Unites States v. Pokerstars, et al

Filing 102

ANSWER to 53 Amended Complaint,,,,,., COUNTERCLAIM against United States Of America. Document filed by Steve Segal.(Burt, Thomas)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
- - -x
UNITED STATES OF AMERICA,
Plaintiff,
-

V.

-

POKERSTARS; FULL TILT POKER;
ABSOLUTE POKER; ULTIMATE BET;
OLDFORD GROUP LTD.; RATIONAL
ENTERTAINMENT ENTERPRISES LTD.;
PYR SOFTWARE LTD.; STELEKRAM LTD.;
SPHENE INTERNATIONAL LTD.;
TILTWARE LLC; KOLYMA CORPORATION
A.V.V.; POCKET KINGS LTD.; POCKET
KINGS CONSULTING LTD.; FILCO LTD.;
VANTAGE LTD.; RANSTON LTD.; MAIL
MEDIA LTD.; FULL TILT POKER LTD.;
SGS SYSTEMS INC.; TRUST SERVICES
LTD; FIDUCIA EXCHANGE LTD.; BLUE
WATER SERVICES LTD.; ABSOLUTE
ENTERTAINMENT, S.A.; and BLANCA
GAMES, INC. OF ANTIGUA; RAYMOND
BITAR; HOWARD LEDERER; CHRISTOPHER
FERGUSON, a/k/a "JESUS;" and
RAFAEL FURST,
Defendants;
and
ALL RIGHT, TITLE AND INTEREST IN
THE ASSETS OF POKERSTARS; FULL
TILT POKER; ABSOLUTE POKER;
ULTIMATE BET; OLDFORD GROUP LTD.;
RATIONAL ENTERTAINMENT ENTERPRISES
LTD.; PYR SOFTWARE LTD.; STELEKRAM
LTD.; SPHENE INTERNATIONAL LTD.;
TILTWARE LLC; KOLYMA CORPORATION
A.V.V.; POCKET KINGS LTD.; POCKET
KINGS CONSULTING LTD.; FILCO LTD.;
VANTAGE LTD.; RANSTON LTD.; MAIL
MEDIA LTD.; FULL TILT POKER LTD.;
SGS SYSTEMS INC.; TRUST SERVICES
LTD; FIDUCIA EXCHANGE LTD.; BLUE
WATER SERVICES LTD.; ABSOLUTE
ENTERTAINMENT, S.A.; and BLANCA
GAMES, INC. OF ANTIGUA; INCLUDING
BUT NOT LIMITED TO THE PROPERTIES

Case No.: ll-Civ-2564 (LBS)

LISTED IN SCHEDULE A, SUCH AS BUT
NOT LIMITED TO THE DOMAIN NAMES
POKERSTARS.COM; FULLTILTPOKER.COM;
ABSOLUTEPOKER.COM;
ULTIMATEBET.COM; and UB.COM;
ALL RIGHT, TITLE, AND INTEREST IN
THE PROPERTIES LISTED IN SCHEDULE
B; and ALL RIGHT, TITLE, AND
INTEREST IN THE PROPERTIES LISTED
IN SCHEDULE C,
Defendants-in-rem.

- - - - - -x

VERIFIED ANSWER AND COUNTERCLAIM OF
CLAIMANT STEVE SEGAL ON BEHALF OF A CLASS
TO VERIFIED COMPLAINT

TO THE HONORABLE COURT:
Claimant Steve Segal ("Claimant"), on behalf of himself and similarly situated
U.S. Poker Players who lost access to their Full Tilt Poker accounts on April 15, 2011,
(the "Class") by his attorneys, responds with his Verified Answer and Counterclaim to
the Verified First Amended Complaint. Claimant denies all allegations except to the
extent admitted or otherwise answered and respectfully alleges as follows:
1.

Claimant admits the allegations to the extent that PokerStars, Full Tilt

Poker and Absolute PokerfUltimate Bet (the "Poker Companies") were the three leading
internet poker companies doing business in the U.S. from approximately November 2006
until approximately April 2011. Claimant further admits that U.S. banks were unwilling
to process payments for Full Tilt Poker and thus, Full Tilt Poker utilized fraudulent

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methods to avoid the restrictions of the banks and receive funds from the U.S. residents
who gambled through the Full Tilt Poker. Claimant denies all other allegations regarding
Full Tilt Poker or any associated entity or affiliated person in paragraph and denies
knowledge or information sufficient to form a belief as to the truth of the remaining
allegations in paragraph "1".
2.

Claimant admits the allegations to the extent that Raymond Bitar ("Bitar")

and Nelson Burtnick ("Burtnick") were the principals of Full Tilt Poker and engaged in a
pattern of deception against U.S. banks and financial institutions allowing them to
process payments for Full Tilt Poker by receiving funds from U.S. players disguised as
payments to non-existent online merchants. Claimant denies knowledge or information
sufficient to form a belief as to the truth of the remaining allegations in paragraph "2".
3.

Claimant admits the allegations to the extent that Bitar, Burtnick, and Full

Tilt Poker relied on highly compensated third party processors including Ira Rubin
("Rubin") and Chad Elie ("Elie") and the deceptive practices utilized by these third party
processors in lying to U.S. banks about the transactions being processed and covering up
the misrepresentations through the creation of phony front companies. Claimant denies
knowledge or information sufficient to form a belief as to the truth of the remaining
allegations in paragraph "3".
4.

Claimant admits the allegations to the extent that there was a coordination

of efforts by Bitar, Burtnick, and Full Tilt Poker along with the third party processors to
deceive U.S. banks and financial institutions into processing the funds of U.S. players.
Claimant further admits that there was a practice of players being charged a "rake" on
hands played online through Full Tilt Poker. Claimant denies knowledge or information

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sufficient to form a belief as to the truth of the remainder of the allegations in paragraph
""4".

5.

Claimant admits the allegations to the extent that Full Tilt Poker engaged

in bank fraud, wire fraud, money laundering, and the defrauding of the U.S. Players by
misrepresenting that funds deposited into their online player accounts were secure and
segregated from operating funds while at the same time using the player funds to pay
hundreds of millions of dollars to Full Tilt Poker owners. Claimant denies knowledge or
information sufficient to form a belief as to the truth of the allegation regarding the extent
of Full Tilt Poker's presence overseas and denies all other allegations pertaining to Full
Tilt Poker in paragraph "5".
6.

Claimant admits the allegations to the extent that in approximately the

summer of 2010, Full Tilt Poker's payment processing channels were so disrupted that
the Company faced increased difficulty in collecting funds from U.S. Players. Claimant
denies knowledge or information sufficient to form a belief as to the truth of remaining
allegations in paragraph "6".
7.

Claimant admits the allegations to the extent of the amount owed to U.S.

Players by Full Tilt Poker. Claimant denies knowledge or information sufficient to form
a belief as to the truth of the remaining allegations in paragraph "7".
8.

Claimant admits the allegations to the extent that Full Tilt Poker and its

Board of Directors, Bitar, Howard Lederer ("Lederer"), Christopher Ferguson
("Ferguson") and Rafael Furst ("Furst") distributed $443,860,529.89 to themselves, as
owners of the Company, and other owners of the Company. Claimant denies knowledge

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or information sufficient to form a belief as to the truth of remaining allegations in
paragraph "8".
9.

Claimant admits the return of the Grand Jury Indictment on or about

March 10, 2011, as alleged in paragraph "9".
Claimant admits paragraph "10" to the extent that the action was commenced on or about
April 14, by the filing of a sealed Complaint
10.

Claimant admits paragraph "10" to the extent that the action was

commenced on or about April 14,2011, by filing of a sealed Complaint and sought civil
monetary penalties from the Poker Companies and affiliated entities and persons.
11.

Claimant admits Paragraph" 11" to the extent that the Complaint sought

the relief explained.
12.

Claimant admits paragraph "12" to the extent that a restraining order was

issued on or about April 15,2011.
13.

Claimant admits paragraph "13" to the extent that an arrest warrant in rem

was issued on or about April 15, 2011.
14.

Claimant admits paragraph "14" to the extent that that the Indictment,

Restraining Order and Complaint were unsealed on or about April 20, 2011.

IS.

Claimant admits that there was an agreement between the U.S. and Full

Tilt Poker allowing Full Tilt Poker to utilize its domain name for continued international
service and to repay its U.S. Players, whose funds were in Player Accounts as alleged in
paragraph "IS".
16.

Claimant admits the allegations to the extent that the U.S. is seeking

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additional penalties and forfeitures other than as appeared in the initial Complaint.
Denies all other allegations contained in paragraph "16".
17.

The statements contained in paragraph "17" constitute a legal conclusion.

18.

The statements contained in paragraph "18" constitute a legal conclusion.

19.

The statements contained in paragraph "19" constitute a legal conclusion.

20.

The statements contained in paragraph "20" constitute a legal conclusion.

21.

Claimant denies knowledge or information sufficient to form a belief as to

the truth of allegations in paragraph "21".
22.

Claimant admits the allegations to the extent that Full Tilt Poker was

formed in approximately 2004 as an internet poker company, that Full Tilt Poker
provided real-money gambling over the internet to U.S. Players through its website, the
execution of Full Tilt Poker's business through several privately held corporations and
entities as provided in paragraph "22", and the significant market share that Full Tilt
Poker held in March 2011. Denies all other allegations contained in paragraph "22".
23.

Claimant admits all allegations in paragraph "23" as true.

24.

Claimant denies knowledge or information sufficient to form a belief as to

the truth of allegations in paragraph "24".
25.

Claimant admits the allegations to the extent they concern Full Tilt Poker

and the business relationships between Full Tilt Poker and Burtnick. Claimant denies
knowledge or information sufficient to form a belief as to the truth of remaining
allegations in paragraph "25".
26.

Claimant denies knowledge or information sufficient to form a belief as to

the truth of allegations in paragraph "26".

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27.

Claimant admits the allegations to the extent that Full Tilt Poker, Bitar,

and Burtnick utilized the assistance of Ryan Lang ("Lang") in identifying payment
processors, who would process payments from U.S. Players for Full Tilt Poker. Claimant
denies knowledge or information sufficient to form a belief as to the truth of the
remaining allegations in paragraph "27".
28.

Claimant admits the allegations to the extent they concern Full Tilt Poker,

Bitar, and Burtnick utilizing the assistance of Bradley Franzen ("Franzen") to identify
payment processors, who would process payments from U.S. Players. Claimant denies
knowledge or information sufficient to form a belief as to the truth of the remaining
allegations in paragraph "28".
29.

Claimant admits the allegations to the extent they concern Full Tilt Poker

and the use of Ruben to process payments for Full Tilt Poker from U.S. Players by
disguising them as payments to phony internet merchants. Claimant denies knowledge or
information sufficient to form a belief as to the truth of the remaining allegations in
paragraph "29".
30.

Claimant admits the allegations to the extent that Full Tilt Poker utilized

the assistance of Elie, among others, in opening bank accounts from which Full Tilt
Poker received payments from U.S. Players. Claimant denies knowledge or information
sufficient to form a belief as to the truth of the remaining allegations in paragraph "30".
31.

Claimant denies knowledge or information sufficient to form a belief as to

the truth of allegations in paragraph "31".
32.

Claimant admits the allegations to the extent that the U.S. enacted the

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Unlawful Internet Gambling Enforcement Act ("UIGEA") on approximately October 13,
2006, and several internet gambling companies terminated their operations in the U.S.
All other statements contained in paragraph "32" constitute legal conclusions.
33.

Claimant admits the allegations to the extent that following the passage of

UIGEA, Full Tilt Poker issued statements indicating that it would still offer gambling on
internet poker in the United States. Claimant denies knowledge or information sufficient
to form a belief as to the truth of the remaining allegations in paragraph "33".
34.

Claimant admits insofar as the unwillingness of U.S. Banks to permit Full

Tilt Poker to open bank accounts in the U.S. to receive proceeds from U.S. Players and
the actions taken by Full Tilt Poker, Bitar, and Burtnick to deceive U.S. Banks into
processing these transactions. Claimant denies knowledge or information sufficient to
form a belief as to the truth of the allegations against Scheinberg, Tom, Beckley, and
Tate. All other statements contained in paragraph "34" regarding Full Tilt Poker entities
or affiliated persons are denied by Claimant.
35.

Claimant admits all allegations contained in paragraph "35" as true.

36.

Claimant admits the allegations as to the actions of Bitar, Burtnick, and

Full Tilt Poker in circumventing the Visa and MasterCard regulations and deceiving U.S.
Banks into authorizing transactions by disguising the transactions. Claimant denies
knowledge or information sufficient to form a belief as to the truth of the remaining
allegations in paragraph "36".
37.

Claimant admits the allegations as to the use of phony or "front"

companies by Bitar, Burtnick, and Full Tilt Poker as a strategy to deceive Visa,
MasterCard, and U.S. banks, the involvement of Bitar and Burtnick in the creation of

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phony companies, and the creation of such fictitious companies in advance should Visa
or MasterCard shut down one currently in use. Claimant denies knowledge or
information sufficient to form a belief as to the truth of the remaining allegations in
paragraph "37".
38.

Claimant admits the allegations as to the involvement of Bitar, Burtnick,

and Full Tilt Poker in the development of "store-valued cards"

or pre-paid debit or

phone cards - that could contain funds from a U.S. Player's credit card without triggering
a violation of the Visa or MasterCard restrictions. Further, Claimant admits the creation
of phony websites and consumer reviews by Bitar, Burtnick, and Full Tilt Poker for the
store-valued cards for the purposes of deceiving the credit card companies and U.S.
Banks. Claimant denies knowledge or information sufficient to form a belief as to the
truth of the remaining allegations in paragraph "38".
39.

Claimant admits the allegations as to the attempts of Visa and

MasterCard to deny transactions from Full Tilt Poker. Further, Claimant admits the
inconsistent results that stemmed from the deceptive actions of Bitar, Burtnick, and Full
Tilt Poker. Further, Claimant admits Bitar, Burtnick, and Full Tilt Poker worked on and
developed a method of processing payments through fraudulent e-check processing.
Claimant denies knowledge or information sufficient to form a belief as to the truth of the
remaining allegations in paragraph "39".
40.

Claimant admits the allegations as to the statements regarding the

Automated Clearinghouse ("ACH") system administered by the Federal Reserve, which
allowed for e-checking, and the increased emphasis that Bitar, Burtnick and Full Tilt
Poker placed on the use of e-checks for the payment system. Claimant denies knowledge

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or information sufficient to form a belief as to the truth of the remaining allegations in
paragraph "40".
41.

Claimant admits the allegations as to the statements pertaining to the ACH

requirement that a merchant open a processing account at a U.S.-based Originating
Depository Financial Institution ("ODFI") and the use of third-party processors by Bitar,
Burtnick, and Full Tilt Poker to open bank accounts and process the e-check transactions
on behalf of Full Tilt Poker. Claimant denies knowledge or information sufficient to
form a belief as to the truth of the allegations pertaining to any other party named in
paragraph "41". All other allegations contained in paragraph "41" against Full Tilt Poker
are denied.
42.

Claimant admits the allegations to the extent that Bitar, Burtnick, and Full

Tilt Poker relied on various middlemen to connect Full Tilt Poker with e-check
processors and Bitar, Burtnick, and Full Tilt Poker entered into agreement with e-check
processors, which paid the payment processors lucrative fees. Further, Claimant admits
that Bitar, Burtnick, and Full Tilt Poker worked in collaboration with the e-check
processors to disguise the transactions. Claimant denies knowledge or information
sufficient to form a belief as to the truth of the remaining allegations in paragraph "42".
43.

The Claimant will address paragraph "43" on each individual allegation

contained in each subparagraph:
a. Claimant admits the allegations to the extent that e-check processors
opened accounts with U.S.-based ODFI banks in order to access the
ACH system for Full Tilt Poker and both specific and unspecific
misrepresentations were made by the e-check processors to the banks

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in connection with the Full Tilt Poker accounts. Claimant denies
knowledge or information sufficient to form a belief as to the truth of
the remaining allegations in paragraph "43a".
b. Claimant admits the allegations to the extent of Bitar, Burtnick, and
Full Tilt Poker's efforts with the e-check processors to create dozens
of phony corporations and corresponding websites. Claimant denies
knowledge or information sufficient to form a belief as to the truth of
the remaining allegations in paragraph "43b".
c. Claimant admits the allegations to the extent that Bitar, Burtnick, and
Full Tilt Poker's involvement in the creation and coordination of
phony and front companies along with the e-check processors.
Further, Claimant admits the results of the e-checking process when a
phony merchant was being utilized in place of Full Tilt Poker in the
transaction. Claimant denies knowledge or information sufficient to
form a belief as to the truth of the remaining allegations in paragraph
"43c".
d. Claimant admits all allegations contained in paragraph "43d" as true.
e. Claimant denies knowledge or information sufficient to form a belief
as to the truth of the allegation in paragraph "43e".
44.

Claimant admits the allegations to the extent that Bitar, Burtnick, and Full

Tilt Poker were involved with multiple e-check processors. Claimant denies knowledge
or information sufficient to form a belief as to the truth of the remainder of the allegations
in paragraph "44" on p. 27. Claimant will address each subparagraph as follows:

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a. Claimant denies knowledge or information sufficient to form a belief
as to the truth of the allegations in paragraph "44a".
b. Claimant admits the allegations to the extent that Bitar, Burtnick and
Full Tilt Poker were involved with Elie for payment processing
purposes. Claimant denies knowledge or information sufficient to
form a belief as to the truth of the remaining allegations in paragraph
"44b".
c. Claimant denies knowledge or information sufficient to form a belief
as to the truth of the allegations in paragraph "44c".
d. Claimant admits the allegations to the extent that Bitar, Burtnick, and
Full Tilt Poker were involved with an Arizona payment processor with
ties to Lang. Claimant denies knowledge or information sufficient to
form a belief as to the truth of the remaining allegations in paragraph
"44d".
e. Claimant admits the allegations to the extent that Bitar, Burtnick, and
Full Tilt Poker were involved with Rubin and his various related
entities for the purpose e-check processing. Claimant denies
knowledge sufficient to form a belief as to the truth of the remaining
allegation in paragraph "44e".
45.

Claimant admits the allegations of Bitar, Burtnick, and Full Tilt Poker's

exploration of transparent processors and continued use of disguised payment processing
transactions. Claimant denies knowledge sufficient to form a belief as to the truth of the
remaining allegations in paragraph "45".

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46.

Claimant admits the allegations to the extent that Bitar, Burtnick, and Full

Tilt Poker reached out to Lang, Franzen, and Elie in an attempt to find transparent
processors. Claimant denies knowledge sufficient to form a belief as to the truth of the
remaining allegations in paragraph "46".
47.

Claimant admits the allegations to the extent that Full Tilt Poker had

difficulty in identifying transparent processors and Elie managed to persuade smaller
banks with the promises of larger fees than the norm and a large investment from Elie
and his associates to process the payments of Full Tilt. Claimant denies knowledge
sufficient to form a belief as to the truth of the allegations pertaining to any other
individual or entity. Claimant denies any other allegation pertaining to Full Tilt Poker or
any associated entity or affiliated person in paragraph "47".
48.

Claimant denies knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph "48".
49.

Claimant admits the allegations to the extent they concern SunFirst Bank

processing payments for Full Tilt Poker. Claimant denies any knowledge sufficient to for
a belief as to the truth of the remaining allegations in paragraph "49".
50.

The claimant will address paragraph "50" on each individual allegation

contained in each subparagraph:
a. Claimant denies knowledge or information sufficient to form a belief
as to the truth of the allegations in subparagraph "50a".
b. Claimant admits insofar as the allegations pertain to the electronic
transfer of funds from a gambler located in the Southern District of
New York to Full Tilt Poker. Claimant denies knowledge sufficient to

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form a belief as to the truth of the remaining allegations in
subparagraph "SOb".
c. Claimant denies knowledge or information sufficient to form a belief
as to the truth of the allegations in subparagraph "SOc".
d. Claimant denies knowledge or information sufficient to form a belief
as to the truth of the allegations in subparagraph "SOd".
e. Claimant denies knowledge or information sufficient to form a belief
as to the truth of the allegations in subparagraph "SOe".
f. Claimant denies knowledge or information sufficient to form a belief
as to the truth of the allegations in subparagraph "SOf'.
g. Claimant denies knowledge or information sufficient to form a belief
as to the truth of the allegations in subparagraph "SOg".
h. Claimant denies knowledge or information sufficient to form a belief
as to the truth of the allegations in subparagraph "SOh".
1.

Claimant denies knowledge or information sufficient to form a belief
as to the truth of the allegations in subparagraph "SOi".

J. Claimant denies knowledge or information sufficient to form a belief
as to the truth of the allegations in subparagraph "SOl'.
k. Claimant denies knowledge or information sufficient to form a belief
as to the truth of the allegations in subparagraph "SOk".

1.

Claimant admits all allegations contained in subparagraph "501" as
true.

51.

Claimant admits all allegations contained in paragraph "51" as true.

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52.

Claimant admits all allegations contained in paragraph "44" on p. 36 along

with all attached subparagraphs as true.
53.

Claimant denies knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph "52".
54.

Claimant denies knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph "53".
55.

Claimant denies knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph "54".
56.

Claimant denies knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph "55".
57.

Claimant denies knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph "56".
58.

Claimant denies knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph "57".
59.

Claimant denies knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph "58".
60.

Claimant denies knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph "59".
61.

Claimant denies knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph "60".
62.

Claimant denies knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph "61".
63.

Claimant denies knowledge or information sufficient to form a belief as to

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the truth of the allegations in paragraph "62".
64.

Claimant denies knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph "63".
65.

Claimant denies knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph "64".
66.

Claimant admits all allegations contained in paragraph "65" as true.

67.

Claimant admits all allegations contained in paragraph "66" as true.

68.

Claimant admits all allegations contained in paragraph "67" as true.

69.

Claimant admits all allegations contained in paragraph "68" as true.

70.

Claimant admits all allegations contained in paragraph "69" as true.

71.

Claimant admits all allegations contained in paragraph "70" as true.

72.

Claimant admits all allegations contained in paragraph "71" as true.

73.

Claimant admits all allegations contained in paragraph "72" as true.

74.

Claimant admits all allegations contained in paragraph "73" as true.

75.

Claimant admits all allegations contained in paragraph "74" as true.

76.

Claimant admits all allegations contained in paragraph "75" as true.

77.

Claimant denies knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph "76".
78.

Claimant denies knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph "77".
79.

Claimant denies knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph "78".
80.

Claimant denies knowledge or information sufficient to form a belief as to

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the truth of the allegations in paragraph "79".
81.

Claimant denies knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph "80".
82.

Claimant denies knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph "81".
83.

Claimant denies knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph "82".
84.

Claimant denies knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph "83".
85.

Claimant denies knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph "84".
86.

Claimant denies knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph "85".
87.

Claimant denies knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph "86".
88.

Claimant denies knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph "87".
89.

Claimant denies knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph "88".
90.

Claimant denies knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph "89".
91.

Claimant denies knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph "90".

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92.

Claimant denies knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph "91".
93.

Claimant admits all allegations contained in paragraph "92" as true.

94.

Claimant admits all allegations contained in paragraph "93" as true.

95.

Claimant admits all allegations contained in paragraph "94" as true.

96.

Claimant admits all allegations contained in paragraph "95" as true.

97.

Claimant admits all allegations contained in paragraph "96" as true.

98.

Claimant admits all allegations contained in paragraph "97" as true.

99.

Claimant admits all allegations contained in paragraph "98" as true.

100.

Claimant admits the allegations to the extent that Full Tilt Poker

committed wire fraud and money laundering while also defrauding the U.S. Players by
paying out hundreds of millions of dollars to Full Tilt Owners while misrepresenting that
funds in the player accounts were safe. Further, Claimant admits that Full Tilt Poker
failed to segregate the player funds from the operating funds and failed to keep the player
funds properly secured. Claimant denies knowledge or information sufficient to form a
belief as to the truth of what Full Tilt Poker owns internationally, the true nature of its
financial condition or whether there were or are sufficient funds to refund the players.
Claimant denies any other allegation pertaining to Full Tilt Poker or any associated entity
or affiliated person in paragraph "99".
101.

Claimant admits all allegations contained in paragraph "100" as true.

Further, Claimant admits the allegations contained in the subparagraphs as true.
102.

Claimant admits all allegations contained in paragraph "101" as true.

Further, Claimant admits the allegations contained in the subparagraphs as true.

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103.

Claimant admits all allegations contained in paragraph "102" as true.

104.

Claimant denies knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph "103".
105.

Claimant admits all allegations contained in paragraph "104" as true.

106.

Claimant admits the allegations to the extent that Full Tilt Poker made

material misrepresentations to U.S. Players concerning the security of their funds, where
the funds were being kept and how the funds were being utilized, including the payment
of funds to Full Tilt Owners. Claimant denies knowledge or information sufficient to
form a belief as to the truth of the remaining allegations in paragraph" 105".
107.

Claimant admits all allegations contained in paragraph "106" as true.

108.

Claimant admits all allegations contained in paragraph "107" as true.

109.

Claimant admits all allegations contained in paragraph "108" as true.

110.

Claimant admits all allegations contained in paragraph "109" as true.

111.

Claimant admits all allegations contained in paragraph "110" as true.

112.

Claimant admits all allegations contained in paragraph" Ill" as true.

113.

Claimant admits all allegations contained in paragraph "112" as true.

114.

Claimant admits the allegations to the extent that Full Tilt Poker

experienced difficulty in processing payments and would authorize the crediting of player
accounts with funds that had not yet been transferred from the player's bank or credit
card accounts. Claimant denies any other remaining allegation contained in paragraph
"113".
115.

Claimant admits the allegations to the extent the funds were not as "safe"

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or "secure" as represented. Claimant denies knowledge or information sufficient to form
a belief as to the truth of the remaining allegations in paragraph "114".
116.

Claimant admits the allegations to the extent that Full Tilt Poker continued

to make payments to owners up to and including April 1, 2011. Claimant denies
knowledge or information sufficient to form a belief as to the truth of the remaining
allegations in paragraph "115".
117.

Claimant admits the allegations to the extent that Full Tilt Poker,

following the Arrest Warrant In Rem, continued its international operations and continued
to accept deposits from non-U.S. players. Claimant denies knowledge or information
sufficient to form a belief as to the truth of the remaining allegations in paragraph" 116".
118.

Claimant denies knowledge or information sufficient to form a belief as to

the truth of the allegations in paragraph" 111".
119.

Claimant admits the allegations to the extent that Full Tilt Poker never

disclosed that it would not or could not return funds to these new depositors. Claimant
denies knowledge or information sufficient to form a belief as to the truth of the
remaining allegations in paragraph "118".
120.

Claimant admits all allegations contained in paragraph "119" as true.

121.

Claimant admits all allegations contained in paragraph "120" as true.

122.

Claimant admits the allegations to the extent that Full Tilt Poker had

difficulty opening accounts with U.S. Banks and in order to defraud these banks operated
in a deceptive course of conduct. Claimant denies knowledge or information sufficient to
form a belief as to the truth of the allegations against any non-Full Tilt Poker entity or

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party. Claimant denies any other allegation pertaining to Full Tilt Poker or any
associated entity or affiliated person in paragraph" 121".
123.

Claimant admits the allegations to the extent that Full Tilt Poker and its

board members engaged in a course of conduct, which was designed to and did deceive

u.s. Players.

Claimant denies knowledge or information sufficient to form a belief as to

the truth of the remaining allegations in paragraph" 122".
124.

All allegations contained in paragraph "123" constitute legal conclusions.

125.

All allegations contained in paragraph "124" constitute legal conclusions.

126.

All allegations contained in paragraph" 125" constitute legal conclusions.

127.

All allegations contained in paragraph "126" constitute legal conclusions.

128.

All allegations contained in paragraph "127" constitute legal conclusions.

129.

All allegations contained in paragraph "128" constitute legal conclusions.

130.

All allegations contained in paragraph "129" constitute legal conclusions.

131.

All allegations contained in paragraph "130" constitute legal conclusions.
AS AND FOR A FIRST AFFIRMATIVE DEFENSE

132.

The complaint fails to state a claim against Claimant and Class' property

upon which relief may be granted.
AS AND FOR A SECOND AFFIRMATIVE DEFENSE
133.

Claimant and the Class's property are the proceeds of lawful earnings.
AS AND FOR A THIRD AFFIRMATIVE DEFENSE

134.

Claimant and the Class's property were intended to be used for a lawful

purpose.
AS AND FOR A FOURTH AFFIRMATIVE DEFENSE

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135.

Without waiving any defense asserted herein, to the extent that plaintiff

seeks forfeiture of any property in which the Claimant and the Class have an interest,
Claimant and the Class are innocent owners of said interest as provided for in 18 U.S.c.
§983(d).
AS AND FOR A FIFTH AFFIRMATIVE DEFENSE
136.

Without waiving any defense asserted herein, Claimant and the Class

assert that any interest they have in any of the property sought to be subject to forfeiture
herein is not subject to forfeiture because the Claimant and the Class's interest in such
property does not constitute nor is derived from proceeds traceable to any "specific
unlawful activity" or any other crime within the meaning of 18 U.S.c. §1955, 18 U.S.c.
§981(a)(l)(c), 18 U.S.C. 1956(c)(7), 18 U.S.c. §1961(l)(b), or any other applicable
federal or state statute.
AS AND FOR A FIRST COUNTERCLAIM
137.

Claimant requests costs, pre- and post-judgment interest and attorney's

fees pursuant to the Civil Asset Forfeiture Reform Act of 2000 ("CAFRA"), Pub. L. 106185, 106th Congo (2000), 114 Stat. 2111 (April 25, 2000) and the Equal Access to Justice
Act, 28 U.S.c. §2412 ("EAJA").
WHEREFORE, Claimant Steve Segal, on behalf of the Class of U.S. Players,
prays this Honorable Court will:
1.

DISMISS Plaintiff's complaint and enter judgment on behalf of the

Claimant and the Class, directing that the Plaintiff not take any property in which
Claimant and the Class have any interest in forfeiture as result of this action, direct that
Plaintiff not be legally entitled to recover any property by reason forfeiture in which

22

Claimant and the Class has any interest, and directing the release and return of all
property heretofore seized, attached andlor restrained in which the Claimant and the
Class have an interest; and
2. Award Claimant and the Class costs, pre- and post-judgment interest and
attorneys' fees pursuant to CAFRA and the EAJA; and
3. Provide such other and further legal and equitable relief, as the Court deems
just and proper.

WOLF HALDENSTEIN ADLER
FREEMAN & HERZ LLP

Dated: November 10,2011

By:

lsI Thomas H. Burt
Lawrence P. Kolker
Thomas H. Burt
Edmund Aronowitz
Lydia A. Keaney
Beth A. Landes
270 Madison Avenue
New York, New York 10016
Telephone: [phone]
Facsimile: 212-545-4653

672088

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VERIFICATION

Steve Segal, who is a named plaintiff and filed on behalf of a putative class of
U.S. Players that held Player Accounts with Full Tilt Poker, here by declares under
penalty of perjury that the foregoing is true and correct to the best of my knowledge,
information and belief.

Steve Segal

Sworn to before me this
9th day of November, 2011

~iL,

//

I

I .Notary Public
V

v

JO~EPH WEISfS
York
Notary Public, State 0 New
No. 01WE5069215
Qualified in ~assau county I 2.....-Commission Expires Nov. 18, 20 J..