Lederer files motion to dismiss second amended complaint
Lawyer for former Tiltware board member describes complaint as "sprawling" " argues FTP was never an illegal gambling business under IGBA.
Former Tiltware board member Howard Lederer has filed a motion to dismiss the Second Amended Complaint, in which he was accused of using fraudulently obtained Full Tilt Poker (FTP) player funds to finance his properties and personal bank accounts.
Describing the complaint as “sprawling”, Lederer’s lawyer Elliot R Peters alleges in a 26-page accompanying memorandum that it is “So structurally complex that it takes a cartographer to understand what is being alleged and against whom.”
Repeating arguments made in August’s call for a status conference with regard to the allegations levelled against Lederer, Peters cites the United States v DiCristina ruling in arguing that Full Tilt Poker did not constitute an illegal gambling business under the Illegal Gambling Business Act (IGBA).
Calling for the dismissal of both in rem and in personam claims relating to Lederer, the lawyer cites the case Morrison v. National Australia Bank Ltd [a non-gambling case] and argues: “IGBA does not apply extraterritorially to a business operated abroad whose only contact with the United States is that some of its poker players are based here.”
There are also questions raised in the memorandum with regard to whether IGBA applies territorially, both in general terms and to FTP in particular, with one aspect of Lederer’s argument concerning the findings around Congress’ passage of UIGEA that: “Traditional law enforcement mechanisms are often inadequate for enforcing gambling prohibitions or regulations on the Internet, especially where such gambling crosses State or national borders.”
The argument makes specific points with regards to FTP’s non-US base (in Dublin) and the Alderney licence under which it operated until June 2011, noting: “FTP’s bank accounts were all outside of the United States. The only “territorial events” relating to FTP are the playing of poker hands on FTP’s site (and the associated payments for those hands) by players in the United States.”
Peters also argues: The complaint includes no claim against Lederer for allegedly defrauding FTP’s customers,” describing claims against the former Team Full Tilt member as “threadbare”, drawing attention to what is described in the motion to dismiss as the “few” facts connecting the defendant with FTP’s allegedly wrongful conduct.
He also says “The complaint fails to allege which, if any, FTP proceeds are traceable to a violation of a specific state law.” Because of this, the memorandum contends, “To the extent that the government has properly alleged FTP violated the law of one particular state and met the other requirements to sustain an IGBA violation, only FTP proceeds traceable to that IGBA violation could be subject to forfeiture. Without more, the government cannot seek to forfeit all FTP proceeds.”
Lederer’s motion to dismiss comes less than two weeks after the relaunch of FTP under new ownership, with the operator’s assets having been acquired by PokerStars as part of its settlement with US authorities in July.