PokerStars founder Isai Scheinberg surrenders to US authorities

Posted On 27 Jan, 2020 0

PokerStars, the global online poker giant is always under the limelight. And now with the Co-founder,  surrendering to the US authorities after being accused of bank fraud, money laundering and illegal gambling stemming from 2011’s Black Friday is once again making headlines.

Scheinberg is the only one of the individuals indicted who is yet to resolve his criminal charges. The Co-founder of defunct operator Absolute Poker (AP) Scott Tom was the 10th member of the Black Friday group to reach a plea deal with prosecutors in June 2017.

Upon the arrival of the 73-year-old to New York City previous Friday, Scheinberg was reportedly released on a $1 million bond and agreed not to move outside the New York and Washington DC areas while proceedings continue. He also surrendered his passport with his release conditions. After traveling to Switzerland, prosecutors from the US Attorney for the Southern District of New York initiated extradition proceedings against him.

Let’s go back into history, Isai alongside his son Mark, founded PokerStars back in 2011. After Chris Moneymaker’s revolutionary WSOP Main Event victory in 2003, securing a seat through an online tournament on the site, the popularity shot up and the company’s customer base rapidly grew. In 2005, PokerStars moved its offices to the Isle of Man and continued to host daily online tournaments and cash games like partypoker, Absolute Poker, and Full Tilt Poker, enjoying massive success despite being operated in a legally gray area due to the absence of specific laws relating to the game. Things changed the following year when the US government passed Unlawful Internet Gambling Enforcement Act (UIGEA), prohibiting offshore poker sites from serving US customers, except partypoker several other poker rooms continued to accept deposits from American players.

In April 2011, the US authorities performed an intense crackdown on unauthorized sites, seizing domains and freezing balance of players. PokerStars, as well as FTP and AP, were ordered to shut and Scheinberg along with the top executives and important employees were indicted for multiple charges. The US department further commanded the companies to repay their customers and PokerStars was the only company to abide by the order. On the other hand, FTP and AP had mixed player funds, failing to repay hundreds of millions of player deposits they owed. The indictees owned their crimes but Scheinberg denied the allegations, though he paid $731 million to settle a civil lawsuit the government had brought against the company. He continued to evade law enforcement and later Mark sold PokerStars to Amaya Gaming, David Baazov, owner of The Stars Group for $4.9 billion in 2014.

The Assistant US Attorney Olga Zverovich told a court hearing on Wednesday that federal prosecutors and Scheinberg had reached “an agreement in principle on the basic terms” of a plea deal. For the latest updates on poker news and tournaments around the world, keep reading GutshotMagazine.com and stay tuned!

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