PokerStars founder Isai Scheinberg, is being fined $300,000 and sentenced to time served following his original Black Friday indictment in 2011.
The 74-year-old, who holds dual Canadian and Israeli citizenship, appeared before a New York court in March on charges of an indictment filed in 2011 alleging that he intentionally conducted operations in violation of ‘UIGEA’s’ Unlawful Internet Gambling Enforcement Act.’
After a failed appeal, the PokerStars founder was arrested in Switzerland in June last year and extradited to the US in January this year.
Scheinberg was facing a gaol term of about 12-to-18 months, according to the Inner City News, the only media outlet present at the trial. The accusations of bank fraud and money laundering were, however, dropped as part of a plea bargain. The US District Court for the Southern District of New York, Judge Lewis Kaplan, 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.”
PokerStars, the world’s largest online poker space, was founded in 2001, securing its Isle of Man-based igaming licences and operations. Prior to the Bush-Cheney administration imposing UIGEA as a federal crime in October 2006, PokerStars created its global business enterprise.
UIGEA has made it a federal crime for online firms to ‘knowingly accept’ forms of payment ‘in connection to the participation of another person in unlawful internet gambling.’ Igaming incumbants, however, argued that UIGEA had been blindly embraced as a federal compliance since UIGEA was approved by the Bush-Cheney administration by the passage of the ‘Safe Port Act’ in October 2006-a bill unrelated to gambling rules.
PokerStars, Full Tilt and Absolute will continue to sell their US services, which was met with a 52-page indictment released by the Department of Justice against 11 executives of the three firms, along with a civil suit against the firms.
Judge Lewis Kaplan claimed that, after PokerStars assumed Full Tilt Poker ‘s debts, the custodial sentence was dropped partially due to mitigating factors. This included $184 million in non-US player balances, following its failure in the wake of the Black Friday indictments, after acquiring the company.
PokerStars decided to pay $547 m in forfeitures to the US government in 2012. Scheinberg ‘s son Mark decided in 2013 to surrender an additional $50 million he had earned from operations with PokerStars.
All 11 originally accused, 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 convicted of either misdemeanours or felonies, all pleading guilty.