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The Black Friday saga may have finally reached its conclusion after PokerStars founder Isai Scheinberg was sentenced to time served and a $30,000 fine by Judge Lewis A. Kaplan in the Southern District of New York on September 23.
The 73-year-old Scheinberg, who had been accused of bank fraud, money laundering, and illegal gambling in 2011 for charges related to the Black Friday incident, had surrendered to the US authorities in January 2020. In March, he pleaded guilty in the US Federal Court to one count of operating an illegal gambling business.
Scheinberg was the last of the 11 individuals accused of charges related to Black Friday. Scott Tom, co-founder of the now-defunct online poker site Absolute Poker (AP), was the 10th member of the Black Friday club to reach a plea deal with prosecutors in June 2017.
Under the United States Sentencing Guidelines, Scheinberg was looking at charges that could get him between 12 and 18 months in prison, but instead received a $30,000 fine and sentencing of time served, which many might feel was nothing more than a slap on the wrist.
The government clarified the reasons behind issuing such a sentence to Scheinberg.
> The chances of Scheinberg repeating his offense is highly unlikely.
> At the time of the indictment, it was discovered that PokerStars had properly segregated player’s funds.
> Prosecutors also wanted to prevent a situation of unnecessary sentencing disparities arising in the case.
> In the aftermath of the Black Friday incident, PokerStars, under Scheinberg’s direction, took on the responsibility of paying out approximately $304 Million of Full Tilt Poker’s liabilities to players. This act was considered a good deed by Acting United States Attorney Audrey Strauss.
In a statement issued to reporters, 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.”
Former Head of Corporate Communications and Global Poker Marketing for PokerStars, Eric Hollreiser also released a statement saying, “Isai made an enormous impact on the poker world through his relentless focus on doing the right thing for players, the right thing for PokerStars employees, and the right thing for his broader community. He built a hugely successful company based upon strong personal values and created an online platform that introduced millions of people to the game. I’m proud to have worked with him and to have contributed to PokerStars’ success. I’m really pleased that Isai can now return to his family life and charitable pursuits.”
In all, 11 people were indicted on that day. With Scheinberg’s sentencing, all defendants have been brought to justice.
The most extended prison term of three years was issued to Payment processor Ira Rubin, while Chad Elie was sentenced to five months. Most of the others were either not incarcerated, or their jail term was very short.
Besides Scheinberg’s sentencing, his son, Mark Scheinberg, who was the co-founder of PokerStars, agreed to forfeit $50 Million to the US government in 2013 that he received as distributions from the operation of the PokerStars and its subsidiaries.