- PokerStars founder Isai Scheinberg was sentenced to pay a $300,000 fine rather than receive prison time for breaking the laws of the UIGEA from charges brought against him in 2011.
- The ten other people indicted for the Black Friday 2011 UIGEA crimes pled guilty and were all sentenced for their individual cases.
NEW YORK – It happened in 2011 and nine years later it has finally reached its conclusion as Isai Scheinberg, the founder of PokerStars, avoids jail time and instead is sentenced to pay a fine of $300,000.
The original indictment that was issued in 2011 in New York against the now 74-year-old Scheinberg stated that he went against the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) and continued to operate his famous online poker room business while knowingly breaking the law to do so.
What Happened?
After the indictment, Scheinberg who is both a citizen of Canada and Israel, jumped ship to Switzerland.
In June 2019, he was arrested in Switzerland based on his crimes in the U.S. and was sent back to appear before the court in January 2020. In March, he made his first appearance in court to face the charges against him after trying and failing to appeal them in 2019 while out of the country.
The charges against Scheinberg included bank fraud and money laundering which can be directly tied into the UIGEA laws he broke.
Judge Lewis Kaplan chose not to sentence Scheinberg to what could’ve been a 12-18-month sentence and instead ordered him to pay a $300,000 fine and “time served” from the incidents of what has been called Black Friday 2011.
“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,” said Scheinberg.
“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 Damage Of Black Friday 2011
PokerStars rose to the top of the online poker game after its start in 2001. They did business without issue for five years until the UIGEA was formed in 2006.
Rather than follow this new set of laws regarding his business, Scheinberg continued to run things as he normally did which is how the problem began. Eleven different people were indicted on Black Friday for crimes involving the UIGEA.
PokerStars along with Full Tilt and Absolute, all online gambling platforms, were part of the 52-page indictment drawn up by the Department of Justice naming the eleven people under investigation. A civil complaint was also attached to all three businesses.
Everyone but Scheinberg pled guilty to their charges ranging from misdemeanors to felonies and each was sentenced accordingly. The ten others of the eleven indicted were Raymond Bitar, Scott Tom, Brent Beckley, Nelson Burtnick, Paul Tate, Ryan Lang, Bradley Franzen, Ira Rubin, Chad Elie, and John Campos.
Judge Kaplan said his leniency in sentencing Schienberg came about for a number of reasons. For one, he paid off the $184 million debt of Full Tilt because PokerStars acquired the company before it’s demise, for all non-US player balances.
He also paid $547 million in forfeitures to the United States government in 2012 and his son Mark decided to give back $50 million in funds he made with PokerStars.
All of these acts of good faith and honoring debts is what led to no prison time and a $300,000 fine for PokerStars founder Isai Scheinberg, thus putting an end to the nine-year saga for the 74-year-old.