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PokerStars co-founder, 73-year-old Isai Scheinberg (cover image) accused of bank fraud, money laundering, and illegal gambling in 2011 for charges related to the Black Friday incident, has surrendered to the U.S. authorities. Scheinberg is the last of the 11 individuals accused of charges related to Black Friday who has yet to resolve his criminal charges. Scott Tom, co-founder of the now-defunct operator Absolute Poker (A.P.), was the 10th member of the Black Friday club to reach a plea deal with prosecutors in June 2017.
A few months ago, Scheinberg had visited Switzerland, where federal officials launched an extradition trial against him. He had initially contested the extradition efforts but later decided to voluntarily travel to the U.S. to face the charges. In a hearing conducted on January 17 in Manhattan’s federal court, Scheinberg pleaded not guilty on all charges and was released from police custody on posting a $1 million bail. His travel, for the time being, has been restricted only to New York and Washington, D.C., as he has been made to surrender his passports to the authorities.
Isai and his son Mark Scheinberg had founded PokerStars in 2001, primarily operating the site from Costa Rica and the Isle of Man. Following the passing of the UIGEA (Unlawful Internet Gambling Enforcement Act) in 2006, PokerStars continued to accept American customers, going on to become the largest online poker site in the world. By 2010, the online poker operations of the site were bringing in almost $1.4 billion in revenue every year. In April 2011, the U.S. authorities seized the PokerStars.com domain name and charged Scheinberg and other executives from Full Tilt Poker, and Absolute Poker on multiple counts of fraud and illegal gambling.
PokerStars began operating outside the U.S. after re-acquiring the domain name and paid the U.S. government $731 million to settle the civil lawsuit brought by them against the company. In 2014, Scheinberg sold his stake in PokerStars to Amaya Gaming, a group led by David Baazov for $4.9 billion and had since evaded American authorities.
According to Forbes, Assistant U.S. Attorney Olga Zverovich told a court hearing on Wednesday that Scheinberg had been negotiating with the government for some time. Zverovich said: “We have an agreement in principle on the basic terms.”
The industry watchdogs will be keeping a close eye to see what kind of deal Scheinberg strikes up to settle this pending matter once and for all.