

as if fully set forth herein.

From at least in or about 2006, up to and June 29, 2011, in the Southern RAYMOND BITAR and NELSON District the of

in or about

New York and elsewhere, defendants, did combine, and others conspire,

BURTNICK,

known and unknown, confederate Title

willfully

and knowingly and with

and agree together States

each other to violate 1956. 45. that RAYMOND others

18, United

Code, Sections

It was a part and an object BITAR and NELSON BURTNICK,

of said conspiracy and

the defendants,

known and unknown, and attempt

would and did transport, transmit,

transmit, a

transfer

to transport, 26

and transfer

monetary States

instrument

and funds to a place outside a place in the United

the United with intent to

from and through the carrying

States,

to promote

on of specified

unlawful

activity,

wit, the operation Poker, in violation 1956 (a) (2) (A) .

of Full Tilt Poker, of Title 18, United

Pokers tars and Absolute States Code, Section

(Title 18, United

States

Code, Section

1956{h)).

COUNT NINE

(Money Laundering

Conspiracy: charges:

Use Of Funds)

The Grand Jury further 46. are repeated 47. including Paragraphs and realleged

1 through

29 and 32 of this Indictment

as if fully set forth herein.

From at least in or about 2006, up to and in the Southern District the of

in or about June 29, 2011, RAYMOND

New York and elsewhere, defendants, did combine, each other 1957. 48. conspiracy defendants, place engage and others conspire,

BITAR and NELSON

BURTNICK,

known and unknown, confederate Title

willfully

and knowingly and with

and agree together States Code,

to violate

18, United

Sections

It was a further BITAR

a part and an object BURTNICK,

of the

that RAYMOND and others

and NELSON

the that took and did of

known and unknown, willfully

in an offense

in the United in monetary

States,

and knowingly

would

transactions

in criminally 27

derived

property

a value unlawful business Code,

greater

than $10,000

and which was derived of illegal

from specified gambling States

activity,

to wit, the operation in violation

Full Tilt Poker, 1957(a).

of Title

18, United

Section

(Title 18, United

States Code, Section
COUNT TEN

1956(h).)

(Unlawful

Internet

Gambling

Enforcement charges:

Act:

PokerStars)

The Grand 49.

Jury further

From in or about October

2006 up to and including District of New York engaged and did

in or about December and elsewhere, in the business abetting knowingly person persons accept, NELSON

2007, in the Southern BURTNICK,

the defendant,

a person

of betting

and wagering

and persons

aiding

in the business in connection internet

of betting

and wagering,

with the participation to wit, gambling

of another through 225.00 and

in unlawful

gambling,

PokerStars 225.05 credit,

in violation

of New York

Penal Law Sections PokerStars

and the laws of other states where and the proceeds of credit, credit

operated, of

extended extended

to and on behalf through

such other person, credit

including

the use of a of

card, and an electronic fund transfer

fund transfer

and the proceeds of such other

an electronic person,

from and on behalf

and a check,

draft and similar

instrument

which was drawn

by and on behalf payable

of such other person any financial 28

and was drawn on and institution.

at and through

(Title 31, United States Code, Sections 5363 and 5366; Title United States Code, Section 2).

18

COUNT ELEVEN (Operation of an Illegal Gambling Business: PokerStars)

The Grand 50. including

Jury further

charges:

From at least in or about 2005 up to and 2007, in the Southern BURTNICK, District of

in or about December NELSON

New York and elsewhere, and knowingly

the defendant, supervise, business, poker, 225.00

willfully direct,

did conduct,

finance,

manage, gambling

and own all and part of an illegal business violation that engaged

namely in

a

in and facilitated

online

of New York State Penal Law Sections in which

and 225.05 and

and the law of other states which business financed, involved

the business

operated,

five and more persons directed,

who conducted,

managed,

supervised,

and owned all and part in

of that business, substantially thirty

and which business operation revenues

had been and had remained in excess of

continuous

for a period of $2,000

days and had gross

in a single

day, to

wit, the defendants of Pokerstars.

operated

and aided and abetted

the operation

(Title 18, United FORFEITURE 51. alleged

States

Code, Sections

1955 and 2.)

ALLEGATION

AS TO COUNT THREE AND ELEVEN the gambling offenses

As a result

of committing

in Count

Three and Count Eleven 29

of this Indictment,

RAYMOND

BITAR and NELSON States,

BURTNICK,

the defendants,
§

shall

forfeit

to the United U.S.C.
§

pursuant

to 18 U.S.C.

981(a) (1) (C) and 28 that constitutes of these and,

2461, all property, from proceeds

real and personal, traceable

and is derived gambling pursuant

to the commission

offenses

with which they are respectively
§

charged,

to 18 U.S.C.

1955(d),

all property, offenses,

including

money,

used in committing traceable thereto, a. obtained businesses property Counts

these gambling including

and all property to the following: of proceeds

but not limited representing

A sum of money

the amount

as a result alleged

of operation

of the unlawful

gambling of

in Counts

Three and Eleven the gambling

and the amount alleged in

used in committing

offenses

Three and Eleven, (1) With

delineated respect

as follows: the operation in U.s. of

to Count Three,

Full Tilt Poker, currency;

at least approximately

$1 billion

(2) of PokerStars, currency; and b.

With

respect

to Count Eleven, $1.5 billion

the operation in U.s.

at least approximately

All of the defendants' entities (1) (2) (3)

right,

title,

and interest

in the following

and businesses:

Full Tilt Poker, Oldford Rational Group Ltd., Entertainment Enterprises Ltd.,

30

(4 )
(5 ) (6 ) (7 ) (8 ) (9 )

pyr Software Stelekram

Ltd.,

Ltd., Ltd. ,

Sphene International Tiltware LLC,

Kolyma Corporation Pocket Kings Ltd. ,

A.V.V.,

(10) Pocket Kings Consulting (11) Filco Ltd., (12) Vantage (13) Ranston Ltd., Ltd., Ltd., and

Ltd.,

(14) Mail Media

(15) Full Tilt Poker Ltd.; c. All of the defendants' right, title, and interest

in funds and other property accounts: (1) Bank, Dallas, Texas, account

held in the following

domestic

numbered

800801483

held at Comerica and all funds

in the name of Raymond

Bitar,

traceable

thereto; (2)

and account numbered 800922552 held at Comerica and all funds

Bank,

Dallas,

Texas,

in the name of Raymond

Bitar,

traceable

thereto; d. All of the defendants' right, title, and ~nterest

in funds and other property accounts:

held in the following

foreign

31

(1) Natwest, traceable Jersey,

account

numbered

60092074136054 Bitar,

held at

in the name of Raymond

and all funds

thereto; (2) account numbered 95434087766 Bitar, held at Natwest, and all funds

Channel

Islands,

in the name of Raymond

traceable

thereto; (3) account numbered 91707289 held at Bank of and all funds

Ireland, traceable

Ireland, thereto;

in the name of Raymond

Bitar,

(4) of Scotland Ireland,

account

numbered

99045014745206

held at Bank Bitar,

Inc., Ireland, thereto; numbered

in the name of Raymond

and all funds traceable (5) National Irish Bank,

account

95151380025186

held at Bitar, and

Ireland, thereto; account

in the name of Raymond

all funds traceable (6) National Irish Bank,

numbered

95151340062618

held at Bitar, and

Ireland, thereto; account

in the name of Raymond

all funds traceable (7) Irish Bank, traceable Ireland,

numbered

26257031

held at Allied and all funds

in the name of Raymond

Bitar,

thereto; (8) account numbered 7262 held at Wirecard Bitar, and all funds Bank

AG, Germany, traceable

in the name of Raymond and

thereto;

32

(9) AG, Germany, traceable

account

numbered

7244 held at Wirecard Bitar, and all funds

Bank

in the name of Raymond

thereto; e.AII of the defendants' property: (1) all that lot or parcel improvements, of land, together fixtures, with right, title, and interest

in the following

its buildings, and easements, California,

appurtenances, located

attachments

at 1506 Forest Oaks Drive,

Glendora,

91741; and (2) all that lot or parcel improvements, Drive, of land, together fixtures, Glendora, with

its buildings, and easements, California,

appurtenances, located

attachments

at 752 Rainbow

91741.
FORFEITURE ALLEGATION AS TO COUNT FOUR

52. conspiring Indictment, shall

As a result

of committing

the offense in Count

of Four of this

to commit bank RAYMOND

fraud as alleged

BITAR and NELSON

BURTNICK,

the defendants,
§§

forfeit

to the United

States, pursuant
§

to 18 U.S.C.

981 (a) (1) (C) and 982, and 28 U.S.C. constituting indirectly including title, or derived as a result

2461, all property obtained alleged directly in Count and Four,

from proceeds of the offense

but not limited

to, all of the defendants' and property by reference

right, in

and interest 52, which

in the accounts are incorporated

described herein.

paragraph

33

FORFEITURE 53.

ALLEGATION As a result in Counts BITAR,

AS TO COUNTS of committing

FIVE, SIX AND SEVEN the offense of wire

fraud as alleged Indictment, United

Five, Six and Seven of this the defendant, shall forfeit
§

RAYMOND

to the

States,

pursuant
§

to pursuan~

to 18 U.S.C. constituting

981(a) (1) (C) from

and 28 U.S.C. proceeds offenses limited

2461, 'all property directly in Counts

or derived

obtained alleged

and indirectly Five through

as a result

of the but not

Seven,

including

to, at least approximately right,

$41 million title,

in U.S. currency, in the (d) and (e),

and all of the defendants' accounts which and property

and interest 52(c),

described

in paragraph herein.

are incorporated FORFEITURE 54.

by reference

ALLEGATION

AS TO COUNTS EIGHT AND NINE the offense of Eight

As a result

of committing laundering RAYMOND

conspiring

to commit money

as alleged

in Counts

and Nine of this Indictment, the defendants, 18 U.S.C.
§

BITAR and NELSON States,

BURTNICK, to

shall forfeit

to the United

pursuant

982(a) (1), all property, alleged

real and personal, and all property

involved traceable

in the offenses to such property, a. States

in Count Nine,

including

but not limited

to the following: in United

A sum of money

of at least $2.5 billion

currency. b. All of the defendants' businesses, right, title, described and interest in paragraph

in the entities,

and accounts

34

52(b)

I

(c)

I

(d)

I

and

(e) which are incorporated

by reference

herein. Substitute 55. paragraphs omission Assets Provision property described in

If any of the forfeitable 54 above
I

51 through

as a result

of any act or

of the defendants: a. cannot be located upon the exercise diligence; b. has been transferred with c.
l

of due

or sold

tOI

or deposited

a third person; the jurisdiction of the

has been placed beyond Court;

d. e.

has been substantially has been commingled cannot be subdivided

diminished

in value;

or

with other property without
l

which

difficulty; to 18 U.S.C.
§

it is the intent

of the United
§

States

pursuant

982(b) and 21 U.S.C. property

853(p)

I

to seek forfeiture

of any other

of said defendant property.

up to the value

of the above

forfeitable

(Title 181 united States Code Sections 9811 9821 and 1955; Title 211 United States Code Section 853; Title 281 United States Code Section 2461.)
I l I

PREET BHARARA United States Attorney 35

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

UNITED STATES OF AMERICA
-v-

RAYMOND BITAR,
and

NELSON BURTNICK
Defendants.

INDICTMENT S8 10 Cr. 336 (18 U.S.C.
§§

(LAK)

371, 1343, 1349, 1955, 1956 (h)rand 2.)
PREET BHARARA

United

States Attorney.

A

TRUE BILL Foreperson.