Federal prosecutors have accused two top poker players and troubled gambling site Full Tilt Poker of running "a massive Ponzi scheme" that defrauded players out of $440m.

Manhattan attorney Preet Bharara filed legal papers on Tuesday accusing Full Tilt Poker of improperly using funds from its online poker players to pay members of its board of directors, including professional poker players Howard Lederer and Christopher "Jesus" Ferguson.

"Full Tilt was not a legitimate poker company, but a global Ponzi scheme," Bharara said in a statement.

Full Tilt "cheated and abused its own players to the tune of hundreds of millions of dollars", and "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", said Bharara.

The government alleges that Full Tilt executives misled the website's players, telling them the money the company was supposed to be holding in their accounts was safe.

"In reality, Full Tilt Poker did not maintain funds sufficient to repay all players, and, in addition, the company used player funds to pay board members and other owners more than $440m since April 2007," Bharara said.

British regulators suspended Full Tilt's licence earlier this year.

The firm is regulated from Alderney, in the Channel Islands, by the Alderney Gambling Control Commission. The commission acted after US authorities charged the founders of the US's three largest online poker sites with bank fraud, money laundering and illegal gambling offences.

According to US prosecutors, Full Tilt and rivals Absolute Poker and PokerStars were engaged in a criminal scheme to trick or bribe banks in order to facilitate the flow of billions in illegal gambling profits.

Last week a consumer group from Quebec filed a lawsuit against Full Tilt Poker seeking restitution for Canadian players who cannot access their accounts.