Black Friday Echoes: P.T. to Plead Guilty on Illegal Gambling Business Count

Online poker’s infamous “Black Friday” case from 2011, which resulted in the exit of the three largest US-facing international companies from the American market, returned to the headlines overnight with the announcement that a plea deal has been reached between one of the case’s three remaining at-large defendants, P.T., and prosecutors for the Preet Bharara-led United States Attorney’s Office for the Southern District of New York.

DOJNY-based, via Reuters, was the first to report on the plea deal involving P.T., who worked as PokerStars’ Director of Payments in the years prior to the 2011 crackdown and indictments.  P.T.’s alleged illegal activities occurred during PokerStars’ initial existence as part of Rational Group, the company co-founded by father and son Isai and Mark Scheinberg.  In 2014, PokerStars and all related entities were sold to Canada-based Amaya Gaming.

With the plea deal, P.T. becomes the ninth of the 11 individual defendants who were charged criminally in 2011.  Two others remain outside of US jurisdiction, though one of those, Isai Scheinberg, has at times been rumored to have had his lawyers in similar negotiations with the US’s DOJ.  The other remaining Black Friday defendant, former Absolute Poker president Scott Tom, remains holed up on the Caribbean island of Antigua at last report, where he’s been spotted on social media posting from beachfront bars and playing backgammon.

As for P.T., court records show that negotiations between P.T.’s counsel and US prosecutors reached a tipping point back in July.  On July 18th, P.T. signed an appearance bond and put up $1,000,000 while traveling to New York City.  P.T. has also agreed to surrender his passport and related travel documents until a sentencing hearing in mid-November.

P.T. was originally named on five counts in the Black Friday indictment:

  • Conspiracy to Violate Unlawful Internet Gambling Enforcement Act
  • Violation of Unlawful Internet Gambling Enforcement Act (UIGIEA) -PokerStars
  • Operation of Illegal Gambling Business – PokerStars
  • Commit Bank Fraud and Wire Fraud
  • Money Laundering Conspiracy

Possible fines and prison terms on those charges varied from five to 20 years in prison, with fines as high as $1,000,000.  However, the plea deals involving other defendants have generally involved more lenient terms.

In addition, the report as published via Reuters, in which P.T. appeared yesterday before U.S. Magistrate Judge Barbara Moses, states that P.T. will be pleading guilty to just one of the five counts, that of operating an illegal gambling business.  The possible penalty as announced on that charge reads as “Five years in prison; fine of $250,000 or twice the gross gain or loss; three years of supervised release; forfeiture of proceeds of offense.”

Given that P.T. is already free on the million-dollar secured bond, it is likely that that million dollars will represent the extent of his fine, along with a possible shortened — or no — prison sentence.  P.T. is currently ensconced at a New York City apartment, and is allowed to travel in the New York / Washington D.C. corridor to meet with defense attorneys and prosecutors.

P.T. is believed to be cooperating with prosecutors in remaining matters connected to the Black Friday case.  However, a nine-page court document connected to the plea deal remains under court seal.  It will not be released until November 14th, 2016, the same time frame as P.T.’s upcoming sentencing hearing, which is scheduled for November 21st.

“My family and I have paid a heavy price for this conduct,” P.T. told Judge Moses yesterday, according to Reuters, in the plea-deal hearing.

PokerStars’ current corporate owner, Amaya, issued a brief statement noting the alleged illegal activity took place before Amaya acquired Stars, and that P.T. was never an Amaya employee.  According to an Amaya statement, “Amaya is not a party to this case and it has no impact or legal implications on our business or operations. P.T. is a former employee of PokerStars associated with the previous owners who separated from the company prior to August 2014 when Amaya acquired PokerStars. The previous owners separated completely from the company when Amaya acquired PokerStars. In September 2015, the New Jersey Division of Gaming Enforcement authorized Amaya to operate the PokerStars and Full Tilt brands in New Jersey.”

The pending plea deal for P.T. adds yet another chapter to the long-winding Black Friday saga.  We’ll update the story here at FlushDraw as additional events warrant.


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