with the DOJ and Groupe Bernard Tapie.
Ferguson's distributions were paid mostly into accounts that Pocket Kings held for him. These accounts were unambiguously controlled by him, and were typically referred to as "Chris's accounts." For example, his April 2007 distribution was about $1.3 million, $400,000 of which went to his personal account and about $900,000 of which went to a PK account. His March 2011 distribution was about $1.9 million, $600,000 of which went to his personal account and about $1.3 million of which went to a PK account. These transactions are roughly typical, and in total, he had $25.2 million sent directly to his personal account and just under $60 million sent to the accounts that Pocket Kings held for him.
Ferguson was then able to effectively withdraw the majority of this roughly $60 million in a variety of ways, in a large number of transactions over a four-year period. He withdrew $3.5 million directly to various personal accounts of his, sent another $3.5 million to his lawyer Ian Imrich (including $2 million that was reportedly meant to be forwarded straight to Ferguson), gave out $3.5 million in loans to other owners that were explicitly marked to be repaid elsewhere,2 sent $352,500 to charity, purchased $10 million in additional shares from other owners, made about $17.75 million additional payments to other owners whose purpose was unclear to us (including $7 million in the days leading up to Black Friday), put just under $2 million into personal investments, sent $160,000 to an acquaintance, sent $2.38 million to a Hawaiian real estate limited liability company, and made just under $2 million in additional payments that we were unable to classify.3 Subject: Poker believes that all of these transactions were made at Ferguson's request or at the request of his attorney, Ian Imrich.
However, he did not withdraw all of this money; just over $14.3 million was left in the accounts and, after Black Friday when the company faced insolvency, was used to pay for Full Tilt expenses, perhaps including non-US player withdrawals.One source, whom we believe to be credible, told Subject: Poker that Ferguson gave permission for this money to be spent in this way.
Threats to the GBT Deal
Ferguson and Imrich have been trying to get back the roughly $14.3 million from Ferguson's Pocket Kings accounts that went to Full Tilt's expenses. In fact, early versions of Full Tilt's agreement with Groupe Bernard Tapie included provisions to give Ferguson passive shares worth approximately $14 million. But, that offer was removed when the DOJ objected to Full Tilt's board of directors having any shares in the potential new company. Since this happened, Ferguson and Imrich have been claiming that they are entitled to an accounting to see if they can recoup for themselves any funds that they feel were spent improperly.
If they don't receive this accounting, Imrich and Ferguson have threatened to file for, amongst other things, a constructive trust over the money seized on Black Friday and injunctive relief to delay the planned forfeiture of FTP's assets until their issue is settled. Numerous sources have reported these threats. The approximately $35-$45 million that was seized on Black Friday is currently expected to be released to GBT to help repay non-US players. So, either of these steps could stop the deal if they were granted by a judge.
Sources tell Subject: Poker that Ferguson and Imrich have not received such an accounting. They have not yet followed through on these threats as of the publishing of this article. It is not clear whether they can even legally file such a suit, nor is it clear that it would be successful.
Ferguson's April 20th Canceled Withdrawal
Ferguson continued to use the accounts that Pocket Kings held for him after Black Friday. On April 20th, five days after US players lost the ability to withdraw, $5 million was wired from one of Ferguson's Pocket Kings accounts to his personal bank account. This personal account was distinct from the one that received $25.2 million in distributions and was not the one that the DOJ seized on September 20th. However, Subject: Poker has learned (after a long investigation) that Ferguson agreed to send this $5 million back to Pocket Kings the day after it was sent to his account. This money then became part of the $14.3 million that was eventually used for company expenses.
Ferguson's attorney, Ian Imrich, was FTP's general counsel since its inception. This was well known amongst the owners. However, he was also reportedly the recipient of monthly distributions. These distributions were apparently not paid via the normal channels, but instead were paid privately by Chris Ferguson from his own personal distributions, reportedly from the $25.2 sent directly to an account in Ferguson's name. This was above and beyond the over $12 million that Imrich received for legal fees directly from Full Tilt.
As early as mid July, after Full Tilt's licenses were suspended by the Alderney Gambling Control Commission and well beforenegotiations had begun with GBT, Imrich, still acting as Full Tilt's counsel, was already trying to get Ferguson credit for the $14.3 million that he agreed to use for Pocket Kings' expenses. This included the $5 million that Ferguson withdrew after Black Friday and then sent back.
Imrich resigned as general counsel in September, soon after the amended complaint was filed. He filed his appearance as personal counsel to Ferguson on November 2nd. Although another attorney, Jon Harris of Cutler & Houghteling LLP, also filed an appearance on Ferguson's behalf on October 6th, Imrich is still actively involved in trying to get his client credit for the money that Ferguson agreed to use for Pocket Kings' expenses.
The Department of Justice
The US Department of Justice apparently did not know about Ferguson's accounts in Pocket Kings' name (or perhaps just Ferguson's control over them) when it filed its amended civil complaint on September 20th. Instead, the amended complaint and the corresponding DOJ press statement said that Ferguson had "received at least $25 million, with the remaining balance [of about $60 million in unaccounted for distributions] characterized as 'owed' to him." As we explained above, Ferguson did in fact receive $25.2 million in distributions into the US bank account that the DOJ mentioned in its amended complaint, but he also moved over $45 million from accounts held for him in Pocket Kings' name and agreed to have the remaining $14.3 million used for Full Tilt expenses.
Multiple sources tell Subject: Poker that the DOJ has successfully seized approximately $300,000 from Ferguson, significantly less than the $25 million that the DOJ is suing Ferguson for in the amended complaint. So, it is not clear how Ferguson intends to receive the $14.3 million without immediately having it seized by the DOJ.
We made repeated attempts to contact Mr. Imrich and attempted to contact Mr. Ferguson as well. Unfortunately, neither of them was available for comment. We will update our readership if either of them provides a comment.