Black Friday Redux: Guernsey Ships Laundered Bitar Bux Back to US

Updated: December 12th, 2017 by Dev Ops

Here’s one of those wrapping-up-a-loose-end tales from the “Black Friday” online-poker saga: The Island of Guernsey, a British dependency widely known as an international banking haven, has returned more than $13 million to the United States’ Department of Justice that was seized several years back from an a Guernsey bank account owned by former Full Tilt Poker CEO Ray Bitar.

Bitar, if you remember, was one of the 11 individual defendants charged in the Black Friday case, along with major US-facing online sites Full Tilt Poker, PokerStars and Absolute Poker (which also included Those sites were forced to cease offering services to US players in April of 2011, when the Black Friday indictments were unsealed. With the notable exception of PokerStars, all the other sites folded soon after, and in Full Tilt’s case, it turned out that the owners’ had absconded with nearly all of the players’ money through a series of illicit ownership disbursements.

FTP crime boys Ray Bitar (left) and Howard Lederer.

Bitar and fellow Full Tilt Poker execs Howard Lederer and Chris Ferguson were the largest beneficiaries of this self-granted largesse. All three eventual reached plea deals with US authorities; each paid substantially reduced settlements compared to the $40 million or so the DOJ sought from each of the three, and each also avoided significant jail time.

The settlements did little to dissuade public belief that they and other primary Full Tilt Poker (FTP) owners had collectively laundered away hundreds of millions of dollars of stolen player deposits, and this news from Guernsey supports that. Top Guernsey officials announced the transfer of the Bitar funds on Friday, during a meeting with DOJ officials in Washington D.C.

It turns out the seized funds were identified by US investigators in 2011 or 2012, when the first of three seizure requests was made to Guernsey. Those funds were indeed seized but remained in limbo for several years, while a separate asset-dealing between Guernsey and the US was finalized. Under terms of the deal, the two jurisdictions split equally any funds which are seized in connection with a case touching both jurisdiction. This is the first time Guernsey has sent seized money the US’s way, though the US has sent smaller amounts to Guernsey on five separate occasions.

The seized funds made up roughly 90% of the asset-transfer announced on Friday; the remainder came from the seized proceeds of an American drug dealer who also liked doing his banking in Guernsey. The fact that proceeds were equally split also means that the total sequestered by Bitar in the Guernsey bank account was somewhere north of $26 million, and it may indeed represent the majority of Bitar’s laundered funds.

Here’s the complete press release about the transfer, courtesy of the Island of Guernsey:

. . . . . .

Guernsey Law Officers announce first-time forfeited asset sharing with the United States

Guernsey has today announced during a visit to the Department of Justice in Washington D.C. that it will share with the United States government approximately $14.3 million recovered while assisting U.S. prosecutors and investigators with two U.S. criminal cases in which money was laundered via Guernsey.

The $14.3 million represents one half of the net proceeds recovered in Guernsey, stemming from the two U.S. criminal cases. The other half of the confiscated assets will be retained by Guernsey under the US/Guernsey Asset Sharing Agreement made in 2015 between the respective governments.

Guernsey Attorney General (H.M. Procureur) Megan M.E. Pullum, Q.C., and Solicitor General (H.M. Comptroller) Robert M. Titterington, Q.C., made the announcement during a visit with officials of the Department of Justice’s Criminal Division.

H.M Procureur Megan Pullum Q.C. said:

“This case illustrates the dedication and persistence of Guernsey law enforcement authorities in working with overseas authorities and in successfully bringing a case to conclusion despite the process taking several years. It is an excellent example of successfully tracing and identifying proceeds of crime across jurisdictions and of repatriating such proceeds. Guernsey has an ongoing and exemplary commitment to international co-operation and mutual legal assistance and we are therefore extremely pleased to announce this asset share.”

M. Kendall Day, Acting Deputy Assistant Attorney General, said:

“We are delighted that your many years of work on our behalf on these two cases is now resulting in the first-ever asset sharing from Guernsey to the United States, and also the second asset sharing to take place under the new permanent sharing agreement we signed together in 2015.”

Acting Deputy Assistant Attorney General Day was joined by Deborah L. Connor, Acting Chief of the Department’s Money Laundering and Asset Recovery Section, which administers the Department of Justice’s international asset sharing program.

The Department of the Treasury shared more than $2 million with Guernsey in 2016 in the first use of the permanent sharing agreement. The Department of Justice and the Department of the Treasury together have shared a combined total of $2.56 million with Guernsey in five cases since 1994. The permanent sharing agreement, in force since February 2015, created a more direct and efficient process for sharing assets between Guernsey and the United States.

Guernsey, as a significant offshore financial centre, has long been a reliable partner with the United States in the areas of anti-money laundering and forfeiture cooperation.

Most of the funds being transferred from Guernsey – approximately $14.3 million – stem from Guernsey’s cooperation in connection with the prosecution of defendant Raymond Bitar and his associates by the United States Attorney for the Southern District of New York. Because the FBI is the seizing agency in the case, the shared funds will be deposited into the Department of Justice Assets Forfeiture Fund.

In April 2013, Raymond Bitar pleaded guilty to unlawful internet gambling and conspiracy to commit bank fraud and wire fraud. He admitted to defrauding customers of his Full Tilt Poker operation by lying to them about the security of their funds held by Full Tilt Poker, and by falsely promising players that their funds would be protected in segregated accounts. Instead, Bitar and his accomplices used players’ funds for whatever purposes that Bitar directed, including to pay him and others millions of dollars and to cover the operating expenses of Full Tilt Poker. Ultimately, Full Tilt operated what was nothing more than a pyramid scheme. When it collapsed, Full Tilt was unable to pay players approximately $350 million that it owed to them. In connection with his plea and sentencing, Bitar agreed to forfeit $40 million dollars in money and other property derived from his offenses.

Between November 2012 and June 2015, U.S. prosecutors sent a series of three Mutual Legal Assistance requests to the Guernsey authorities seeking their assistance with the tracing, restraint, forfeiture and recovery of those laundered proceeds. In response to those requests, the Guernsey authorities restrained relevant bank accounts, provided bank records that facilitated the U.S. investigation and forfeiture, and ultimately gave effect to the final U.S. judgment of forfeiture and liquidated the accounts.

The remaining funds to be shared by Guernsey – totalling about $1.17 million – stemmed from the prosecution of defendant Paul Hindelang and his associates by the United States Attorney for the Southern District of Florida. Hindelang was a large-scale importer of Colombian marijuana into the United States during the 1970s and 1980s. Similar to the Bitar case, Guernsey’s assistance in connection the Hindelang case ultimately included the registration and enforcement of a U.S. judgment of forfeiture against assets that were laundered via Guernsey and the liquidation of those assets.

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