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) -- The U.S.

Department of Justice

has played a winning hand in its high-profile, high stakes shutdown of the online poker industry, sending

Full Tilt Poker

-- an alleged Ponzi Scheme -- away from the table for good, and guaranteeing a repayment of millions in missing customer funds through a $731 million settlement with the world's largest online poker company,


, on fraud charges.

For the U.S. Attorney's Office for the Southern District of New York, it's not an all-in win, but a walking away from the table with a sizable chip stack.

Tuesday's settlement appears to be the U.S. District Attorney's best effort at recovering missing funds from the collapse of Full Tilt, while also ending an era of internet poker on computers throughout the U.S. Still, online gambling continues unfettered abroad and PokerStars remains a leading Internet presence globally.

As part of a $731 million settlement,


will take over defunct competitor

Full Tilt Poker

and repay its burned customers $184 million in missing funds over the next 90 days, helping to curtail losses after the company's April 2011 collapse. As part of the settlement on civil fraud charges, PokerStars will also forfeit $547 million to the U.S.

In April 2011, the U.S. Attorney seized the domain names of PokerStars, Full Tilt and Absolute Bet in the U.S., but allowed customers in the likes of PokerStars to cash out their funds. Subsequently, a near-$400 million plus shortfall was discovered at Full Tilt Poker, prompting an ongoing fraud inquiry.

Full Tilt was built by Ray Bitar and was supported by poker legends Chris "Jesus" Ferguson and Howard Lederer. After its collapse, the U.S. Attorney in Manhattan called the online poker operation a "Ponzi scheme," and filed criminal fraud charges against founder Bitar.

Full Tilt Poker defrauded players by misrepresenting that player funds on deposit in online gambling accounts were available for withdrawal at any time, noted the U.S. Attorney on Tuesday. In reality, the Attorney says Full Tilt did not maintain funds sufficient to repay all players, and even used players' funds to distribute more than $400 million to its owners.


Two weeks before the initial complaint in this action was unsealed, Full Tilt Poker owed approximately $390 million to players around the world, including approximately $160 million to players in the United States," said the U.S. Attorney, noting that the company only had $60 million on deposit at its banks.

The DOJ worked to web poker operations in the U.S. following the 2006 passage of a federal law that banned online poker. As part of a widespread online gamine crackdown, U.S. Attorney Preet Bharara also filed fraud charges against PokerStars founder Isia Scheinberg. While Tuesday's settlement resolves Bharara's inquiry into PokerStars, Full Tilt's Bitar continues to face criminal charges. He is awaiting trial and has pleaded not guilty.

The U.S. Attorney's investigation has led to a half dozen guilty verdicts, while 11 others have been hit with various fraud charges. Seven of those charged in the U.S. Attorney's inquiry remain at large.

Additionally, the U.S. Attorney's office filed a motion to settle with online gaming company

Absolute Poker/Ultimate Bet

, in a move that will force the company to forfeit all of its assets. All of Tuesday's poker settlements do not constitute an admission of guilt, wrongdoing, culpability or liability, the U.S. Attorney noted.

The poker settlements stem from the

Unlawful Internet Gambling Enforcement Act

, passed by Congress and written into law on October 13, 2006. Once the law was passed, internet gambling became a federal crime, however the likes of PokerStars, Full Tilt and Absolute Poker/Ultimate Bet continued to operate in the U.S. through offshore entities.

In its settlement, the U.S. Attorney alleges that poker companies arranged for the money received from U.S. gamblers to be disguised as payments to hundreds of fake online merchants purporting to sell merchandise such as jewelry and golf balls, in a move that made it possible for banks and credit card issuers to unwillingly process law-breaking payments. "Poker companies allegedly used fraudulent methods to circumvent federal law and deceive these financial institutions into processing payments on their behalf," said the U.S. Attorney in a statement.

There is still the prospect that lawmakers re-open U.S. to online gaming, with the prospect that Tuesday's settlement augurs well for PokerStars.



that Las Vegas casinos like

Caesars Entertainment

(CZR) - Get Free Report

are petitioning for Congress to pass federal laws to reinstitute online poker.


adds that states like California are also pushing for online poker legalization, on the state level.

In late 2011 -- well after the U.S. Attorney's case was brought -- the U.S. Justice Department's Office of Legal Counsel issued a legal opinion stating that the 1961 Wire Act prohibited online betting only for sporting events and contests, not Internet games such as poker or lotteries, providing a legal intepretation for future attempts to set up online poker companies in the U.S.

For more on the U.S. District Attorney in Manhattan, see details on

a bank rate fixing inquiry

and the

insider trading conviction of Rajat Gupta

, a former Goldman Sachs board director.

-- Written by Antoine Gara in New York