Black Friday Indictee Paul Tate Avoids Prison Sentence

Posted on: November 29, 2016, 06:00h. 

Last updated on: November 29, 2016, 03:56h.

Casino.org Staff Writer Read More

Expertise: Commercial Gaming.

Paul Tate, PokerStars’ payments director of the pre-Amaya era, has been spared a prison sentence by a Manhattan federal court.

Tate was one of 11 people indicted by the Department of Justice On April 15, 2011 on charges of violating the Unlawful Gambling Enforcement Act, bank fraud and money laundering.

On the day poker players now refer to as Black Friday, The DoJ also seized the domains of America’s biggest poker sites, PokerStars, Full Tilt and Cereus, effectively dismantling the market in the US.

Tate pleaded guilty last month to one charge of operating an illegal gambling business.

The original charges against him included money laundering, and conspiracy to commit bank fraud and wire fraud, but were removed as part of a plea bargain.

A World of Credit

Nevertheless, he could have faced up to five years in prison for his role in helping PokerStars to use “fraudulent methods to circumvent federal law” and to “trick financial institutions into processing payments on their behalf,” in the words of the 2011 indictment.

Instead, the judge praised Tate, a Brit living on the Isle of Man, for traveling to the US of his own volition to face the courts. Since PokerStars was legally regulated by the island’s authorities during the time of the infractions, and online poker was perfectly legal there, he would not have faced extradition if he had chosen to remain.

While he was listed by US authorities as “at large,” he was living on the island in plain sight and continued to work for PokerStars until its sale to Amaya in 2014.    

“Given that you couldn’t be extradited for this, you deserve a world of credit for coming to face the music,” said Judge Lewis Kaplan, who ordered Tate to forfeit $119,000 but walk from court a free man.

“I very much regret the choices I have made,” Tate told the judge. In his first court appearance last month he said that he and his family had “paid a heavy price for this conduct.”

Hidden Transactions

The Black Friday indictees were accused of arranging for funds from US players to be received as payments to hundreds of non-existent online merchants, purporting to sell all kinds of things from jewelry and golf balls, according to the DOJ.

The sites were also accused of making large investments in financial institutions, such as Sun First Bank, so that they could get them to pay out player funds by miscoding transactions.

Of the original 11 indicted, only Scott Tom of Absolute Poker and PokerStars founder Isai Scheinberg have failed to appear before the courts.

While PokerStars’ $731 million payment to US authorities in 2012 settled the civil case against PokerStars, the criminal charges against Scheinberg remain.