Isai Scheinberg, the founder of PokerStars, has been issued with a $30,000 fine and sentenced to ‘time served’ following his initial indictment on Black Friday in 2011.
Back in March, the 74-year-old, who holds dual Canadian and Israeli citizenship, appeared before a New York court on charges from an indictment filed in 2011 that alleged that he knowingly ran operations in contravention of the Illegal Gambling Business
The PokerStars founder was arrested in June of last year in Switzerland and came to the US in January of this year voluntarily, after a failed appeal.
According to Inner City Press, the only media outlet present at the hearing, Scheinberg was facing a prison sentence of between 12-to-18 months. However, as part of a plea deal, the charges of bank fraud and money laundering were dismissed. Judge Lewis Kaplan of the US District Court for the Southern District of New York, opted not to impose a custodial sentence.
In a statement to pokerfuse, Scheinberg said: “I am pleased that Judge Kaplan has determined today not to impose a prison sentence in my case. PokerStars played an important role in creating today’s global regulated online poker industry by running an honest and transparent business that always treated its players fairly.
“I am particularly proud that in 2011, when PokerStars exited the US, all of its American players were made whole immediately. Indeed, PokerStars reimbursed millions of players who were owed funds from other online companies that could not or did not repay those players.”
The world’s largest online poker room, PokerStars was founded in 2001, securing its igaming licences and operations based in the Isle of Man. PokerStars established its global business enterprise prior to the Bush-Cheney administration enforcing UIGEA as a federal crime in October 2006.
UIGEA made it a federal crime for online businesses to ‘knowingly accept’ forms of payment ‘in connection with the participation of another person in unlawful Internet gambling’. However igaming incumbents protested that UIGEA had been blindly adopted as a federal enforcement, due to the Bush-Cheney administration approving UIGEA through the passing of the ‘Safe Port Act’ in October 2006 – a bill unrelated to gambling laws.
PokerStars, Full Tilt and Absolute would continue to offer its US services, which was met with a 52-page indictment against 11 executives at the three companies, issued by the Department of Justice, alongside a civil complaint against the companies.
Judge Lewis Kaplan stated that the custodial sentence was dropped partly due to mitigating circumstances, after PokerStars assumed Full Tilt Poker’s debts. This included $184 million in non-US player balances, after acquiring that business, following its collapse in the wake of the Black Friday indictments.
In 2012, PokerStars agreed to pay the US government $547m in forfeitures. In 2013, Scheinberg’s son Mark agreed to forfeit an additional $50m he had received through PokerStars operations.
All 11 originally indicted – specifically Scheinberg plus Raymond Bitar, Scott Tom, Brent Beckley, Nelson Burtnick, Paul Tate, Ryan Lang, Bradley Franzen, Ira Rubin, Chad Elie and John Campos – have all now been sentenced, all pleading guilty to either misdemeanours or felonies.