Introduction: Isai Scheinberg Pleads Guilty
The US Attorney, Geoffrey Berman announced on Wednesday last, that Scheinberg offered up a guilty plea to running an illegal online gambling site. Scheinberg had managed to evade justice for over 9 years, as he hopped from country to country. Eleven years ago, the gambling industry was rocked by the poker scandal that came to be daubed, “Black Friday”. Eleven people were charged that day according to the online poker news in the US.
Now that he’s pleaded guilty doesn’t let him off the hook. Right now, Scheinberg is looking at around 5 years in the slammer. The US Attorney has declined to say when the Judge, Lewis A. Kaplan will pass the final sentence. Scheinberg was the final of all the defendants to plead guilty as all of them admitted their guilt.
Ten Years Running
It was ten years ago that the eleven defendants were charged in connection with operating and providing fraudulent payment processing services to three of the largest online poker companies in the US. These companies were, PokerStars, Full Tilt Poker, and Absolute Poker. The charges included operating illegal gambling sites and other unspecified crimes. As the US Attorney said in a press statement, “As Isai Scheinberg’s guilty plea today shows, the passage of time will not undermine this Office’s commitment to holding accountable individuals who violate U.S. law.”
The Attorney went on to say, that by pleading guilty, Scheinberg knew that he was, in fact, operating an online poker site in violation of both New York and federal law. And yet despite knowing this, he continued to operate for years without consequence. His fellow conspirators all received less than three years behind bars.
On April 15th, 2011, the feds seized the domain names and assets of PokerStars, Full Tilt Poker, and Cereus. Scheinberg and others were charged with bank fraud, money laundering, and violating the Unlawful Internet Gambling Enforcement Act. Scheinberg immediately left the country. Whilst he was away, the company settled with the US Department of Justice on the civil charges related to the case. PokerStars ended up paying $731 million in 2012 in order to keep hold of their assets and also those belonging to Full Tilt Poker. At the time of the arrest, Full Tilt Poker was actually a competitor to PokerStars. But it transpired that Full Tilt had outstanding debts to players in the magnitude of $400 million, and yet only had $60 in the bank. The deal with PokerStars allowed these player debts to be settled.
Isai Scheinberg’s Arrest and Extradition,
Finally, on June 7th, 2019, Scheinberg was arrested in Switzerland. Bu October, a Swiss court ordered his extradition back to the US. After a number of appeals, it appeared that there was only one solution. And so he returned to face the music on Jan 17th, 2010. After an initial arrest, he was released on a $1 million bond and gave up his passport. His traveling was limited to the Southern and Eastern Districts of New York, as well as Washington DC, so as he could meet up with his attorneys.
Stars Now Seeking Mega-Merger
Scheinberg and his son, Mark, managed to sell PokerStars to the Amaya Group in 2014 for a total of $4.9 billion. The company is now listed on the Canadian stock exchange and the company is known as the Stars Group. This allowed the new company to return to the US in 2016. From here they launched online poker in New Jersey. They have since opened up in Pennsylvania. The Stars Group has been rapidly expanding into sports betting markets, often in partnership with the Fox media empire. Just last year, the Stars Group, along with Flutter Entertainment, which is the owner of Betfair and fanDuel, made a massive $12.2 billion merger. Anyhow, you can still find online gambling sites in the US who aren’t found guilty.