Massive Poker Ponzi Scheme Finally Ends

5 years ago
Poker Ponzi Scheme Finally Ends
08:19
09 May

A new poker scandal has been on the loose for the last several weeks. Fortunately, it has nothing to do with superusers or poker rooms that don’t pay anymore. Unfortunately, it has to do with scammers hiding behind a poker label and stealing other people's money. Using the people’s willingness to make a quick buck and their own lack of knowledge against them, such scammers founded a company and persuaded hundreds into investing in it only to close it and run away with all the money.

Worse, It is unlikely that they will ever get caught since they used the ultimate weapon the Internet can provide: anonymity. But it is up to sites like PokerTube to at least cover such stories and warn the readers about the danger of getting involved in such schemes. Beware! Such shady individuals always find creative ways to fool the naive.


The Ponzi Scheme Named Poker Automatics

This is how they created Poker Automatics in the first place. Claiming it was founded in 2004, the scheme was allegedly an automatic system for gaining guaranteed passive income from online poker ‘24 hours a day, 7 days a week without human participation.’ Basically they said they owned a bot ring - hundreds and hundreds (773 at some point last year) of poker bots playing on all major networks and printing money. They even claimed in 2014 that those robots had been profitable for more than three years so the risk of losing was virtually non-existent.

Anyone could have started investing with as little as $30. Based on the investment, the user was assigned a level, one through seven, and based on the level, he earned an income ‘of the company’s revenue’ - the lowest was 40% while the highest was 80%.

Interestingly enough, once the user deposited the money and choose a plan, a.k.a level, he couldn’t touch his investment for 30 to 180 days (based on the level). During that period, presumably (and obviously NOT) the poker bot would play profitable online poker with the client’s money.

Of course, anyone who examined the logistics of the apparently real operation would have seen that something didn't add up. It is impossible to run so many bots - over 700 - on multiple poker sites without being caught, especially with today’s technology (poker tracking software, etc). It is also extremely hard to create 700 bots who can bypass all the security measures and play like human beings. And besides, if you actually can do that, why share with the rest of the world when you can crush online poker by yourself or yourselves?

Yet some inexperienced or gullible players saw potential in the scheme and actually believed it, even though there was an obvious precedent.


The Precedent: Poker By Proxy

Before Poker Automatics or Pokeram.com, in 2013, another similar poker product hit the Internet shelves: PokerByPoxy.com. This scheme was actually more believable. It claimed the user’s investment actually went to a real, skilled, poker player’s bankroll who used the funds to play ‘in some of the most profitable online games, as well as offline tournaments.’ In other words it was a form of staking, according to the scammers of course. The actual funds never reached those skilled players - only the program owners. The scammers bragged about ‘daily returns in excess of 5%, 10% or even 15% if not higher on exceptionally profitable days.’ They also claimed they had a 5% stop-loss so the investor couldn’t lose more than 5% in a single day.

Unfortunately for most of the investors more than that. Just months later, the site stopped paying its users and went offline. Most of the ‘investors’ ended up with losses close to 100%... in a single day.


So What Really Happened?

The reason we mentioned Poker By Proxy is that the owner(s) may very well be connected if not the same individuals. Both sites used some very aggressive marketing on Social Media and thetypical forums. Whenever somebody complained, a Pokeram.com representative would show up trying to convince the average reader that the complainer is actually a scammer, not Poker Automatics even though the complainer had undeniable proof.

The first red flags - although all the scheme was a big red flag from the very beginning - appeared last year, in autumn. Several ‘investors’ shared their experience in trying to withdraw large sums of money - close to $10,000 and beyond. One of them explained in depth how the business was conducted on Bitcointalk forums. When he realized Pokeram.com was most likely a ponzi scheme, he tried to withdraw $12,000 only to be astonished; not only did his funds never got into his account, but the funds were actually withdrawn to an anonymous account. Several days later, his account was blocked. Immediately a Pokeram.com representative tried to cover the marks but to no avail. The scheme was still working back then as money was pumped into the system and small payments were being made to show the Internet that the business was operational. However, the revenue decreased more and more so the scammers were left with only one option: flee and take all the money the users ‘invested’ with them.

So in March, Pokeram.com went offline. To stall for time and cover their tracks - including making all the money disappear through a series of Bitcoin transaction from one wallet to another - they went on to say in March that they sold the business and Poker Automatics should soon have a new owner. Unsurprisingly, the new owner never came, leaving many get-rich-quick wannabes poorer and bitter.


Do NOT Trust Shady Schemes! Really, DON’T!

The moral after this small history lesson is obvious: do not trust schemes that look shady! Do not be fooled by scammers who promise you hefty profits and incredible return on investments rates.

Since many of you are poker players, we all know there is no such thing as quick fix, especially when money is involved. To make money, you have to grind first. Avoid quick-fix schemes that are too good to be true because guess what? They actually are TOO GOOD TO BE TRUE.

Also, pay close attention to anyone who lures from behind an ‘anonymous’ label. Anonymity usually works both ways; yes, you will be anonymous, but so are the owners behind such schemes. And they will use that to break the rules and get away with things unharmed. Even if that means leaving you empty-handed.

Class dismissed.


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Florian is a freelance journalist and avid poker player with a strong passion to create unique and appealing stories.He is an experienced researcher on various topics, from business and the financial markets to psychology and the gambling industry.He blogs at Florianghe.com.Read more

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