Feds Call Full-Tilt Poker a 'Global Ponzi Scheme'

blair1q writes "Popular (and heavily advertised) poker website Full-Tilt Poker was sued today by the U.S. government, following an investigation that revealed it to be a massive Ponzi Scheme. The principals in the company set up a complicated system to direct funds from subscribers' poker accounts into their own bank accounts. This was in contravention of their own claim that users' money was untouched. Players' accounts amounted to $390 million, but the company only has $60 million in the bank, having over time distributed $440 million to its own directors and executives."

Comments

Re:No.

[roman_mir]

By the way, /. broke URL links.
GOOD JOB, IDIOTS.
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SS is a ponzi scheme, it's financed not by any fund but it relies on current payers to pay to current beneficiaries, and the future beneficiaries have to rely on future payers.

Do you know what Reagan and Tip O'Neill actually did?

In 1984 the payroll tax was raised from 10.8 to 11.4% and kept creeping up. They increased the amount of income subject to tax from 32400USD to 37800USD in one year (16.6%). So SS was raised in total by over 20% in one year. Also SS was originally (in 40s and 50s) paid by employees, not by self employed. However self employed didn't have to pay employer payroll portion of the tax. In 1983 they started collecting the "employer" payroll portion of the tax, so the SS tax went up from 6.8% to 14% 106% increase in one year. This + the SS tax increase of 16.6% described above, the effective rate of tax increase on self employed individuals was 140% tax hike in one year, and kept getting worse.

Reagan also imposed income taxes on SS benefits for higher earning individuals, which is means testing and reduction in benefits.

Reagan basically cut SS benefits for higher income people by applying income tax to SS benefits, while increasing taxes on higher income people by 140%.

When Romney says he'll keep SS around, what he means he'll have to raise taxes. However Obama came out with payroll tax cut, and he's likely to cut payroll taxes further.

I wonder what Obama thinks he is doing with SS? From my POV of-course SS is theft pure and simple.

SS is a ponzi scam by definition of payment transfers and not having a fund, but it was also based on a lie, to make it LOOK like there was a fund by pretending that high income earners wouldn't have to participate (and they didn't have to participate at first.) As all ponzi scams go, over time it became more and more difficult to cover the benefits, so they increased taxes from 2% to now 12%.
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Unfortunately /. links are broken, so here is the point again as stated in another comment:

Helvering v. Davis, 301 U.S. 619 (1937), decided on the same day as Steward, upheld the program because "The proceeds of both [employee and employer] taxes are to be paid into the Treasury like internal-revenue taxes generally, and are not earmarked in any way". That is, the Social Security Tax was constitutional as a mere exercise of Congress's general taxation powers. [wikipedia.org] - the gov't argued that SS payments are not earmarked, not actually going to be used for any purpose, but are only collected under general taxation powers of Congress.

Of-course the judge in the Supreme Court was very lazy, he didn't care (*was complicit*) and wrote this:

The argument for the respondent is that the provisions of the two titles dovetail in such a way as to Justify the conclusion that Congress would have been unwilling to pass one without the other. The argument for petitioners is that the tax moneys are not earmarked, and that Congress is at liberty to spend them as it will. The usual separability clause is embodied in the act. ' 1103. [cornell.edu]

We find it unnecessary to make a choice between the arguments, and so leave the question open.

The entire point of the court was to figure out whether SS taxes were Constitutional or not, and the judge said: I don't care, I'll leave the question open!

SS is absolutely clearly NOT SHOWN TO BE CONSTITUTIONAL in this judgment. At the very minimum it's a "maybe", but it's definitely not a "YES", which is what SCOTUS is SUPPOSED to show.