Isai Scheinberg Sentenced to Time Served in “Black Friday” Judgment

Isai Scheinberg, the co-founder of online poker giant PokerStars and the last of 11 “Black Friday” defendants to answer to allegations made by the United States Department of Justice, has been sentenced to time served after pleading guilty earlier this year.

Scheinberg, who holds dual Israeli and Canadian citizenship, received the sentence in a U.S. District Court for the Southern District of New York courtroom. Presiding District Judge Lewis A. Kaplan also fined Scheinberg $30,100 for his role in allowing US customers to play online on PokerStars prior to April of 2011.

Scheinberg and his wife appeared in person in the SDNY courtroom after spending several months at a private resort in northern California, under pre-trial conditions approved by the court. Prior to that, the Scheinbergs had stayed at a hotel in New York City, but had needed to be moved elsewhere due to a COVID-19 effectively closing that residential possibility.

Meanwhile, negotiations between SDNY attorneys and Scheinberg’s counsel continued for several months. Scheinberg voluntarily surrendered to US authorities in February, and agreed to plead guilty a month later. The crimes to which Scheinberg pled guilty, including the operation of an illegal gambling enterprise, calculated to a sentencing-guidelines term of 12 to 18 months. 

However, prosecutors agreed with Scheinberg’s attorneys he deserved a more lenient sentence, due not only to his exemplary behavior while in custody, but because he also helped negotiate the asset buyout of a separate Black Friday-impacted site, Full Tilt Poker. That 2012 deal meant that tens of thousands of FTP players received full compensation from their frozen online bankrolls, despite the owners of Full Tilt effectively looting tens of millions of dollars from the site. The deal eventually provided refunds to impacted players of Absolute Poker and its sister site, UB.com (formerly UltimateBet), though that was not a part of the original agreement.

In a pre-sentencing submission, Scheinberg’s lead attorney, Paul Shechtman, noted that Full Tilt Poker CEO Ray Bitar previously received a time-served sentence and actually spent less than a week behind bars, despite the illicit behavior of several Full Tilt execs. Bitar infamously declared that he was dying of a heart condition in what proved to be a successful bid for leniency, though he reportedly remains hale and hearty several years after passing through the US justice system.

According to a courtroom-news service, an unnamed assistant US attorney who was part of the prosecution team agreed with Scheinberg’s long-held assertion that online poker was never explicitly illegal under US law; however, the prosecutor noted that online poker was illegal under the laws of at least a handful of US states, including New York, where the SDNY holds sway. 

Judge Kaplan, in accepting the terms of the plea deal, stated:

“I don't condone what you did but the world is made of fallible people. It was a big mistake but should not ruin what remains of your life.”

Kaplan also promised to assist Scheinberg in retrieving his passport, which Scheinberg willfully surrendered to US authorities when he surrendered in February. Scheinberg is also due the return of nearly $970,000, the remainder of the million-dollar surety bond he posted when he released on bail following his arraignment in February.

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