Scott Tom’s lawyers were surprised by the 7-day jail sentence.
Absolute Poker co-founder Scott Tom spent time in jail for his Black Friday-related crimes after all. After pleading guilty to lesser charges in the Absolute Poker player funds case late last year, Scott Tom spent 7 days in jail.
Mr. Tom, who founded Absolute Poker in the 2000s alongside former college friends, also paid a $300,000 for his role in the downfall of Absolute Poker. Brent Beckley, another co-fonder, spent 2 & 1/2 years in prison after his 2012 trial for similar crimes.
US Magistrate Judge Barbara Moses of Manhattan agreed to a misdemeanor plea bargain in December 2016. Scott Tom’s lawyers requested jail time be limited to time served, but Judge Moses decided to sentence Scott Tom to seven days extra.
Scott Tom Serves 7 Days in Jail
Despite the extra twist of the knife by the judge in the case, the sentence was light, considering the original charges.
When the Black Friday indictments were unsealed by the office of Preet Bharara on April 15, 2011, the charges included operation of an illegal gambling business, violation of the Unlawful Internet Gambling Enforcement Act (UIGEA), and conspiracy to violate the UIGEA. Added up, he could have served 15 years in prison and faced up to $750,000 in fines.
In the aftermath of Black Friday, it was learned that Absolute Poker did not segregate player funds from operating funds. This meant that AB customers did not receive reimbursement for their player accounts for 3 to 6 years — a circumstance which is only now being resolved for thousands of players.
Charges Against Scott Tom
Due to those infractions, Scott Tom faced a new set of potential charges involving the mismanagement of corporate funds. Embezzlement was a potential charge, while one lawmaker at the time accused FullTilt Poker’s executives of “running a Ponzi scheme” for their similar failure to segregate funds.
PokerStars and FullTilt Poker players received their funds by 2015, after the player accounts were unfrozen. By that time, PokerStars was buying FTP, a deal which covered that site’s expenses. Players at Absolute Poker and UltimateBet were not so fortunate. Cereus Network, which administered AP and UB, went backrupt.
$33.5 Million in AP/UB Player Funds
Ultimately, the PokerStars/FullTilt deal included an additional $33.5 million in unclaimed funds. This opened the door for Absolute Poker and UltimateBet players to receive reimbursement, a process which has been going on for years. By the end of 2017, payouts for 7,400 players who made claims should be completed by November 2017. That will close the door on the sad case of Absolute Poker.
The U.S. government says that the fine and jail sentence means Scott Tom has paid his debt to society. Absolute Poker players and members of the gaming media have been less forgiving, because they feel Scott Tom fled to a jurisdiction (Antigua) which sheltered him from justice. While Beckley spent years in prison, Tom continued his life with impunity.
Black Friday Aftermath
Whatever the case, there have been greater injustices in the US justice system. The best that can be said is the whole lamentable affair is finished now. Those who wanted more punishment doubtless will applaud Judge Barbara Moses’s decision to give Scott Tom 7 days of jail to contemplate what he’s done.
The ending of Scott Tom’s case means only one more indictment in the Black Friday scandal is left unresolved. Isai Schneinberg, the founder of PokerStars, remains indicted for his role in Black Friday. Ironically, Mr. Scheinberg’s company paid a $731 million fine to resolve its issues with the United States government, while PokerStars’ founder was instrumental in helping the U.S. authorities pay back the many players affected by Black Friday investigations. The 70-year old Scheinberg lives outside the United States. He and his son sold PokerStars to Amaya Gaming in 2014.
