After a long day, wrought with surprises,about 5 hours behind schedule at nearly 5 p.m. today,Bitar entered the courtroom alongside his defense attorney, John “Jack” Baughman, of Paul, Weiss, Rifkind, Wharton & Garrison LLP, who accompanied him from Dublin.
At some prior time it was arranged between the parties that Bitar would advise SDNY of his flight plans, that he would be met by federal agents when he landed in New York earlier today, and that he would surrender and be taken into custody, and be immediately transported to the courthouse for arraignment. That plan however, changed a bit when the agents actually boarded the plane in New York to arrest Bitar with a new superceding indictment and additional charges in hand.
Appearing before Magistrate Judge Debra Freeman, Bitar waived the reading of the full indictment (having already been advised of it’s content), and pled not guilty to all charges.
Suprisingly, despite negotiations with the U.S.A.O., Bitar made the decision to come back to the U.S. to answer to the charges having no firm deal in place. The date he chose to make the move is said to coincide with his confidence that the pending deal that the USAO is negotiating with PokerStars is nearing completion.
Despite a recommendation from Pre-trial services that Bitar receive bail in the US with a $250K bond and some restrictions, Assistant U.S. Attorney Arlo Devlin-Brown asked that the court remand Bitar instead, and deny bail completely. Devlin-Brown made the argument to the judge that there was no amount of money that could sufficiently guarantee that the defendant would not flee. He also pointed out that while the original and prior superceding indictments left all defendants with a sense of merely facing a year or two in jail if convicted, the new charges now facing Bitar could conceivably result in decades of incarceration. Therefore, Devlin-Brown argued, even though he came in voluntarily now, his feelings could change, causing him to flee. Devlin-Brown did not miss an opportunity to mention to Judge Freeman that alleged acts committed by Bitar and Full Tilt fit the definition of a “Ponzi” scheme.
The new indictment naming Bitar (and possibly others) was broken down in short by Devlin-Brown for the court:
1. Conspiracy violations of UIGEA
2. Violations of UIGEA
3. Operating an Illegal Gambling Business (IGBA)
4. Bank and Wire fraud
5-7* Wire Fraud charges connected to the missing funds not able to be repaid to the players of Full Tilt Poker.
8. Money Laundering
9* Money Laundering in connection with missing player funds.
*(5-7 and 9 are the only new counts in the superceding indictment.All others were charges Bitar was facing prior to his surrender.)
Defense attorney Roberto Finzi pointed out to the judge that Devlin-Brown’s argument was flawed because, despite numerous requests by the defense to the USAO that they guarantee no additional charges against Bitar were in the works, the USAO refused to do so, for weeks, and Bitar agree to surrender anyway.
After taking a short break, the Judge returned to rule that Bitar will be entitled to bail. The bond value will increase though, from $ 250K to $ 2.4M, $ 1million of which must be secured in cash. She approved up to 5 cosigners. A surrender of his passport (this already happened) and travel limitations are also included bail structure. It is expected those cosignors would include those friends and family of Bitar who were in the courtroom including his mother, his brother and sister (both of which have a history of working at Full Tilt) and friends and spouses, the same friends and family that paced the corridors for hours waiting for the arraignment to happen. The defense asked that Bitar be allowed out on bail for one week while they tried to raise the additional amount necessary, the USAO argued against that. The judge ruled that Bitar will remain incarcerated until the new bail requirements are met.
Bitar had pre-prepared a statement for the media explaining his decision to surrender:
Today, I returned voluntarily to the U.S. from Full Tilt’s headquarters in Ireland to face the charges against me. I know that a lot of people are very angry at me. I understand why. Full Tilt should never have gotten into a position where it could not repay player funds. for the last 15 months, I have worked hard on possible solutions to get the players repaid. Returning today is part of that process. I believe we are near the end of a very long road, and I will continue to do whatever is required to get the players repaid. I hope that will happen soon.
It’s estimated that Full Tilt poker still owes it’s players over $330 million that the company was unable to pay when it was shut down. Finally, 15 months after Black Friday, it’s widely hoped that their players will be repaid as part of a settlement agreement that PokerStars, another company named in the complaint, is negotiating with the U.S.A.O.
Jack Baughman offered the following statement about his clients appearance today:
This morning, Ray Bitar voluntarily surrendered to U.S. authorities in order to face charges relating to the internet poker company Full Tilt Poker. we had previously informed the United States Attorney’s Office and the Federal Bureau of Investigation that Ray and I would be arriving at J.F.K. on a flight from Europe, and Ray’s surrender took place at the airport in my presence and without incident.
Since last April, Mr. Bitar has been in Ireland, where he has continued to act as full Tilt’s CEO, a position he still holds. As has been widely reported, when Full Tilt’s operations were shut down last year, it was not able to refund money it was holding in players accounts. Through the company, Mr Bitar has been working to get Full Tilt’s players repaid. Arranging for those repayments has been, and remains his top priority.
we thank the United States Attorneys office for it’s courtesy and assistance in coordinating Mr. Bitar’s surrender. We hope that we will be able to resolve Mr. Bitar’s remaining legal issues in a way that is satisfying to all parties.
Both statements were prepared before the additional charges were unsealed, but when I asked Jack Baughman if he wanted to add anything, he confirmed that both statements were still valid.
One interesting side-note: While it’s not unusual for an arraignment to take place in magistrate court, there will be an interesting question facing Judge Lewis Kaplan. Kaplan is the judge that has been handling the Black Friday criminal case since its unsealing in 2011. Today, with attorneys from Paul,Weiss,Rifkind, Wharton & Garrison LLP representing Bitar, Kaplan may now have to make a decision. Apparently it’s been his policy in the past to recuse himself from sitting on the bench for any case handled by that firm. Reason: Kaplan worked at the same firm for a very long time. Surely this will come up next Monday when a pre-trial conference is already scheduled.
Bitar is one of 11 men named in the criminal indictment unsealed on April 15, 2011; five of those named defendants still remain fugitives.