Barney Frank’s Newest Banking Reform: Illegal Poker and a Ponzi Scheme

John Ransom
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Posted: Sep 24, 2011 12:01 AM

With Barney Frank it’s hard to tell where his old reforms start and his newest reforms begin.

They all look the same.

Frank has long been an advocate of legalized prostitution and online gambling in order that they both can be "regulated" by the government. And by regulated, he means, squeezed.  

Gee. What could go wrong with a scheme where the federal government regulates prositution and gambling? In the Democrats' minds, nothing.   

Before you know it, Obama will be giving out stimulus dollars for federal jobs training programs in the prositution and gambling industries to schools run by big donors. 

Let's put the word s-e-r-v-i-c-e back into SEIU and save/create some more "green" jobs. Think of the potential. Hurray for reform! And when I say reform, I mean graft.    

As a three-decade veteran of congress Frank knows that you don't have to wait for something to be legal before you start peddling influence. And when I say peddling influence, I mean peddling influence.      

Already Frank has been taking money from offshore gaming company Full Tilt Poker (FTP) that the Justice Department now says is just a Ponzi scheme. Full Tilt’s Howard Lederer, Rafael Furst and Chris Ferguson are being charged by the DoJ with defrauding online poker players and diverting money to the accounts of board members at FTP.

The Democrat "reformer" from Massachusetts and a thirty-year veteran in Congress, reportedly took $18,600 from Full Tilt.  

From the Boston Herald:

Sheila Krumholz of the Washington-based Center for Responsive Politics said, “There’s certainly the potential for conflict of interest here, and this is an illegal industry.”

She noted Frank was the top recipient of campaign cash from the Poker Players Alliance Political Action Committee, which received hefty contributions from the three accused men, in the past two election cycles. “He’s clearly on their radar screen as someone they need to befriend.”

“Rep. Frank may be taking contributions from backers of an ‘illegal industry,’ but he’s not alone,” Krumholz said. “Other such industries — casinos, liquor and gun manufacturers — also play the Washington influence game, but this one is still illegal. And Frank’s donors associated with Full Tilt Poker’s alleged Ponzi scheme certainly doesn’t help matters.”

Frank, the man who wrote the so-called bank reform legislation; the man who pimped for Fannie Mae and Feddie Mac on Capitol Hill, took money from a company that not only operated illegally in the United States, allegedly, but that also apparently committed criminal fraud against US citizens by being nothing more than a Ponzi scheme meant to enrich members of the board of directors according to government attorneys.   

Wait. It sounds an awful lot like Fannie Mae and Freddie Mac, actually, on second thought. No one knows more about that kind of scam than Frank does. That's probably why FTP hired him.    

So far the Obama administration has been silent as to whether the company now qualifies for federal loan guarantees. I’m sure a major Obama donor will turn up in this mess at some point.    

“I want to control it as a business,” said Frank recently “to keep it respectable. I don't want it near schools -- I don't want it sold to children!”  

Oh wait. Nope. That’s a line from Joseph Zaluchi, a crime syndicate boss in the movie the Godfather. Hard to keep those two straight anymore.     

Frank apparently doesn’t care that online gambling is still illegal in this country. But the Justice Department does. While enforcing the law that makes online gambling illegal in the US, the Justice Department came across evidence of the scheme.   

“Full Tilt was not a legitimate poker company,” said the U.S. Attorney for the Southern District of New York, Preet Bharara, “but a global Ponzi scheme. As a result of our enforcement actions this alleged self-dealing scheme came to light. 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. As described, 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.”

According to the Wall Street Journal “[B]etween April 2007 and April 2011, various owners and directors of Full Tilt collected $444 million dollars from the company for themselves, the government alleges.”

But Frank dismissed the scandal with an ironic reference to the mortgage scandals at Fannie Mae and Freddie Mac according to the Boston Herald: “The US attorneys haven’t done enough about mortgage fraud,” said the congressman who might be, more than any other legislator, responsible for the collapse of the housing market in the US. “They should be spending less time on full houses and more time on empty houses.”

This is the best that the voters from southern Mass. can do?

If so, coming soon: More Frank-sponsored reform.