The global online poker company, PokerStars’ founder is now surrendering to the US authorities after being accused of bank fraud, money laundering and illegal gambling stemming from 2011’s Black Friday and making headlines in the poker industry!
Isai Scheinberg is the only one of the individuals indicted who is yet to resolve his criminal charges. Scott Tom, co-founder of Absolute Poker was the 10th member of the Black Friday group to come to a plea deal with prosecutors back in June 2017.
Scheinberg was reportedly released on a $1 million bond and he agreed not to escape New York and Washington DC areas while the proceedings are in continuation. He was also made to surrender 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.
Isai, along with his son had founded PokerStars back in 2011. The company’s popularity and consumer base rapidly shot up right after the revolutionary win of Chris Moneymaker at WSOP Main Event in which he secured a seat through an online tournament on the site. In 2005, PokerStars moved their offices to the Isle of Man and went on to host daily online tournaments and cash games like that of partypoker, Absolute Poker and Full Tilt Poker which gained massive success despite being operated in a legally gray area due to the absence of certain laws conferring to the game. Soon after, the US government passed Unlawful Internet Gambling Enforcement Act (UIGEA), stopping offshore poker sites from serving US customers, except partypoker many other poker rooms proceeded to accept deposits from players.
The US authorities initiated an intense crackdown on unauthorised sites back in 2011, seizing domains and freezing players’ balance. Pokerstars, FTP and AP were ordered o shut down and Scheinberg along with top executives and company employees were indicted for multiple charges. The US authorities demanded these companies to repay their users and PokerStars was the only one to abide by the order. FTP and AP had mixed player funds, and failed to repay hundreds of millions of player deposits they owed. The indictees owned up to their crimes but Scheinberg did not agree to the allegations, although he paid $731 million to settle a civil lawsuit with the US government. He went on to escape from the hands of the law enforcement and later Mark sold PokerStars to Amaya Gaming, David Baazov, owner of The Stars Group for $4.9 billion in 2014.
Olga Zverovich, the Assistant US Attorney stated that federal prosecutors and Scheinberg reached an agreement in principle on the basic terms of a plea deal.