PokerStars founder Isai Scheinberg, 74, walked out of a New York federal courtroom a free man on Wednesday. Judge Lewis A. Kapan sentenced the Lithuanian-born Canadian citizen to time served and fined him $30,000 for operating an illegal online gaming business — chump change for a man who sold that business for $4.9 billion.
“I don’t condone what you did, but the world is made of fallible people,” said Kapan, as reported by Inner City Press. “It was a big mistake, but should not ruin what remains of your life.”
Scheinberg pleaded guilty to the single illegal gambling charge in March as part of a plea deal that saw more serious counts of bank fraud and money laundering dropped. Still, the online poker pioneer could have faced a prison sentence of between 12 and 18 months.
Scheinberg was the last of 11 individuals charged by federal authorities in April 2011 for illegally facilitating online poker transactions in the US, the so-called Black Friday Indictments.
Black Friday’s Last Chapter
Federal prosecutors launched proceedings to extradite Scheinberg from Switzerland late last year. Forbes reported that the septuagenarian fugitive initially contested the extradition effort, but in January voluntarily decided to travel to the US to face the music.
He surrendered his passport, posted a $1 million bond, and agreed not to leave the New York area until his sentencing.
In opting for leniency, the judge considered Scheinberg’s “good deeds” in the immediate aftermath of Black Friday, when the Department of Justice shut down PokerStars, FullTilt, and CEREUS, the biggest online poker operators in the American market.
The DOJ exposed serious financial mismanagement at Full Tilt and the indictments precipitated the company’s collapse, owing its players millions. PokerStars agreed to assume Full Tilt’s debts, including $184 million in non-US player balances.
It also agreed to settle a civil forfeiture and civil money laundering action, which saw it pay out $547 million to the DOJ. This fund was used to repay Full Tilt’s US customers, as well as some of CEREUS’s.
PokerStars Reimbursed Millions
Nine years later, it looks like money well spent for Scheinberg, who exited the business when it was sold to Amaya Gaming, now The Stars Group, in 2014.
“I am pleased that Judge Kaplan has determined today not to impose a prison sentence in my case,” Scheinberg said in a statement.
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,” he added.
“I am particularly proud that in 2011, when PokerStars exited the United States, 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.”
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