Almost nine years after being charged with illegal gambling, money laundering and bank fraud, the founder of online poker giant PokerStars, Isai Scheinberg has surrendered to federal agents. Landing in New York on January 17th, Scheinberg was taken into custody and pled not guilty to the charges he faces stemming from Black Friday, an infamous date in US poker history. Scheinberg was released on $1 million bail.
The charges against Scheinberg go back to April 2011, also known as Black Friday, when the United States government seized domain names as well as money associated with the top online poker providers at the time. This included PokerStars as well as their competitor Full Tilt Poker.
Full Tilt was unable to repay their players and it was Scheinberg who worked with the United States government to cut a deal to allow PokerStars to acquire the Full Tilt brand and pay back players. While this was facilitated, Scheinberg remained outside the US and evaded capture.
Scheinberg traveled to Switzerland a few months ago and it was at that time that officials in the US began the extradition process, working with the Swiss government within their jurisdiction, to get Scheinberg back in the states. In the beginning, he resisted the process but eventually decided to travel to the US on a voluntary basis. This was of course, after negotiations took place.
It is unclear as to what will happen to Scheinberg. Reports suggest that he will avoid prison time based on the deal he cut, though what the deal entails has not been revealed.
PokerStars Then and Now:
PokerStars was founded in 2001 by Scheinberg and was in operation within the United States when the Unlawful Internet Gaming Enforcement Act was passed in 2006. The site continued to operate after that date until 2011 when Black Friday occurred. After the 2011 charges, the son of Scheinberg, Mark took over the operations of PokerStars.
Three years later, Mark sold the company to Amaya and they then brought the company back into the US via New Jersey, offering online poker gaming to players in the state’s borders. The company now operates in Pennsylvania as well now that the iGaming industry has launched in the state.