As already reported on Monday, Ray Bitar, CEO of Full Tilt Poker, surrendered to federal authorities in New York on July 2, 2012. During his arraignment before Magistrate Judge Debra Freeman, he pled not-guilty to all charges, including those new charges unsealed in the superseding indictment, and his family and friends were present to help with bail as had been recommended by Pre-trial services. The government asked for detention and that any amount of bail be denied for Bitar, because they felt that “there is no condition or combination of conditions that will reasonably assure the defendant’s appearance in court”.
After Judge Freeman had time to consider arguments for bail from both sides, she returned to the bench increasing the proposed bail package from $250,000. to $ 2.4 million, a minimum of $1 million which must be secured in cash. While family and friends were available to post for the smaller expected bail package, the defense admitted that it may take at least another week or two for the additional funds to be gathered, along with the appropriate deeds for real estate and other property to meet the $ 2.4 million value necessary. While the defense asked that Bitar temporarily be freed based on the smaller amount and that he be granted immediate consideration with a limit of two weeks to collect the rest, the government argued against this and the court ordered that Bitar be remanded until at least such time that the bond be fully available, assuming that that would not likely happen before July 9 when a conference can be scheduled before Judge Kaplan, who has been overseeing the criminal case since Black Friday. The government suggested that it may have plans to appeal and requested that even if bail conditions could be satisfied before July 9, that the order be stayed and they be given the opportunity to file that appeal.
Today the parties appeared again in court before Judge Paul Engelmayer. The defense was prepared to provide proof that bail conditions could indeed be met immediately,which they did, and it was accepted by the court.The government has now filed it’s appeal, looking to deny bail at any level, keeping Bitar in custody pending trial.
The government’s memorandum in support of pretrial detention set forth several allegations, some that have never been seen in public before. For example:
- Bitar had routinely returned to the U.S. for visits during the years since moving to Dublin. He allegedly had a trip planned to the U.S. in early 2011, but changed those plans and has not returned since. The memo says the government assumes that Bitar feared that an indictment may be imminent based on conversations the government had with Full Tilt company counsel in late 2010, causing him to cancel his flight.
- Bitar not only did not step down as CEO following the Black Friday civil and criminal charges, he, along with other allies, fought off an attempt by some shareholders to replace him on the Board of Directors, allegedly stating that his role was too “critical” and that remaining in his current position would be vital to finding and raising funds from potential investors that could ultimately take controlling interest in the company.
- Bitar continued to operate the company in order to keep the “ponzi scheme from unraveling”. After April 15, while players in the U.S. had not been repaid any part of the ~ $150 million locked up in their player accounts, the government alleges that Bitar allowed some of the small amount that Full Tilt had left in available cash to be withdrawn by non-U.S. customers, while continuing to accept deposits from those “rest of world” customers promising those deposits were “safe”.
- Even after the license regulator, Alderney Gambling Control Commission, (A.G.C.C.), pulled the plug and forced Full Tilt to cease operations on June 29, 2011, Bitar continued as CEO claiming his presence was essential to get any deal done that could repay the company’s player base. The government also asserts that Bitar received over $2 million in salary between April 15, 2011 and when he surrendered.
In their memo to support denial of bail, the government also points out that the new charges that Bitar faces (various fraud charges against the players, unsealed and presented upon his landing in the U.S.) carry such a significant upward departure in federal sentencing guidelines, that Bitar, now possibly facing life in prison, has all the more reason to flee, even though he has only just arrived.
The memo advises the court that although Bitar admitted to have access to approximately $ 2.5 million personally, the government further alleges that earlier this year Bitar tried to gain access to a foreign bank account in his own name containing over $24 million of which the government had no control over. It’s unclear how access was not granted to that account by either Bitar or the government, or exactly what happened, but the memo used this as an example of possible monies being available to Bitar offshore that could be used if he were to flee while on bail.
There were lengthy arguments today by both sides regarding the granting of bail. In the end, Judge Engelmayer seemed to say he did not view this as a detention case, which was in keeping with the view of Judge Freeman when she originally set bail. However, Judge Engelmayer did agree to stay the bail pending the government’s appeal being heard in front of Judge Kaplan, likely sometime next week. Therefore, for the weekend, at least, Bitar will remain in custody.