Isai Scheinberg Issued Lenient Sentence for Black Friday Crimes
The online poker landscape changed on April 15, 2011, when the US Department of Justice indicted PokerStars, Full Tilt Poker, and Absolute Poker. Since that time, we’ve seen the demise of Full Tilt and Absolute Poker and saw some of the industry’s biggest names destroyed due to their involvement in the Black Friday saga.
On Wednesday, that saga officially came to a close with the sentencing of PokerStars found Isai Scheinberg. Scheinberg had been at large since 2011 and just recently returned to the United States to face charges. Ultimately, the good works of PokerStars led to him receiving the minimum sentence possible.
Isai Scheinberg Fined 30k and Sentenced to Time Served
As the founder of the World’s Largest Poker Site, Isai Scheinberg was one of the top defendants for Black Friday. The PokerStars founder has stayed away from the United States since 2011 and only recently returned due to an extradition order. Scheinberg was taken into custody in Switzerland and then agreed to return to the United States.
Back in March, after extensive negotiations between Scheinberg’s lawyer and the government, Scheinberg entered a guilty plea for a single charge of operating an illegal gambling site. That charge carried a sentence of up to 24 months in prison and hefty fines.
However, neither of those things happened. Instead, Federal Judge Lewis A. Kaplan surprised everyone with a sentence of time served and a micro-fine of just $30,000. We say micro-fine because of the amount of money that Scheinberg is worth and the amount of money that PokerStars has raked in over the years.
According to Judge Kaplan, “I don’t condone what you did, but the world is made of fallible people. It was a big mistake but should not ruin what remains of your life.”
Why Was the Court So Lenient?
If you had told us back in 2011, or even as recent as last year, that the courts would issue a lenient sentence, we would have laughed. However, it appears that the government used a little common sense in the matter. Here is what Acting US Attorney Audrey Strauss said regarding sentencing,
“On balance, however, the Government believes that the mitigating factors in this case—particularly the defendant’s low likelihood of recidivism, the fact that PokerStars properly segregated player funds, the need to avoid unwarranted sentencing disparities, and the defendant’s good deeds—warrant a sentence below the Stipulated Guidelines Range.”
It is well known that PokerStars immediately repaid all players after the Black Friday indictments. Most players received their money in two weeks. Later, the company purchased Full Tilt Poker and then repaid those players as well. Full Tilt stole approximately $400 million in deposits from players leading up to Black Friday.
Later, after funds were distributed to Full Tilt players, PokerStars repaid Absolute Poker and UB players their funds lost after the company filed for bankruptcy.
Black Friday Officially Concluded
For better or worse, all of the matters surrounding Black Friday have been concluded. All defendants have pled guilty, and settlements with PokerStars have been reached and paid out. Full Tilt is now part of the Stars Group, and Absolute Poker is now defunct.
Since that time, several US states now offer legal online poker, and there is an interstate network between New Jersey, Delaware, and Nevada. Pennsylvania also offers intrastate online poker. Soon, West Virginia and Michigan will join the ranks of legal states offering legal online casinos and online poker.
Outside of those states, online poker remains either illegal or in a gray area. The DOJ can still opt to prosecute offshore online poker sites but has yet to do so in recent years. Does that mean another Black Friday is on the horizon for sites like Americas Cardroom and Ignition Poker? Only time will tell.