According to a Stipulation and Order of Settlement filed on Tuesday, former Full Tilt Poker board member Howard Lederer has settled his civil case with the Southern District New York.
Lederer was one of four Full Tilt Poker board of directors named in a September 2011 Amended Civil Complaint in which the Government sought the forfeiture of $42.5 million paid by the company to Lederer. The U.S. Attorney's Office alleged that Full Tilt Poker operated as a "massive Ponzi scheme," and claimed that the board defrauded the players out of more than $330 million.
In September of this year, Lederer and the other board members were named in a Second Amended Civil Complaint, introducing new forfeiture charges including the purchase of assets with “illegal proceeds.” The Second Amended Complaint gave a detailed account of Lederer’s expenditures from the end of 2006 up until September 2011, and provided records indicating that Lederer used illegal funds for retirement funds, mortgage payments, property taxes and to purchase numerous vehicles.
Since all of the expenditures listed could be traced back to the illegal Full Tilt Poker enterprise, the Government sought the forfeiture of $42.5 million from Lederer. Lederer denied the charges and filed a motion to dismiss on Nov. 15, 2012.
Lederer agreed to settle with the SDNY on Dec. 18. Under the agreement, Lederer contends that Full Tilt Poker was a "legitimate business providing services to its customers within the bounds of the law, and that prior to April 15, 2011, he was unaware of any wrongful activity at Full Tilt including that the company had become unable to satisfy its player account liabilities." He also admits no wrong doing in the matter.
The following property will be forfeited as part of the settlement:
- Lederer's 1965 Shelby Cobra roadster
- All funds in Lederer's account at Lloyds TSB International, Isle of Mann, and all funds traceable thereto. Lederer also agrees to immediately liquidate all funds and other assets in his remaining accounts at Lloyds, which have a total approximate U.S. dollar value of $168,000
- Accounts in the name, of or belonging to, Howard Lederer at LPL Financial, including the Lederer's 401K Profit Sharing Plan & Trust accounts
- All proceeds traceable to the sale of Lederer's property located at 2735 Twin Palms Circle, Las Vegas, Nevada, 89117
- $30,000 representing proceeds traceable to the sale of the property at 5426 Fawn Chase Way, Las Vegas, Nevada, 89135
- Lederer's property located at 309 Kingsclear Court, Las Vegas, Nevada 89145
Lederer also agreed to the entry of a civil money laundering penalty judgment in the amount of $1.25 million, plus the liquidated funds, and to the "forfeiture of the Money Judgment Funds for disposition according to law, pursuant to Title 18, United States Code, Section 981, without admitting any liability thereunder." The settlement document states that additional funds will be due no later than 18 months from the date of the entry of the Stipulation and Order of Settlement, and that the remaining $750,000 shall be due no later than 36 months from the date of the document's entry.
In the Second Amended Complaint, the government requested the forfeiture of Lederer's Las Vegas properties at 99 Hawk Ridge Drive and 55 Skybird Court, as well as a property in California; three bank accounts at Wells Fargo; and a number of vehicles. However, none of those properties were mentioned in the settlement.
Lederer joins [Rafe First as the only Full Tilt Poker board members to settle their respective civil cases. Chris Ferguson is in settlement negotiations with the government involving his civil case, and Ray Bitar's case is still pending.