Potential Full Tilt buyer, DOJ moving on sale deal

November 18, 2011 - 4:10 PM

LAS VEGAS (AP) — A French investment group hoping to buy an online poker operator dogged with legal troubles in the United States has a preliminary agreement with prosecutors that would broker a sale and help gamblers get their money back.

Benham Dayanim, a lawyer for Groupe Bernard Tapie, told The Associated Press on Friday that he received a signed letter of agreement Thursday from the U.S. attorney's office in New York that could broker Full Tilt Poker's sale.

A spokeswoman for the prosecutor's office declined to comment.

"It's the first step in a process," Dayanim told the AP. "What it provides is that if the Full Tilt companies agree to forfeit their assets to the United States, the United States will sell those assets to Groupe Bernard Tapie."

The next steps will be for Full Tilt to agree, then for the Tapie group to negotiate a final agreement with the Justice Department, Dayanim said.

"There's nothing tremendously fixed in stone," he said.

Jeff Ifrah, a lawyer for Full Tilt CEO Raymond Bitar, said the letter of agreement helps pave the way toward restarting Full Tilt's operations outside the U.S. and paying back players whose deposits were frozen along with Full Tilt's assets.

"For that reason, I think there's a lot to be optimistic about here," Ifrah said.

Ifrah said the group would pay $80 million for Full Tilt under the deal.

The Tapie group would pay players outside the U.S., while Americans who gambled at the site would send claims to the Justice Department. Current investors with stakes in Full Tilt would not be allowed to have a stake in the new company.

"I'm optimistic that this deal will go forward," Dayanim said. "This deal offers the surest path toward compensation for players and toward restarting the site as a European-facing poker site."

Gambling regulators on the British Channel Island of Alderney revoked Full Tilt's gambling license in September, saying the company had severe financial problems including bogus accounting, unauthorized loans and a failure to report significant material events.

A week earlier, U.S. Attorney Preet Bharara said Full Tilt was running a Ponzi scheme, an allegation the company said is untrue.

Prosecutors said that in March, Full Tilt had $60 million in funds to cover $390 million in player balances and had used $444 million to pay company executives and board members, including several well-known poker professionals.

Ifrah said that part of the challenge in finding a buyer for Full Tilt was finding investors willing to sit down with prosecutors who also had deep enough pockets to buy the company and reimburse players.

"It's been too long for everybody — not just the players but from the investors perspective," Ifrah said. "There's a huge risk that Tapie's taking in relaunching this site, and obviously we want that to be very successful. But first and foremost, we want to make sure that no player's being left behind here."

Full Tilt's operations in the United States have been shut down since April, when an indictment against executives and others associated with Full Tilt, Poker Stars and Absolute Poker accused them of fraud, money laundering and tricking banks into illegally processing funds for online gambling in defiance of a 2006 law that prohibits the transactions.

It wasn't immediately clear whether Tapie's personal history might affect his ability to obtain a gambling license. Gambling regulators investigate potential licensees, though commissions in different jurisdictions vary in how strict they are on background checks.

Tapie, a former government minister, sports tycoon and actor, served six months in prison in 1997 after being convicted of bribing soccer players to throw a 1993 match against Olympique Marseille, a team he owned. He was also convicted of fraud for deliberately misleading authorities about a luxury yacht.

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Oskar Garcia can be reached at http://twitter.com/oskargarcia .