Originally Posted by oneupper
Thanks for all the info. I'd have to agree with your assessment above.
If I'm reading correctly, the site was shut down in April, didn't return the money people had in their accounts but then it wasn't until September when it was determined that it was a fraud?
Not exactly. The DOJ indictments caused the sites in question to block US customers from playing in real money games, but they continued to operate as usual for non-US players.
The details of the alleged fraud on the part of FTP took some time to unravel because of the way that the company was structured. Initially the speculation was that FTP was having trouble cashing out American players because of the way that they structured their bank accounts, rather than insolvency.
Since Pokerstars kept their player bankrolls segregated from their corporate accounts, they were able to make a deal with the DOJ fairly quickly which allowed them to return funds to their American customers. It was assumed that FTP may have intermingled their players' bankrolls with their corporate accounts and the delay was being caused by the fact that they were having problems getting the DOJ to unfreeze those accounts to allow them to pay their customers.
It wasn't until later that the extent of the company's financial difficulties / improprieties began to surface.