After pleading guilty on Wednesday in a New York federal court to charges of running a multimillion-dollar unlawful internet gambling business, PokerStars founder Isai Scheinberg now faces the possibility of five years in prison when he’s eventually sentenced.
The plea comes two months after 73-year-old Scheinberg, a duel citizen of Canada and Israel, originally surrendered to US authorities and was released on $1 million bail after initially pleading not guilty to all charges. In January, Scheinberg was in US custody after being arrested in Switzerland in June. He initially chose to fight extradition before agreeing to come to New York, but on Wednesday, he pled guilty before US Magistrate Judge Sarah L. Cave; the announcement came from Geoffrey S. Berman, the US Attorney for the Southern District of New York.
According to a press release from the Department of Justice, Congress is recommending the maximum penalty and Judge Lewis A. Kaplan will ultimately decide Scheinberg’s punishment at a later date.
Scheinberg, along with 10 other executives of other major online poker rooms, were charged with bank fraud, money laundering and illegal gambling in April 2011, on a day known in poker circles as “Black Friday,” when the Government seized domain names and funds of online poker rooms that still operated in the US after the Unlawful Internet Gaming Enforcement Act 2006 was passed, which made it a federal crime for gambling businesses to “knowingly accept” most forms of payment “in connection with the participation of another person in unlawful Internet gambling.” For almost nine years, Scheinberg stayed out of the US and continued to operate his business, with headquarters in the Isle of Man. Now with Scheinberg’s guilty plea, all 11 charged have done the same.
In 2014, the Scheinbergs sold the company to Amaya for $4.9bn. The company has since partially re-entered the US in the now legal and regulated New Jersey and Pennsylvania markets.
