Federal prosecutors said Tuesday that a popular online poker site already accused of money laundering and bank fraud operated essentially as a giant Ponzi scheme.

Full Tilt Poker and its board of directors, which includes some of the worlds most recognized players, was not a legitimate poker company, but a global Ponzi scheme, said Manhattan U.S. Attorney Preet Bharara in a statement.

Earlier this year, the Justice Department seized Full Tilt's domains and bank accounts as part of a broad investigation into illegal online gambling that included allegations of money laundering and bank fraud.

In an amendment to the original complaint filed in April, prosecutors now allege that Full Tilt Poker and its board of directors, including the well-known players Howard Lederer and Christopher Ferguson, lied to players about the status of their online accounts.

The funds in those accounts were supposed to remain untouched and available for withdrawal at any time, according to the complaint. But that wasn't the case.

Instead, Full Tilt Poker didnt have enough in those accounts to repay players, and, moreover, used whatever funds it could collect to pay board members and other company executives more than $440 million since April 2007.

Full Tilt insiders lined their own pockets with funds picked from the pockets of their most loyal customers while blithely lying to both players and the public alike about the safety and security of the money deposited with the company, said Bharara

The government said Full Tilt continued to plunge into the accounts despite the efforts of government investigators to shut down the complex methods in which money flowed from online players accounts to bank accounts managed by the companys executives.

Even as the money was flowing improperly to top company executives, the company continued to assure players that their money was safe, prosecutors said.

Not only did the firm orchestrate a massive fraud against the U.S. banking system, as previously alleged, Full Tilt also cheated and abused its own players to the tune of hundreds of millions of dollars, Bharara said in the statement.

On March 31, Full Tilt Poker owed about $390 million to players around the world, including about $150 million to players in the U.S., the complaint states. But at the time the company had only $60 million in its bank accounts. Prosecutors said the company still owes players over $300 million.

The April indictments targeted executives at Full Tilt and two other popular online poker sites, Absolute Poker and PokerStars.net.

Efforts to contact Full Tilt executives and their lawyers Tuesday were not immediately successful.

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