Absolute Poker’s Founder Appears in US Federal Court to Answer “Black Friday” Charges
Absolute Poker founder Scott Tom returned to the United States this week to face charges stemmming from the Black Friday scandal of April 15, 2011. Scott Tom is the second person indicted by the US Justice Department in the Black Friday scandal to have faced a judge in the past few months.
Scott Tom appeared in a Manhatten federal court on Thursday, where he pleaded “Not Guilty” to charges of illegal gambling and conspiracy to commit money laundering. Reuters reported that Scott Tom returned from Barbados to face the charges. No word was given how long Tom had been living in Barbados.
Scott Tom Released on $500k Bail
After appearing in court, Scott Tom was released after the hearing on $500,000 in bail. James Henderson, Mr. Tom’s lawyer, told the court that he was working on a deal with prosecutors and the plea agreement should be completed in the near-future.
James Henderson told the judge, “There’s going to be a resolution in this case quickly.”
Mr. Henderson also told the court that his client “just wants to get this behind him.”
If a plea deal happens, then the prosecutors will recommend to the presiding judge that they follow the terms of the plea deal. The judge does not have to follow the recommendations of prosecuters, but usually do in most situations.
The 2016 Paul Tate Case
In October 2016, Paul Tate pleaded guilty in a similar situation. Tate was required to pay $119 thousand, but avoided jail time. US Magistrate Judge Barbara Moses, who will preside in the Scott Tom case, praised Paul Tate for returning to face the charges and appeared to give him leniancy for doing so.
It is unclear whether Judge Moses will give Scott Tom similar leniency, but that would appear to be Tom’s calculation. Paul Tate was PokerStars former payment director, while Scott Tom was the CEO of Absolute Poker. Thus, Scott Tom is an executive of a higher order, and might be considered more responsible.
What Happened on Black Friday?
Not many in the gambling public are going to have sympathy for Scott Tom. The Black Friday scandal involved PokerStars, Full-Tilt Poker, and Absolute Poker. The three leading poker websites had their domains seized, while 11 people were indicted on April 15, 2011.
When the indictments were handed down, FullTilt Poker and Absolute Poker also did not have enough cash on hand to cover all the bets on their site. That fact became a huge scandal at the time, because it meant that gamblers and loyal customers might never receive their bankrolls back. In the case of FullTilt Poker, PokerStars took over the company and paid back the players.
Absolute Poker’s Fall
Absolute Poker also had a shortfall, but PokerStars did not assume control of Absolute. Instead, Scott Tom and his company simply left the players in the lurch. To this day, Scott Tom never paid back those customers. Absolute Poker shut down operations and never resumed them.
The demise of Absolute Poker and lack of repayment is not a concern of the US District Court, though. Scott Tom only faces those charges handed down in the indictment, so non-payment should not factor into his plea bargain or eventual sentencing.
Other Indicted Poker Executives
With Scott Tom’s reappearance, only one more person indicted by the Department of Justice in the Black Friday situation has not answered the charges: Isai Scheinberg, the founder of PokerStars. There is no indicated that Mr. Scheinberg plans to appear before the federal court. Isai Schneinberg and his son, Mark Schneinberg, sold PokerStars to Amaya Gaming’s David Baazov for $4.9 billion in August 2014.
Since that time, David Baazov and 12 other people have faced insider trading charges stemming from the sell of PokerStars to Amaya Gaming. Those charges were brought by Canadian authorities. The resulting court case forced David Baazov to leave his role as CEO of Amaya. A November 2016 attempt by Baazov to reacquire Amaya Gaming with financing from Hong Kong backers fell through.
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