Fugitive PokerStars Founder Surrendered to US Authorities
Posted: January 27, 2020
Updated: January 27, 2020
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Though all debts are paid, he was still on the run
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Billionaire Isai Scheinberg handed himself in this week
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He's the last of the Black Friday perps
The fugitive PokerStars founder surrendered to US authorities this week. Isai Scheinberg, the founder of the online casino, PokerStars is finally in federal custody after nine years on the lamb. He is charged with bank fraud, money laundering and illegal gambling after being indited by the US Department of Justice.
Introduction: Fugitive PokerStars Founder Surrendered to US Authorities
After the Lithuanian-born Canadian citizen entered the US on a flight from Switzerland, the 73 year old surrendered to authorities at the airport on January 17th. Later in the day, he pleaded not guilty to all charges. After the hearing was adjourned in Manhattan’s Federal Court, Scheinberg was released after posting a $1million bail bond. He also agreed to surrender his port and have his movements restricted to New York and Washington.
Black Friday
He is the last of eleven individuals who have been charged in connection with the so called “Black Friday” indictments. According to Intertops poker online.
Face the Music
But the question on everyone’s lips, is why now? Well, it transpired that the US has already started extradition proceedings against Scheinberg some months back. And though the billionaire initially fought the extradition, his lawyers advised him to face the music by flying to the states.
Risky Move
Before the UIEGA, there was a grey area in which online poker sites were able to operate in within the US. After the gaming act became law, many companies, including online poker sites in the US, like PokerStars and Full Tilt Poker decided to take the risk that these new laws were actually aimed at sports book gamblers rather than online poker players. Well, they were wrong!
s Frozen
On April 15, 2016, The US Department of Justice seized domain names linked to the three networks. This was “Black Friday”. Of course this caused the freezing of player s and balances. FullTilt, PokerStars and Absolute Poker’s CEREUS network were accused of manipulating banks into processing billions of dollars of gambling transactions, thus violating the Unlawful Internet Gambling Enforcement Act. But for gamblers, an even bigger problem was that FullTilt and the CEREUS network had mixed the players funds with their operating cost. This is a huge no-no. It turned out that they didn’t possess enough liquid cash to cover their positions with their players balances.
Ponzi Scheme
The Department of Justice stated that FullTilt had a debt to players of around $390 million, yet only had $60 million in the bank. The U.S. Attorney in Manhattan, Preet Bharara, called it a “Ponzi scheme.” Though Scheinberg had a current and ongoing indictment against him, he agreed to fully pay back all of FullTilts customers to the eye watering tune of $731 million.
A Billionaire
He was to later sell Intertops poker, one of the few sites still left to play in the US.
