PokerStars Employee Pleads Guilty to Operating Illegal Gambling Site

Paul Tate, a former high-ranking employee of PokerStars, pleaded guilty to operating an illegal gambling business this week.

Take told U.S. Magistrate Judge Barbara Moses that he’s guilty of one charge, which carries a maximum sentence of five years in prison. Moses will decide Tate’s sentence on November 21.

The 42-year-old was one of 11 people who were indicted by U.S. Attorney Preet Bharara in April 2011. Owners and high-ranking employees at Absolute Poker, Ultimate Bet, Full Tilt Poker, and PokerStars were inducted on charges of bank fraud and money laundering.

Famous poker pros Chris “Jesus” Ferguson and Howard Lederer were among the indicted since they were board at Full Tilt.

Aside from facing fraud and laundering charges, both were facing serious jail time because Full Tilt failed to ring-fence player deposits from operating money and board-member payouts – thus causing a huge shortfall.

Ferguson and Lederer made plea deals with Bharara to avoid jail time while forfeiting millions of dollars.

Tate was a minor figure in the case, but he still faces the threat of jail.

According to the Las Vegas Review-Journal, Tate began working for the Isle of Man-based PokerStars in 2006, interacting with payment processors and doing technical work for the website.

“My family and I have paid a heavy price for this conduct,” he told Moses.

PokerStars was sold to Amaya Gaming in 2014 for $4.9 billion. The company’s previous owners, Israel’s Scheinberg family, transferred 100 percent ownership to Amaya. The Scheinberg family has had nothing to do with the current operation ever since.

Given that Amaya is completely separate from how PokerStars was once run, they told the Review-Journal that Tate’s case has “no impact or legal implications on our business or operations.”

Part of the $4.9 billion purchase price that Amaya paid went to settling a $731 million civil suit with the U.S. Department of Justice. This payment not only settled the company’s case with the Department of Justice, but also purchased Full Tilt, which collapsed after the indictments and failure to ring-fence player deposits.

The reason for the money laundering charges in the first place is that the US government claims offshore poker sites circumvented laws and tricked US banks into processing billions of dollars in player deposits.

Full Tilt, for example, disguised player deposits as golf equipment sales.

Absolute Poker and Ultimate Bet eventually closed after the indictments without honoring an estimated $20 million in players. The former CEO, Scott Tom, has evaded US authorities by living in Antigua, which has no extradition treaty with America.