The latest twist in PokerStars’ attempted purchase of the Atlantic Club(pictured) in Atlantic City, New Jersey came down this week. According to NJ.com, “The revelation that Isai Scheinberg – PokersStars’ Israeli-Canadian founder and a target of a Federal criminal court case – was involved in the deal came as both sides filed a flurry of legal papers in advance of a hearing today in state Superior Court.” At the end of the day, a judge ruled in favor of the Atlantic Club, dooming the takeover, seemingly for good.

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We’ll start with the involvement of Scheinberg, who was one of 11 individuals indicted on Black Friday. Scheinberg did not travel to the U.S. to face charges and was set to step down from his position at PokerStars within 45 days of the deal to purchase the assets of Full Tiltclosing. Moreover, Scheinberg, according to PokerStars’ deal with the DOJ, could not “serve in any managerial or director role at any PokerStars company, including any entity that may own or operate any of the forfeited Full Tilt assets or their present or future affiliates.”

NJ.com explained the alleged involvement of Scheinberg in the takeover: “In a sworn statement, Eric Matejevich, Atlantic Club’s Chief Financial Officer, claims he received a phone call from Scheinberg in early October that opened discussions about a sale. Matejevich said he ‘understood’ Scheinberg to be a principal in the company.” The deal between PokerStars and the DOJ was forged in July.

According to Matejevich, Scheinberg’s involvement stretched well into 2013: “Matejevich said in his statement he had further discussions with Scheinberg after their initial talk in October. And on April 26 – days before the Atlantic Club announced it had terminated its purchase agreement – Scheinberg called Matejevich on his cell phone, according to the statement. Scheinberg said ‘his advisers had reported to him that they had a ‘90% chance’ of receiving’ a casino license.”

The involvement of Scheinberg could be damaging to PokerStars long-term – if the Atlantic Club’s claims are true. According to NJ.com, “Mark Rotert, a Chicago attorney and former Federal prosecutor, said it appears PokerStars violated its agreement with the Justice Department, noting the settlement prohibits Scheinberg from serving in ‘any’ management role.”

PokerStars has reportedly already sunk $11 million into the fledgling Atlantic Clubin Atlantic City. According to the Associated Press, PokerStars’ legal counsel told a judge on Friday, “We saved their butts. And we got the short end of the stick.” A blog by NorthJersey.com added that PokerStars’ attorneys “said it was like the casino said, ‘Let’s take that money and the heck with those guys. Ha, ha, ha.'”

Allegedly during the takeover process, PokerStars failed to procure a temporary licenseto be able to operate the casino. A complaint in March from the American Gaming Association, whose membership includes Caesars and MGM, was apparently part of the hold-up. State Senator Raymond Lesniak, who led the charge for legalized internet gambling in New Jersey, said at the time, “What I do know is that the opponents of PokerStars are out there in full force trying to prevent them from operating in New Jersey.”

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