Just Short of a Decade Later, PokerStars Case Comes to a Full ClosePublished March 30, 2020 by Lee R
PokerStars now officially can move on from the black eye to its reputation that it has been working to distance itself from.
After a scandal that has stretched into nearly a decade, the other shoe has dropped at PokerStars.
An Ominous Shadow
Even while running successful operations in various jurisdictions in the well-known attempt to move on from an ugly incident in 2011, the Poker Star still had remained unresolved—until now.
Brought to Bear
That's because on Wednesday, the well-known operator's founder Isai Scheinberg finally admitted to running the illegal online gambling business for which he and other online poker executives were indicted by New York prosecutors in March 2011.
The Original Charges
Along with 10 other principals, Scheinberg was originally indicated by federal prosecutors in New York for bank fraud, money laundering and illegal gambling, with the other executives previously pleading guilty and sentenced. The PokersStars organisation itself promptly agreed back in 2012 to pay $731 million to settle the charges with the Justice Department, without admitting wrongdoing.
Now 73 years old, the dual Canadian and Israeli national Scheinberg was not captured until 2019 in Switzerland, before being extradited to the United States the following January, only after dropping the extradition challenge.
Facing charges carrying a maximum of five years in prison, prosecutors have reportedly agreed to seek a sentence of 12 to 18 months.
PokerStars Spokesman Speaks
As the waiving of extradition might indicate, Scheinberg was pleased to put the matter behind him, as confirmed be a spokesman.
The spokesman's statement added that “all PokerStars players were paid back immediately and Mr. Scheinberg played an important role in ensuring that all of the players from other sites were repaid as well.”
According to prosecutors in the Manhattan office of District Attorney Preet Bharara, the key violation that the charges stemmed from was the illegal circumvention by the three online poker companies of a 2006 law barring banks from processing payments to offshore gambling websites, a costly corner-cutting measure which manifests as blatant money-laundering: good someone still had the $731 million around.