Internet poker employee pleads guilty to operating illegal gambling business

October 13, 2016 4:23 PM EDT

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By Mica Rosenberg

NEW YORK (Reuters) - A former employee of internet gambling company PokerStars pleaded guilty on Thursday to operating an illegal gambling business, as part of a long-running case by U.S. prosecutors against the online poker industry.

Paul Tate, 42, told U.S. Magistrate Judge Barbara Moses that he was guilty of one charge that has a maximum sentence of five years in prison. A sentencing hearing will be held on Nov. 21.

The case dates to 2011, when the U.S. Attorney Preet Bharara in Manhattan won the indictment of 11 defendants, including Tate, who were involved with PokerStars, Absolute Poker and Full Tilt Poker. The charges against them included bank fraud, money laundering and other charges.

Wearing a gray suit and glasses in court, Tate, a British citizen, said he began working for the Isle of Man-based PokerStars in 2006 doing technical work and interacting with companies that processed payments.

"My family and I have paid a heavy price for this conduct," he told the judge.

Amaya Inc, the Canadian company that owns the PokerStars and Full Tilt brands, said in an emailed statement that it was not involved in the case and the outcome would have "no impact or legal implications on our business or operations."

In 2012, PokerStars paid $731 million to settle civil claims brought by the U.S. Justice Department. PokerStars also agreed to purchase Full Tilt Poker as part of the agreement, after the former rival collapsed following the indictment.

The U.S. government alleged the offshore poker companies circumvented laws against internet gambling to trick U.S. banks and credit card issuers into processing billions of dollars of payments on their behalf.

The case is USA v. Tzvetkoff et al, U.S. District Court for the Southern District of New York, No. 1:10-cr-00336.

(Editing by Steve Orlofsky)



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