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PokerStars settles with DOJ, buys Full Tilt Poker31 July 2012
PokerStars will pay the DOJ $547 million to settle bank fraud, wire fraud and money laundering charges. Part of that money will be used to pay money owed to American players by Full Tilt Poker. American players owed money will have to apply to the DOJ's Asset Forfeiture and Money Laundering Section for reimbursement. The charges were first filed on April 15, 2011.
The $547 million-payment will be spread out over three years according to PokerStars.
Additionally, PokerStars will set aside $184 million to reimburse players outside of the U.S. The money will be made available "with no restrictions on withdrawals, within 90 days of completing this transaction," according to a statement by PokerStars.
The settlement also includes the purchase of Full Tilt Poker. PokerStars admits "no wrongdoing" in the settlement agreement.
The settlement ends the DOJ action's against the Full Tilt Poker as a corporate entity. But Full Tilt's principals are not out of trouble.
The criminal proceedings against former CEO Ray Bitar and former processing chief Nelson Burtnick will continue. As will civil proceedings against Bitar, Howard Lederer, Rafael Furst and Chris Ferguson.
PokerStars is prohibited from hiring all of them.
PokerStars founder Isai Scheinberg will be required to exit the company as the part of the settlement. Scheinberg still faces criminal charges of bank fraud, money laundering, illegal gambling offenses and violating the Unlawful Internet Gambling Enforcement Act (UIGEA).
Scheinberg may be allowed to work for PokerStars after his criminal case is settled. "This ... is subject to re-evaluation by the parties upon the resolution of the criminal case," reads the DOJ statement on the settlement.
"PokerStars is prohibited from offering online poker in the U.S. for real money unless and until it is legal to do so under U.S. law.," the DOJ statement adds.
Full Tilt forfeited all of its assets to the DOJ to settle its case. Full Tilt did not admit to any guilt or wrongdoing as part of the settlement. But the forfeiture cleared the way for PokerStars to buy Full Tilt.
PokerStars acquisition of Full Tilt will be complete when the DOJ receives "a $225 million payment from PokerStars, which must take place within six days of the entrance of today’s settlement," according to the DOJ statement.
The DOJ will also be "given continued access to the Full Tilt Group's database for the purposes of extracting information necessary to effectuate a remission process...for the Full Tilt Group's former U.S. players, the administration of which shall be the sole responsibility of the United States.
"We are pleased to announce these settlements by Full Tilt Poker and PokerStars, which allow us to quickly get significant compensation into the victim players’ hands," said U.S. Attorney Preet Bharara in a statement announcing the settlements. "Today’s settlements demonstrate that if you engage in conduct that violates the laws of the United States, as we alleged in this case, then even if you are doing so from across the ocean, you will have to answer for that conduct and turn over your ill-gotten gains."
PokerStars hopes the DOJ settlement will help it gain a foothold in a regulated American market. "We are delighted we have been able to put this matter behind us, and also secured our ability to operate in the United States of America whenever the regulations allow," said Mark Scheinberg, chairman of the board of PokerStars.
"This outcome demonstrates our continuing global leadership of the online poker industry, and our commitment to working with governments and regulators to ensure the highest standards of protection for players," Scheinberg added.
Whether PokerStars will be deemed suitable to operate in the U.S. will ultimately be left up to the regulators.
The other online poker rooms charged in the Black Friday indictments -- Absolute Poker and Ultimate Bet (UB) -- reached a settlement agreement that requires them to forfeit their assets so the DOJ can sell them. Neither Absolute Poker nor UB admitted to any guilt as part of the agreement.
The assets will be sold "with the net proceeds of that sale to be held pending the resolution of claims filed by other parties who have asserted an ownership interest in the Absolute Assets," the DOJ said.
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