Howard Lederer, shareholder and Board of Directors Member of Tiltware LLC, and one of the faces of the original Full Tilt Poker online poker site, has settled his civil case with the U.S. Attorneys Office, Southern District of New York.
Lederer was named, along with the other “FTP Insiders” (board members) in September 2011 in an amended civil complaint following the Black Friday charges against the company. He was charged with civil forfeiture claims based on illegal gambling business proceeds, conspiracy to commit bank fraud and wire fraud, and conspiracy to commit money laundering. A further superseding amended complaint was filed against Lederer in September of 2012, reiterating the previous claims, adding claims that Lederer and the other Board members defrauded the players out of more than $ 330 million (not having account balances available), making misrepresentations to the FTP regulator, misrepresenting that player funds were “safe and secure” both before and after Black Friday, covering up those misrepresentations and violations of the Travel Act.
During his tenure as a Board Member, Lederer collected more than $ 42 million in distributions and profit sharing. (This does not include salary or other payments also made to Lederer over the years). The second amended complaint asked the court that a money judgment of $ 42.5 million be entered against Lederer. Lederer denied the charges, made a motion to dismiss all charges and made claims for all property related in the complaints.
This week, in a settlement, the numbers appear to be much less.
As part of the settlement, Lederer contends that Full Tilt Poker was a legitimate business, and prior to April 15, 2011, he was unaware any any wrongdoing, including that the company was unable to satisfy its player account liability. He further admits no wrongdoing. Lederer also agrees to forfeit the following property:
- All funds in the Lloyds TSB International account (#…402) in Isle of Man (amount not stated). This was one of the accounts cited in the original complaint.
- All funds in the LPL Financial Accounts (where Lederer set up his retirement account with FTP funds)
- A 1965 Shelby Cobra automobile
- His property at 309 Kingsclear Court in Las Vegas
- $ 30,000. representing proceeds traceable to the sale of the 5426 Fawn Chase Way property
- All proceeds traceable to the sale of the 2735 Twin Palms Circle property, less any outstanding mortgage amount owed, provided that the Twin Palms property is sold within 120 days from the entry of this Stipulation and Order of Settlement for a price not less than $440,000. Alternatively, if the Twin Palms Property is not sold during that time period for an amount not less than $440,000, the Twins Palm Property itself shall be forfeited to the United States (collectively, the “Forfeited Property”). Lederer agrees to take all necessary steps to facilitate the immediate transfer of the Forfeited Property to the U.S. Marshals Service.
- Also Lederer agrees to immediately liquidate all funds and other assets in his remaining accounts at Lloyds, which (not including the Lloyds 0402 Account) have a current total approximate U.S. dollar value of $168,000 (the “Liquidated Funds”).
- Lederer agrees to the entry of a civil money laundering penalty judgment in the amount of $1.25 million (the “Additional Funds”) , plus the Liquidated Funds (together, the “Money Judgment 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. Within three days of the liquidation of the Liquidated Funds, Lederer shall pay to the United States the full value of the Liquidated Funds. Within three days of the entry of this Stipulation and Order of Settlement, Lederer shall execute a promissory note for the Additional Funds (the “Note”). The Note shall specify that $500,000 of the Additional Funds shall be due no later than 18 months from the date of the entry of this Stipulation and Order of Settlement and that the remaining $750,000 shall be due no later than 36 months from the date of the entry of this Stipulation and Order of Settlement. The Note shall be secured by the Skybird Property and the Hawk Ridge Property. The Note shall specify, and it is hereby ordered, that if either or both of those properties is sold within 36 months of the date of the entry of this Stipulation and Order of Settlement, the entire $1.25 million shall be due and owning immediately upon such sale.
Lederer further agrees not to work for, or derive money from, either directly or indirectly, through the operation of any internet gambling business in the united States, including businesses offering internet poker in the United States, until if and when a change in applicable law takes place making the offering of such gambling lawful in the United States and Lederer, or whatever entity with which he is affiliated, obtains appropriate authorization from all relevant governmental regulatory authorities.
In addition to the above, and besides a monetary judgment of $ 42.5 million, the government had requested that Lederer’s primary residence on Hawk Ridge Drive and the guest house on Skybird Court in Las Vegas be forfeited, along with three bank accounts at Wells Fargo Bank, another property in California and various other automobiles. According to the second amended complaint more than $ 42 million of funds originating from FTP companies moved from the Lederer Consulting account at Wells Fargo to another Wells Fargo personal account in the name of Howard and Susan Lederer. None of these however were part of the final civil settlement agreement.
Chris Ferguson had joined in Lederer’s motion(s) to dismiss following the second amended complaint being filed. Ferguson has not yet settled his civil case, but according to documents, negotiations for such a settlement are ongoing and, with Lederer having settled, Ferguson’s motion to dismiss is now a stand-alone motion. The government has until January 28, 2013 to respond to the motion and Ferguson will have until February 18, 2013 to file any replies. Rafe Furst settled his case with SDNY last month. The case against Ray Bitar is still pending.
Sources say that Lederer and his wife hosted a Holiday party last night for approximately 150 people at the palatial mansion he managed to keep post settlement.