PokerStars Founder Pleads Guilty

  Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that ISAI SCHEINBERG, the founder and former executive of PokerStars, an online poker company, pled guilty today to running a multimillion-dollar unlawful internet gambling business.  SCHEINBERG pled guilty before U.S. Magistrate Judge Sarah L. Cave.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “Ten years ago, this Office charged 11 defendants who operated, or provided fraudulent payment processing services to, three of the largest online poker companies then operating in the United States – PokerStars, Full Tilt Poker, and Absolute Poker – with operating illegal gambling businesses and other crimes.  As Isai Scheinberg’s guilty plea today shows, the passage of time will not undermine this Office’s commitment to holding accountable individuals who violate U.S. law.” 

As alleged in the Indictment filed in March 2011 in Manhattan federal court, PokerStars was founded in approximately 2001, with headquarters in the Isle of Man.  PokerStars offered online poker games to players around the world, including in New York, New York.  SCHEINBERG was PokerStars’ founder and principal.  On October 13, 2006, the United States enacted the Unlawful Internet Gambling Enforcement Act (“UIGEA”), making 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.”  With the enactment of UIGEA, leading internet gambling businesses – including the leading internet poker company doing business in the United States at that time – terminated their United States operations.  However, PokerStars, along with Full Tilt Poker and Absolute Poker, continued illegally to make internet poker available to U.S. customers through March 2011.  

In pleading guilty today, SCHEINBERG admitted that he knew operating a business that offered internet poker to New Yorkers violated state law, and that it was the clear position of the U.S. government that offering online poker in the United States violated federal law.  Nonetheless, Scheinberg decided to continue running his multimillion-dollar online poker business in the United States. 

In 2012, PokerStars and its related companies (the “PokerStars Companies”) agreed to settle a civil forfeiture and civil money laundering action brought by the Office.  That settlement involved, among other things, the PokerStars Companies forfeiting $547 million to the United States and assuming approximately $184 million in foreign player liabilities of another online poker company subject to the settlement.  Additionally, in June 2013, Mark Scheinberg, ISAI SCHEINBERG’s son, agreed to forfeit to the United States an additional $50 million of distributions he received from the operation of the PokerStars Companies.

SCHEINBERG, 73, a dual Canadian and Israeli national, was arrested in Switzerland on June 7, 2019, based on the U.S. charges.  In early October 2019, SCHEINBERG was ordered to be extradited to the United States by the Swiss Federal Office of Justice, a decision he initially appealed.  SCHEINBERG subsequently withdrew his appeal and surrendered to U.S. federal agents on January 17, 2020.  He was arraigned before United States Magistrate Judge Katharine H. Parker on the same day.

SCHEINBERG pled guilty to one count of operating an illegal gambling business, in violation of 18 U.S.C. § 1955.  SCHEINBERG faces a maximum sentence of five years in prison.  He is scheduled to be sentenced by United States District Judge Lewis A. Kaplan on a date to be determined.

The maximum sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentence for the defendant will be determined by the judge.

Mr. Berman thanked the Federal Bureau of Investigation and Homeland Security Investigations for their outstanding work and perseverance in the investigation and prosecution of this case, and Swiss authorities and the Department of Justice Criminal Division’s Office of International Affairs for their assistance with SCHEINBERG’s arrest and extradition proceedings.

With SCHEINBERG’s guilty plea, all 11 defendants – including Raymond Bitar, Scott Tom, Brent Beckley, Nelson Burtnick, Paul Tate, Ryan Lang, Bradley Franzen, Ira Rubin, Chad Elie, and John Campos – originally charged in the Indictment have now pled guilty.  All but SCHEINBERG have been sentenced.

This matter is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant U.S. Attorneys Olga Zverovich, Sarah Lai, and Jason Cowley are in charge of the prosecution.

Seven Defendants Charged In Manhattan Federal Court With Committing Murder, Robbery, Narcotics, And Firearms Offenses

Nazeem Francis, Jonathan Colon, and Julio Ozuna Are Charged with the September 2018 Murder of Christopher Pierce

  Geoffrey S. Berman, the United States Attorney for the Southern District of New York, William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Dermot Shea, Commissioner of the New York City Police Department (“NYPD”), announced today the unsealing of a Superseding Indictment charging NAZEEM FRANCIS, a/k/a “Naz,” JONATHAN COLON, a/k/a “Johnny Blaze,” a/k/a “JB,” JULIO OZUNA, a/k/a “JJ,” a/k/a “Josh Balla,” a/k/a “Chocolate,” PRINCE GAINES, a/k/a “Poodie,” ERICK OLEAGA, a/k/a “E.D.,” VICTOR MARTINEZ, and KHALIL SUGGS, a/k/a “KI,” with crimes including murder, robbery, robbery conspiracy, narcotics distribution conspiracy, and firearms offenses. 

Five defendants were arrested today and will be presented this afternoon before United States Magistrate Judge Sarah L. Cave.  Two defendants were already in custody and will be presented at a later date.  The case has been assigned to United States District Judge Mary Kay Vyskocil. 

Manhattan U.S. Attorney Geoffrey S. Berman said:  “As alleged in the indictment, the defendants brought violence and drugs to the streets of the Bronx.  Now, thanks to our outstanding law enforcement partners at the FBI and the NYPD, these defendants face charges in federal court.”

FBI Assistant Director-in-Charge William F. Sweeney Jr. said: "This investigation illustrates the extremes violent gang members will go to, all in the pursuit of making easy money.  The arrests and announcement today also demonstrate that while much of the world is rightly slowing down, FBI special agents and detectives on the New York FBI Metro Safe Streets Gang Task Force will continue the extremely critical work of keeping criminals from putting more lives in danger."

According to the allegations in the Superseding Indictment[1] unsealed today in Manhattan federal court:

On or about September 3, 2018, FRANCIS, COLON, and OZUNA aided and abetted the shooting and killing of Christopher Pierce in the Bronx, New York, following the attempted robbery of Pierce’s friend, a marijuana dealer.  FRANCIS, COLON, and OZUNA are also charged with attempted robbery and robbery conspiracy based on their participation in the botched robbery that led to Pierce’s death.

COLON, OZUNA, GAINES, OLEAGA, MARTINEZ, and SUGGS are charged with participating in a conspiracy to distribute cocaine and crack cocaine from in or about 2018 through in or about March 2020. 

On or about November 18, 2019, SUGGS brandished a firearm, and aided and abetted the same, in furtherance of the drug trafficking conspiracy.

On or about January 19, 2020, OZUNA robbed an individual at gunpoint.  OZUNA is charged with robbery, robbery conspiracy, and brandishing a firearm based on his participation in that gunpoint robbery.

A chart containing the names, charges, and maximum and minimum penalties for the defendants is set forth below.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.

Mr. Berman praised the outstanding investigative work of the FBI’s Safe Streets Task Force, as well as NYPD’s 43rd Police Precinct and Bronx Narcotics.

This case is being handled by the Office’s Violent and Organized Crime Unit.  Assistant United States Attorneys Allison Nichols and Jamie Bagliebter are in charge of the prosecution.

The charges contained in the Indictment are merely accusations and the defendants are presumed innocent unless and until proven guilty.

COUNT	CHARGE	DEFENDANTS	MAX. PENALTY
Count One	Murder through the Use of a Firearm  18 U.S.C. §§ 924(j) and 2	NAZEEM FRANCIS  JONATHAN COLON  JULIO OZUNA	Death or life imprisonment;  Mandatory minimum of five years’ imprisonment
Count Two	Attempted Robbery  18 U.S.C. §§ 1951 and 2	NAZEEM FRANCIS  JONATHAN COLON  JULIO OZUNA	20 years’ imprisonment
Count Three	Robbery Conspiracy  18 U.S.C. § 1951	NAZEEM FRANCIS  JONATHAN COLON  JULIO OZUNA	20 years’ imprisonment
Count Four	Narcotics Conspiracy  21 U.S.C. § 846	JONATHAN COLON  JULIO OZUNA  PRINCE GAINES  KHALIL SUGGS  ERICK OLEAGA  VICTOR MARTINEZ	40 years’ imprisonment  Mandatory minimum of 5 years’ imprisonment
Count Five	Firearm Offense  18 U.S.C. §§ 924(c) and 2	KHALIL SUGGS	Life  Mandatory minimum of 7 years’ imprisonment
Count Six	Robbery  18 U.S.C. §§ 1951 and 2	JULIO OZUNA	20 years’ imprisonment
Count Seven	Robbery conspiracy  18 U.S.C. § 1951	JULIO OZUNA	20 years’ imprisonment
Count Eight	Firearm Offense  18 U.S.C. §§ 924(c) and 2	JULIO OZUNA	Life  Mandatory minimum of 7 years’ imprisonment

[1] As the introductory phrase signifies, the entirety of the text of the Indictment and the description of the Indictment set forth herein constitute only allegations and every fact described should be treated as an allegation.