Time Served: PokerStars Founder Isai Scheinberg Finally Sentenced
In what will hopefully be the end of a near-decade-long case, former PokerStars boss and owner Isai Scheinberg has been sentenced to time already served by Judge Lewis Kaplan of New York.
The PokerStars founder was charged in relation to his formerly illegal US-facing poker business. The first indictment came way back in 2011, and Mr. Scheinberg has been on the run in Switzerland ever since.
He returned to New York in March for preliminary hearings, and today, he became the last executive from the “Black Friday of online poker” to face charges. In April 2011, the four biggest US-facing online poker sites at the time were slammed with criminal charges, including illegal gambling, bank fraud, and money laundering.
Scheinberg always claimed his innocence of the second two charges. This week, he pleaded guilty to the running of an illegal gambling operation and was sentenced to time served and a $30,000 fine.
The maximum sentence prosecutors were looking for was 18 months. Judge Kaplan must have felt that the six months 71-year-old Mr. Scheinberg had already spent in custody (during a pandemic, nonetheless) must have been enough.
During the trial, Scheinberg’s defense noted the stellar reputation PokerStars enjoyed at the time the charges were filed, even for an illegal company.
As part of a bargain with US Department of Justice officials in 2012, PokerStars bought up the debt of two of its fellow indicted companies – Full Tilt and Absolute Poker.
That deal saw PokerStars shell out nearly $300 million to reimburse Full Tilt customers out-of-pocket. At the time, PokerStars also returned all the money to PokerStars players’ accounts after the sudden shutdown.
“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,” said Mr. Scheinberg in a statement after the trial.
“Indeed, PokerStars reimbursed millions of players who were owed funds from other online companies that could not or did not repay those players,” he finished.
Like Father Like Son
Since the charges against him were filed in 2011, Mr. Scheinberg has not played an active role in the continuing PokerStars brand.
His son, Mark Scheinberg, took over the company and was instrumental in forming a $700 million-plus bargain with prosecutors in 2012.
This was the deal that returned Full Tilt Poker players their account balances and allowed for the possibility of PokerStars entering the legalizing US market in the future.
However, neither Scheinberg will be involved in the rebirth of the PokerStars brand in the US, as they made a triumphant entrance to the newly-legal US markets in 2016.
Mark—and, we must assume, Isai Scheinberg—also profited by selling PokerStars to Canadian company Amaya Gaming for just shy of $5 billion back in 2014.
Today, The Stars Group is owned by UK betting giant Flutter Entertainment. PokerStars is, without a doubt, the biggest online poker brand in the world, and much of that stems from the events of poker’s Black Friday 11 years ago.
With this last sentencing now finished, an ugly chapter in the history of online gambling can hopefully come to a curtain close.
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