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  1. #1
    gordonprice1947 is offline Public Member
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    Default Neteller Founder Pleads Guilty

    Here's some not so good news for the industry heading into the weekend...

    http://www.casinogamblingweb.com/gam...ges_46686.html

  2. #2
    gordonprice1947 is offline Public Member
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    This story is still breaking, here is the AP report....

    http://www.washingtonpost.com/wp-dyn...062901666.html

  3. #3
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    Wow, worst news I've seen in some time... But there is a bit of a silver lining. The other defendant, Lefebvre, pleaded not-guilty... So presumably those charges may be heading towards a jury trial?
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    Here's the press release from NETeller...

    Press Release

    Update on US Situation Regarding Former Directors

    Monday, 2 July 2007 - NETELLER Plc (LSE: NLR), the independent global online payments business, today issued the following statement regarding the announcement on Friday 29 June 2007 by the United States Attorney's Office for the Southern District of New York (USAO) regarding Mr Stephen Lawrence and Mr John Lefebvre, two of the Company's former directors and founder shareholders.

    According to the USAO announcement, Mr Lawrence has pleaded guilty to a charge of conspiracy in connection with his role in NETELLER's prior involvement in handling financial transactions between gambling customers in the United States and offshore internet gambling businesses. In relation to this charge, Mr Lawrence also admitted to allegations requiring him to forfeit at least US$ 100 million. The USAO further announced that the case against Mr Lefebvre is still pending.

    Other than as shareholders, neither Mr Lawrence nor Mr Lefebvre has any current position with or connection to NETELLER.

    NETELLER is continuing to cooperate with the investigation being conducted by the USAO, under the advice of its legal advisers and in accordance with court orders in the Isle of Man. As announced on 4 June 2007, the Company is in discussions with the USAO for the purpose of resolving the investigation and has advised the USAO that it will use its best efforts to resolve the investigation no later than 13 July 2007. The Company does not currently believe that these developments will delay its efforts to resolve the investigation by that date.

    The Company's ordinary shares will continue to be suspended from trading. Further information will be announced as and when it becomes available.

  5. #5
    vinism's Avatar
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    Here's the press release from the U.S. Attorney's Office:

    NETELLER FOUNDER PLEADS GUILTY TO CONSPIRING TO PROMOTE ILLEGAL INTERNET GAMBLING BUSINESSES

    MICHAEL J. GARCIA, the United States Attorney for the Southern District of New York, announced that STEPHEN ERIC LAWRENCE, a founder and former Chairman of NETeller PLC, pleaded guilty today to charges that he conspired with others to promote illegal gambling by providing payment services in the United States to offshore internet gambling businesses. According to the documents filed and LAWRENCE’s plea allocution in Manhattan federal court:

    In 1999, LAWRENCE founded NETeller, a group of companies that provided online payment services to internet gambling companies. In July 2000, LAWRENCE began providing payment services through NETeller Inc., a Canadian company based in Calgary, Alberta, and began providing payment services through NETeller PLC, a company based in the Isle of Man, in 2004. It provided those services to internet gambling businesses located outside the United States, so those businesses could take bets from gamblers in the United States, where such betting is illegal. In April 2004, NETeller PLC went public on the Alternative Investment Market (“AIM”) of the London Stock
    Exchange.

    In addition to founding the NETeller group of companies, LAWRENCE served those companies in a variety of senior management positions, including as Chief Executive Officer of NETeller, Inc. Until 2006, LAWRENCE was Chairman of the Board of Directors of NETeller PLC.

    LAWRENCE pleaded guilty to one count of conspiracy to use the wires to transmit in interstate and foreign commerce bets and wagering information; to conduct illegal gambling businesses; to engage in international financial transactions for the purpose of promoting illegal gambling; and to operate an unlicensed money transmitting business. During the course of the plea allocution, LAWRENCE admitted that during the time he was operating in the NETeller group, he came to learn that laws existed in the United States barring the transfer of money for the purposes of promoting gambling, which led him to the understanding that what he was doing was wrong. LAWRENCE, 47, faces a maximum sentence of 5 years’ imprisonment and a fine of $250 thousand, or twice the gross gain or loss from the offense, when he is scheduled to be sentenced before United States District Judge P. KEVIN CASTEL on October 29, 2007. LAWRENCE also admitted to forfeiture allegations requiring him to forfeit $100 million. A related case against former NETeller President and Board of Directors member JOHN DAVID LEFEBVRE remains pending.

    Mr. GARCIA praised the investigative efforts of the Federal Bureau of Investigation. Assistant United States Attorneys TIMOTHY J. TREANOR, CHRISTOPHER P. CONNIFF, and SHARON COHEN LEVIN are in charge of the prosecution.

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    big fish is offline Private Member
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    do you think that if a payment processor such as neteller offered their processing services to online gambling sites like casinos and poker rooms, but NOT SPORTSBOOKS... that the gov't would have still brought charges? i think processing for sportsbooks as the downfall and if a good processor came along that excluded sportsbooks the situation might be different.

    i guess he decided to cooperate to reduce his sentence...
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  7. #7
    vinism's Avatar
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    It's hard to say for sure. I suspect that the DOJ will pursue all cases with sportsbook connections first because that's where they're on very sure legal ground. Might as well grab the "low hanging fruit" first. I also suspect they have there eyes out for other test cases in non-sportsbook areas. That's why PartyGaming's decision to proactively cooperate with them is pretty smart.

  8. #8
    gordonprice1947 is offline Public Member
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    The other co-founder of Neteller plead guilty to the same charges as Lawrence today.

    Lefebvre, Other Neteller Founder Pleads Guilty
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  9. #9
    vinism's Avatar
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    Here's quick story on the plea:

    Second NETeller co-founder pleads guilty

    July 10, 2007
    by Vin Narayanan NETeller co-founder John Lefebvre pleaded guilty Tuesday to a conspiracy charge related to the processing of millions of dollars in gambling transactions, according to Reuters.

    The guilty plea is similar to one filed by fellow NETeller co-founder Stephen Lawrence earlier this month.

    Both Lefebvre and Lawrence admitted to wrongdoing in their pleas. Lawrence said "he came to learn that laws existed in the United States barring the transfer of money for the purposes of promoting gambling, which led him to the understanding that what he was doing was wrong," according to a statement from the U.S. Attorney's Office for the Southern District of New York.

    Lefebvre made a similar statement according to Reuters. Both men face a maximum of five years in prison.

    Lawrence's sentencing date is Oct. 29. Lefebvre's is Nov. 1.

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