United States v. Scheinberg
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''United States v. Scheinberg'', No. 1:10-cr-00336 (2011), is a United States federal criminal case against the founders of the three largest online poker companies, PokerStars, Full Tilt Poker and Cereus (Absolute Poker/Ultimatebet), and a handful of their associates, which alleges that the defendants violated the Unlawful Internet Gambling Enforcement Act (UIGEA) and engaged in
bank fraud Bank fraud is the use of potentially illegal means to obtain money, assets, or other property owned or held by a financial institution, or to obtain money from depositors by fraudulently posing as a bank or other financial institution. In many ins ...
and
money laundering Money laundering is the process of concealing the origin of money, obtained from illicit activities such as drug trafficking, corruption, embezzlement or gambling, by converting it into a legitimate source. It is a crime in many jurisdictions ...
to process transfers to and from their customers. A companion civil case, ''United States v. PokerStars, et al.'', 11 Civ. 2564 (2011), included Full Tilt and Cereus as defendants and seeks the recovery of forfeiture equalling approximately $3 billion in assets belonging to the companies. After the indictment was unsealed on April 15, 2011, a date quickly dubbed Black Friday by the online poker community, PokerStars and Full Tilt stopped offering real money play to their United States customers. Three years after the start of the poker boom in 2003, the U.S. Congress passed UIGEA to extend existing gambling laws into cyberspace. The law made processing payments for illegal online gambling a crime; however, the defendant companies remained in the U.S. market in the belief that the law did not cover
poker Poker is a family of comparing card games in which players wager over which hand is best according to that specific game's rules. It is played worldwide, however in some places the rules may vary. While the earliest known form of the game w ...
. A former payment processor for the companies turned state's evidence after initially being charged with violating UIGEA himself. On September 20, the civil suit was amended claiming individual fraud by Howard Lederer,
Chris Ferguson Christopher Philip Ferguson (born April 11, 1963) is an American professional poker player. He has won six World Series of Poker events, including the 2000 WSOP Main Event, and the 2008 NBC National Heads-Up Poker Championship. Ferguson is a ...
and Rafael Furst. The U.S. Department of Justice seized the
.com The domain name .com is a top-level domain (TLD) in the Domain Name System (DNS) of the Internet. Added at the beginning of 1985, its name is derived from the word ''commercial'', indicating its original intended purpose for domains registere ...
internet addresses of the three online gambling sites, replacing them with a
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, but let Full Tilt and PokerStars use them again once they pledged to no longer serve the U.S. About 76 bank accounts in 14 countries were frozen, including an unknown amount of player funds. The prosecutors are seeking jail sentences for the 11 criminal defendants including site founders and executives, U.S. payment processors, and an executive of a small Utah bank, who prosecutors maintain were engaged in an elaborate criminal fraud scheme, using the bank in Utah to mis-code transactions with other banks to bypass UIGEA restrictions.
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officials considered action in the World Trade Organization. The companies ceased their U.S.-facing ad campaigns, resulting in cancellations of poker-themed television shows. In June, Full Tilt's eGambling license was suspended, which halted all of its remaining online play. The Alderney Gambling Control Commission on the British Channel Islands later revoked its license on September 29. On July 31, 2012, US government dismissed "with prejudice" all civil complaints against all PokerStars and Full Tilt Poker companies after coming to a settlement with PokerStars which includes PokerStars purchasing Full Tilt. PokerStars and Full Tilt admitted no wrongdoing as part of the settlement, which ends all litigation between the government and the poker companies. The criminal indictments remain in place for the named individuals.


Background


Growth of poker

In 2003, ESPN expanded its coverage of the World Series of Poker. Between
2003 File:2003 Events Collage.png, From top left, clockwise: The crew of STS-107 perished when the Space Shuttle Columbia disintegrated during reentry into Earth's atmosphere; SARS became an epidemic in China, and was a precursor to SARS-CoV-2; A des ...
and
2006 File:2006 Events Collage V1.png, From top left, clockwise: The 2006 Winter Olympics open in Turin; Twitter is founded and launched by Jack Dorsey; The Nintendo Wii is released; Montenegro 2006 Montenegrin independence referendum, votes to declare ...
, the number of contestants in the $10,000 No Limit Texas hold'em Main Event grew from 839 to 8773. After the UIGEA was passed, the World Series of Poker main event decreased in size, to 6358 players in 2007. In 2015, 6420 players participated.


Changes in gambling laws

On October 13, 2006, the United States Congress passed Unlawful Internet Gambling Enforcement Act of 2006, which makes it a federal offense, punishable by up to five years in prison, for a gambling business to "knowingly accept" payments "in connection with the participation of another person in unlawful Internet gambling." However, according to syndicated columnist
Jacob Sullum Jacob Z. Sullum (born September 5, 1965) is a syndicated newspaper columnist with Creators Syndicate and a senior editor at ''Reason'' magazine. He focuses most of his writings on shrinking the realm of politics and expanding individual choice. ...
, the law did not define or alter the definition of unlawful gambling, which under Federal law only applies to sports betting via the
Wire Act The Interstate Wire Act of 1961, often called the Federal Wire Act, is a United States federal law prohibiting the operation of certain types of betting businesses in the United States. It begins with the text: Several legal opinions and rulin ...
. Nevertheless, Party Poker, at the time the largest provider for U.S. demand, decided to withdraw from servicing the United States poker market. The United States Department of Justice later indicted them for services provided prior to 2006 in violation of the
Wire Act The Interstate Wire Act of 1961, often called the Federal Wire Act, is a United States federal law prohibiting the operation of certain types of betting businesses in the United States. It begins with the text: Several legal opinions and rulin ...
, a case they settled out of court in the hopes of being allowed to serve the U.S. market at a later date. Also in 2006, several other online poker service providers withdrew from the market, including Sportingbet's Paradise Poker, 888 Holdings' Pacific Poker, and the iPoker Network's CD Poker. Several other sites continued to facilitate the demand for online poker in the U.S., which had been growing about 20% per year. A 2006 law passed in Washington state that made it a felony to play online poker was upheld as constitutional by the Washington Supreme Court in September 2010. PokerStars immediately withdrew from Washington's market, and Full Tilt soon followed suit, but both sites continued to provide services to players in the other 49 U.S. states. This case was preceded by a 2009 seizure of $34 million worth of winnings in transit U.S. poker players (q.v.
Southern District of New York action against online poker players #REDIRECT Southern District of New York action against online poker players {{R from other capitalisation ...
).


Basis for the case

Since Federal law says nothing specifically about online poker, or any gambling other than sports betting, Preet Bharara, the U.S. Attorney for the Southern District of New York, bases his case on a New York law that makes it a Class A
misdemeanor A misdemeanor (American English, spelled misdemeanour elsewhere) is any "lesser" criminal act in some common law legal systems. Misdemeanors are generally punished less severely than more serious felonies, but theoretically more so than adm ...
, punishable by up to a year in prison, to run a game of chance where bets are placed within the state. Although none of the sites are actually run out of New York (PokerStars is based on the Isle of Man, Full Tilt Poker is in Ireland and Absolute Poker is from
Costa Rica Costa Rica (, ; ; literally "Rich Coast"), officially the Republic of Costa Rica ( es, República de Costa Rica), is a country in the Central American region of North America, bordered by Nicaragua to the north, the Caribbean Sea to the no ...
), he was able to obtain a felony indictment for UIGEA violations. In addition to the 2006 UIGEA, the defendants were charged with violating the Illegal Gambling Business Act (18 USC 1955). Additionally, in April 2010, the former head of Intabill, a defunct payment processor in
Australia Australia, officially the Commonwealth of Australia, is a Sovereign state, sovereign country comprising the mainland of the Australia (continent), Australian continent, the island of Tasmania, and numerous List of islands of Australia, sma ...
, Daniel Tzvetkoff, was arrested in Las Vegas by the FBI. He was charged with money laundering, bank fraud, and wire fraud. PokerStars and Full Tilt had previously claimed that Tzvetkoff cheated them out of at least $100 million. However, he was quietly let go a few months later in August 2010. He reportedly
turned state's evidence A criminal turns state's evidence by admitting guilt and testifying as a witness for the state against their associate(s) or accomplice(s), often in exchange for leniency in sentencing or immunity from prosecution.Howard Abadinsky, ''Organized C ...
after being threatened with a 75-year prison sentence for alleged UIGEA violations. The indictment also alleged that the executive officers of the sites had sought investment in SunFirst Bank in Utah, which they were using to obtain and pay out player funds by allegedly mis-coding transactions. Although no one was actually being defrauded ''per se'', and money from an otherwise legal operation cannot be "laundered", these actions formed the basis for the fraud and money laundering charges. This case marks only the second time that the Department of Justice has alleged violations of the UIGEA, after the indictment of Daniel Tzvetkoff. A
grand jury A grand jury is a jury—a group of citizens—empowered by law to conduct legal proceedings, investigate potential criminal conduct, and determine whether criminal charges should be brought. A grand jury may subpoena physical evidence or a pe ...
handed down a sealed indictment on March 10, 2011.


Domain name seizure

On April 15, the Department of Justice seized the
.com The domain name .com is a top-level domain (TLD) in the Domain Name System (DNS) of the Internet. Added at the beginning of 1985, its name is derived from the word ''commercial'', indicating its original intended purpose for domains registere ...
internet addresses of the three online gambling sites, a total of five
URL A Uniform Resource Locator (URL), colloquially termed as a web address, is a reference to a web resource that specifies its location on a computer network and a mechanism for retrieving it. A URL is a specific type of Uniform Resource Identifie ...
s: Pokerstars.com, Fulltiltpoker.com, Absolutepoker.com, Ultimatebet.com and UB.com. On April 20, 2011, use of two of the domain names were returned to PokerStars and Full Tilt by the U.S. Attorney's office, "to facilitate the withdrawal of U.S. players' funds held in account with the companies"; in exchange the companies agreed to continue prohibiting United States residents from playing until the case was resolved. Ultimate control of the domains remains in the hands of US Attorney's office. Because the charges against Absolute Poker and UltimateBet represent a much larger percentage of its revenues, their survival is in jeopardy. However, Cereus did eventually reach an agreement by which funds could be returned to United States players. On July 31, 2012, US government dismissed "with prejudice" all civil complaints against all PokerStars and Full Tilt Poker companies after coming to a settlement with PokerStars which includes PokerStars purchasing Full Tilt. PokerStars and Full Tilt admitted no wrongdoing as part of the settlement, which ends all litigation between the government and the companies. The criminal indictments remain in place for the named individuals.


Accounts seized

About 76 bank accounts in 14 countries were then frozen, preventing players from accessing balances held by the companies, according to the FBI's New York office. That Full Tilt and Pokerstars accepted a total of $500 million in total player deposits is a conservative estimate.


Persons indicted

The indictment named eleven individuals who were each charged with four crimes. The persons named in the indictment are: *
Isai Scheinberg Isai Scheinberg ( he, ישי שיינברג; born 1946 or 1947) is the Lithuanian Jewish founder of the PokerStars online poker site. Scheinberg previously had been a senior programmer for IBM Canada. Biography In about 1986, Scheinberg left Is ...
, founder of PokerStars *Paul Tate, Director of Payments for PokerStars *Raymond Bitar, CEO of TiltWare - software company for Full Tilt Poker *Nelson Burtwick, Directory of Payments TiltWare (current)- software company for Full Tilt Poker. Past Director of Payments for PokerStars *Scott Tom, part owner of Absolute Poker *Brent Beckley, Director of Payments and Risk Management at Absolute Poker (as of 2007) *Ryan Lang, payment processor *Ira Rubin, payment processor *Bradley Franzen, payment processor *
Chad Elie ''United States v. Scheinberg'', No. 1:10-cr-00336 (2011), is a United States federal criminal case against the founders of the three largest online poker companies, PokerStars, Full Tilt Poker and Cereus (Absolute Poker/Ultimatebet), and a han ...
, payment processor *John Campos, Vice chairman of the board and part-owner of SunFirst Bank The prosecutors are seeking jail sentences for the indicted executives and $3 billion from the poker companies. When the U.S. Department of Justice pursued Party Poker in 2006, it led to a $300 million plea agreement by PartyGaming co-founder Anurag Dikshit and a $105 million settlement with the company itself in 2009. In the criminal case, "The maximum penalty for violation of the UIGEA and operating a gambling business is 5 years in prison and a fine of $250,000 or twice the gross gain or loss for each charge, for conspiracy to commit wire fraud is 30 years in prison and a fine of $1 million or twice the gross gain or loss, and for money laundering conspiracy is 20 years in prison and a fine of $500,000 or twice the amount laundered."


Government position

Preet Bharara, the
United States attorney for the Southern District of New York The United States Attorney for the Southern District of New York is the chief federal law enforcement officer in eight New York counties: New York (Manhattan), Bronx, Westchester, Putnam, Rockland, Orange, Dutchess and Sullivan. Establishe ...
, expressed his view when the indictment was unsealed:
As charged, these defendants concocted an elaborate criminal fraud scheme, alternately tricking some U.S. banks and effectively bribing others to assure the continued flow of billions in illegal gambling profits. Moreover, as we allege, in their zeal to circumvent the gambling laws, the defendants also engaged in massive money laundering and bank fraud. Foreign firms that choose to operate in the United States are not free to flout the laws they don't like simply because they can't bear to be parted from their profits.
FBI Assistant Director-in-Charge Janice K. Fedarcyk added:
These defendants, knowing full well that their business with U.S. customers and U.S. banks was illegal, tried to stack the deck. They lied to banks about the true nature of their business. Then, some of the defendants found banks willing to flout the law for a fee. The defendants bet the house that they could continue their scheme, and they lost.
In the amended complaint the government alleged that "Full Tilt Poker did not maintain funds sufficient to repay all players, and in addition, the company used player funds to pay board members and other owners more than $440 million since April 2007." Furthermore, the amended complaint uses the term
ponzi scheme A Ponzi scheme (, ) is a form of fraud that lures investors and pays profits to earlier investors with funds from more recent investors. Named after Italian businessman Charles Ponzi, the scheme leads victims to believe that profits are comin ...
prominently, including in its title. A lawyer for Ferguson has denied the allegations, suggesting that the issues may have been the result of mismanagement not malice. A lawyer for some of the defendants issued a press release stating that the phrase ponzi scheme was inaccurate, unfair and disingenuous and that its use was counterproductive. The parties reached a settlement on July 31, 2012, ending all litigation between the government and the PokerStars/Full Tilt companies.


Player response

"Along with everyone else in the poker world, I'm shocked," said Brandon Adams, a poker professional who has appeared in televised tournaments on NBC and ESPN. "The expectation was that there would be warning signs. These sites went from multibillion-dollar enterprises to on the ropes overnight." He added: "Some players have literally millions of dollars in their online poker accounts." The
Poker Players Alliance The Poker Players Alliance (PPA) is an American nonprofit Interest group formed to emphasize the rights of poker players, and to protect the players' liberties." The PPA formed to serve as an advocacy group to Washington to establish rights and p ...
called upon poker players affected by the shutdown to contact their Congressional representatives. Poker player and then-current
U.S. Congressman The United States House of Representatives, often referred to as the House of Representatives, the U.S. House, or simply the House, is the lower chamber of the United States Congress, with the Senate being the upper chamber. Together they ...
Barney Frank, in an interview with ''
The Hill ''The'' () is a grammatical article in English, denoting persons or things that are already or about to be mentioned, under discussion, implied or otherwise presumed familiar to listeners, readers, or speakers. It is the definite article in ...
'', lamented that the Justice Department is more focused on prosecuting online poker sites than those responsible for the
mortgage crisis The United States subprime mortgage crisis was a multinational financial crisis that occurred between 2007 and 2010 that contributed to the Financial crisis of 2007–2008, 2007–2008 global financial crisis. It was triggered by a large decline ...
and financial meltdown. In an editorial in the '' Washington Post'', poker player and former
U.S. Senator The United States Senate is the upper chamber of the United States Congress, with the House of Representatives being the lower chamber. Together they compose the national bicameral legislature of the United States. The composition and powe ...
Alfonse D'Amato Alfonse Marcello D'Amato (born August 1, 1937) is an American politician born in Brooklyn, Kings County, New York. He served as United States Senator for New York between 1981 and 1999. He subsequently founded a lobbying firm, Park Strategies. ...
, a long-time favorite of industry lobbyists, wrote: "This is an attack on Internet poker and American poker players like me. Through these strong-arm tactics, prosecutors think they can ban Internet poker. Instead, they are making millions of Americans victims in an attempt to make online poker illegal without the support of legislators or the public." He called on President Barack Obama to rein in the prosecuting attorneys in the Southern District of New York.


International response

Antigua and Barbuda Antigua and Barbuda (, ) is a sovereign country in the West Indies. It lies at the juncture of the Caribbean Sea and the Atlantic Ocean in the Leeward Islands part of the Lesser Antilles, at 17°N latitude. The country consists of two maj ...
officials considered action in the World Trade Organization (WTO) saying that the United States violated global trade law by shutting down Internet gambling sites. Antigua and Barbuda have previously brought suit against the United States successfully with the WTO when it awarded monetary damages for violating international agreements on trade in services by prosecuting the operators of offshore internet gambling sites. Online poker is the second largest industry in Antigua's economy. Mark Mendel, the
Caribbean The Caribbean (, ) ( es, El Caribe; french: la Caraïbe; ht, Karayib; nl, De Caraïben) is a region of the Americas that consists of the Caribbean Sea, its islands (some surrounded by the Caribbean Sea and some bordering both the Caribbean Se ...
government's legal adviser, told Reuters: "I don't think there's another country in the world that puts people in jail for engaging in trade that's lawful under international law. It's as if Antigua would put Americans in jail for selling pineapples." On June 29, the Alderney Gambling Control Commission (AGCC) suspended Full Tilt's license as a result of an investigation that arose after earlier federal indictments in New York, accusing company executives and associates of bank fraud, money laundering and other crimes. The license is suspended pending a July 26 hearing in London. Immediately following the suspension, the companies real money completely ceased operations. The actions by the AGCC mandated the cessation of the following: *Registering new customers *Accepting deposits from existing customers; *Allowing existing customers to withdraw funds that are held in their accounts; and *Permitting customers to participate in any form of poker game play or gambling transaction. Various sources report that this opened the way for Jack Binion to buy Full Tilt and ensure all Full Tilt Poker players get refunded in the process. On June 30, European investors agreed to provide capital to repay Full Tilt Players in exchange for a majority stake in the company. On July 26, the hearing revealed that Full Tilt owed () in overdue licensing fees to the AGCC, which Full Tilt paid within seven days as promised clearing the way for approval of a refinancing deal. The hearing was suspended until no later than September 15 as a result of the revelation. The delay until September 15 offers Full Tilt a chance to complete its negotiated settlement. On September 29, the AGCC stripped Full Tilt of its license. The AGCC's statement said that Full Tilt had misrepresented its financial situation, while Full Tilt said the action would jeopardize its ability to repay its customers.


Economic impact

Prior to the indictments, the United States accounted for 25 to 40% the poker business for these companies. For PokerStars the International business share was 70 to 75% and for Full Tilt it was 50 to 60%, according to one source.
Darren Rovell Darren Rovell (born June 30, 1978) is a sports business analyst who works for The Action Network. He previously worked for ESPN. Early life and education He attended and graduated cum laude from Northwestern University in Evanston, Illinois, i ...
cites a source that says the three companies had a 95%
market share Market share is the percentage of the total revenue or sales in a market that a company's business makes up. For example, if there are 50,000 units sold per year in a given industry, a company whose sales were 5,000 of those units would have a ...
in online poker in the United States. The companies combined for an estimated
US$ The United States dollar (symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the official ...
200 million in advertising and marketing in the United States and their withdrawal from the U.S. market left
network show A television broadcaster or television network or is a telecommunications network for distribution of television show, television content, where a central operation provides programming to many television stations, pay television providers or, ...
s such as '' Poker After Dark'' and '' The Big Game'' without advertising sponsors. On cable television, ESPN's contract with PokerStars was for $22 million. ESPN withdrew its Pokerstars advertising. On Sunday April 17, ESPN2 cancelled its scheduled broadcast of 2011 North American Poker Tour presented by PokerStars.net. On
Game Show Network Game Show Network (GSN) is an American basic cable channel owned by Sony Pictures Television. The channel's programming is primarily dedicated to game shows, including reruns of acquired game shows, along with new, first-run original and revive ...
, prepaid episodes of ''
High Stakes Poker ''High Stakes Poker'' is an American cash game poker television program. The poker variant played on the show is no limit Texas hold 'em. The first four seasons ran from January 16, 2006 to December 17, 2007 on GSN. The next three seasons ran fr ...
'' continued to air for several months after the event, but the show was in danger of not returning. The companies accounted for a large proportion of World Series of Poker qualifiers via online satellites. As a result, the
2011 World Series of Poker The 2011 World Series of Poker was the 42nd annual World Series of Poker (WSOP). The WSOP is the most prestigious poker tournament in the world with the winner of the Main Event considered to be the World Champion. It was held at the Rio All Suit ...
main event had the highest percentage of foreign players (and lowest percentage of American players) in history with 2,265 foreign players. Wynn Resorts allied with PokerStars on March 25 to seek the legalization of Internet gambling in the U.S., but terminated the accord on April 15. U.S. citizens who play online poker for a living effectively lost their livelihoods due to the DOJ action.
Pokernews PokerNews is a website dedicated to providing poker industry news, live tournament coverage, strategy, player interviews and videos, podcasts, and information on bonuses and freeroll tournaments available at online poker rooms. It is run by iBus ...
pointed out a thread on the
Two Plus Two Two Plus Two Publishing is a private company established and owned by statistician and poker player Mason Malmuth. The company publishes books on poker and gambling written by professionals in the field such as David Sklansky, Dan Harrington, Bill ...
forums where the
PPA PPA may refer to: Biomedical * ''Palpatio per anum'', Latin medical term for a rectal examination * Parahippocampal place area located within the parahippocampal gyrus * Phenylpropanolamine * Primary progressive aphasia Organizations * Pakistan ...
asked players to share their stories. Among the poker networks seen as potential destinations for U.S. Poker players looking for a new online home are Carbon Poker and
DoylesRoom Doyles Room was an online poker room created in 2004. The site was named after Doyle Brunson, a poker professional. In October 2011, Americas Cardroom acquired Doyles Room. Brunson had recently cut ties with Doyles Room following the domain seizures ...
. According to Brandon Adams, live poker gambling at casinos might be a short-term beneficiary of the crackdown, but often online and live poker are not competitive but complementary, with players honing their skills in cheap, fast games online before gaining the nerve to play for higher stakes at a casino. According to '' Time'', the opposition to legalized domestic online gambling is depriving the United States economy from a huge potential source of tax revenues. One political action committee that received approximately $300,000 from PokerStars returned the money. On April 26, PokerStars began processing cashouts. On May 4, Blanca Gaming of Antigua, the parent company to UB and Absolute Poker who had already laid off 95% of its employees, decided that it would have to pursue
bankruptcy Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor ...
. On May 6, Pokerstars augmented their cashout policies to allow players to cashout frequent player points and pro-rata portions of partially earned VIP rewards bonuses. On May 27, the Department of Justice unfroze an Irish account containing more than one-third of the more than $100 million that was owed to players. The account belonged to Full Tilt and its co-founder, Raymond Bitar. This was one of nine frozen Irish accounts. Full Tilt Poker had failed to uphold its promise to return U.S. Poker players by May 15, following the April 15 events. As a result, Full Tilt Pro Phil Ivey announced he would not be playing the
2011 World Series of Poker The 2011 World Series of Poker was the 42nd annual World Series of Poker (WSOP). The WSOP is the most prestigious poker tournament in the world with the winner of the Main Event considered to be the World Champion. It was held at the Rio All Suit ...
and suing Full Tilt. Ivey voluntarily withdrew the suit on June 30.


Arrests

John Campos and Chad Elie were arrested on Black Friday. Campos is part-owner and vice chairman of the board of directors for SunFirst Bank. On Monday, April 18, Campos, of St. George, Utah, appeared in a Utah court, but did not enter a plea. He was released on $25,000 bond, ordered to surrender his passport and to appear in a New York court for his next appearance. Chad Elie, of Las Vegas, made his first court appearance in Manhattan on Tuesday April 19. He was released on $250,000 bail. Bradley Franzen made a court appearance in Manhattan on Monday April 18, entering a plea of 'not guilty' to the nine counts listed on his indictment, including bank fraud and money laundering charges. Franzen's bail was set at $200,000, for which his parents' house was used as collateral. Franzen pleaded guilty in a New York court on May 23, 2011. It is not known when he will be sentenced; however, it appears that Franzen struck a plea agreement with prosecutors, in which he agreed to cooperate in the probe, in return for which prosecutors would recommend leniency. Most of the other named defendants were out of the country. Ira Rubin, indicted on illegal gambling, fraud, and money laundering charges was arrested on Monday, April 25, 2011, in Guatemala. He made his initial court appearance in Miami on April 27, and was remanded in custody to his next appearance on April 29. Ray Bitar surrendered to authorities on July 2, 2012. Isai Scheinberg surrendered to authorities upon landing in New York on January 17, 2020. Scheinberg surrendered his passports, posted a $1 million bond, and was released with orders to remain in the New York area. He was the last of the 11 original defendants to face his charges in the US. In September 2020, Scheinberg was sentenced to pay a fine of $30,000 with no jail time.


Convictions

On December 20, 2011, Absolute Poker co-founder Brent Buckley pleaded guilty to misleading banks. The plea deal calls for him to receive a sentence between a year and a year and a half in prison. Sentencing was set for April 19, 2012. Buckley was sentenced to 14 months. On January 17, 2012, Ira Rubin entered a plea agreement in a Manhattan federal court in front of US Magistrate Judge Gabriel Gorenstein. Rubin agreed to plead guilty to three of the nine counts of conspiracy to commit bank fraud he faced and was expected to be sentenced to 18–24 months of prison. He received a three-year sentence. Judge Kaplan said, "You are an unreformed con man and fraudster," and calling his actions a "brazen" defiance of US law. "A significant sentence is necessary to protect the community." John Campos pleaded guilty in March 2012 to a single misdemeanor bank gambling charge. He was sentenced in June to three months in prison. During his plea, Campos said his processing of the gambling proceeds for PokerStars and Full Tilt Poker was not in return for a $10 million investment in the bank.Associated Press: Ex-Utah exec gets 3 months in NY poker case
/ref>


References

{{reflist, colwidth=30em


External links


April 11 press release of IndictmentSeptember 20 press release of amended complaintPokerstars U.S. Player FAQ
United States District Court for the Southern District of New York cases United States computer case law United States gambling case law Online gambling Poker and society 2011 in United States case law 2011 in poker 2011 in American television 2011 controversies in the United States