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  1. #1
    gordonprice1947 is offline Public Member
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    Default Neteller Case is Over

    The Neteller case has finally ended. They agreed to forfeit $136 million and return $90 million to US customers.

    Neteller Case Has Ended : Press Release
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    Here's the NETeller press release in its entirety:

    Wednesday, 18 July 2007 - NETELLER Plc (LSE: NLR), the independent global online payments business, today announces that the Company has entered into a Deferred Prosecution Agreement (“DPA”) with the United States Attorney's Office for the Southern District of New York (“USAO”). The DPA represents the resolution of the USAO’s investigation into the Company.

    Pursuant to the DPA, the Company has consented to the filing of a criminal information relating to transactions between Internet gambling merchants and persons located in the United States. The USAO has agreed to defer the prosecution of any federal charges and, as a consequence, the Company will not be convicted of any federal crime, as long the Company fulfils the set conditions of the DPA during the two year term of the agreement. At the conclusion of the two year term, the criminal information will be dismissed. The key terms of the DPA are set out in more detail later in this announcement. The United States District Court for the Southern District of New York has approved the deferral of the prosecution. As part of the DPA, the Company has also agreed to forfeit US$ 136 million to the United States. This amount includes the approximately US$ 60 million that the USAO has previously seized.

    Additionally the Company announces:
    • Following this resolution, the Company will seek to publish its audited annual accounts for 2006 and have its shares restored to trading on AIM as soon as practicable thereafter.
    • The Company is using its best efforts to allow withdrawal requests as soon as possible and US customers will be able to sign in to their NETELLER account to request the withdrawal of their funds by no later than 30 July 2007. The exact date upon which US customers will be able to make requests will be communicated to US customers via email and through our website.
    Ron Martin, President & CEO, said “This agreement resolves the USAO’s investigation relating to the Company’s former US business activities. We believe that this settlement is in the best interests of NETELLER and its shareholders."

    “Our customers, employees and shareholders have all patiently waited for this resolution. We anticipate within the next few weeks that we will have fully implemented the plan for the return of funds to our US customers and are hopeful that, by that time, we will have restored the Company’s shares to trading on AIM. We can now begin to refocus our efforts on building and strengthening the NETELLER business in the growing markets of the European and Asia Pacific regions. I look forward to sharing further information about the Company’s progress over the coming months.”

    Key terms of the Deferred Prosecution Agreement


    The settlement takes the form of a two year DPA with the USAO. In the DPA, NETELLER has consented to the filing with the United States District Court for the Southern District of New York of a criminal information charging NETELLER with participating in a conspiracy in violation of certain US laws. If NETELLER fulfils its obligations under the DPA, the criminal information will be dismissed, following the two year term.

    Specifically, the DPA contains the following main points:
    • NETELLER, as detailed in the “Statement of Admitted Facts” attached to the DPA, admits that it had operated in the US an unlicensed money transmitting business and had participated in the performance of financial transactions for the purpose of promoting unlawful transactions between internet gambling merchants and persons located in the US.
    • NETELLER agrees that it will pay an amount to the United States totalling US$ 136 million which is disgorgement of certain profits received by NETELLER from the activities described in the Statement of Admitted Facts. This amount includes the approximately US$ 60 million that the USAO has previously seized. NETELLER agrees that it will satisfy the remaining portion of its forfeiture obligation with a payment of US$ 40 million to be paid on or before 15 October 2007, and the remaining balance (approximately US$ 36 million) to be paid on or before 17 January 2008.
    • NETELLER agrees to cooperate fully with US authorities in all matters relating to the ongoing investigations by the USAO.
    • NETELLER agrees to fully implement procedures and controls to prevent illegal transactions between internet gambling merchants and persons located in the US and to continue to retain Navigant Consulting Inc., a forensic accounting firm, to monitor NETELLER’s compliance with these procedures and controls.
    Distribution Plan to be implemented

    As announced on 4 June, the Company has agreed to a plan for the distribution of funds to its US customers. The agreed plan details the process and mechanisms by which US customers will be able to initiate the return of their funds after the plan is implemented. NETELLER is using its best efforts to start implementing the plan as soon as possible and, in any event, by no later than 30 July 2007. The Company will communicate to US customers via email and through its website the exact date upon which such customers will be able to make requests.

    Restoration of trading to AIM


    As stated in the Company’s announcement of 13 July, the Company continues to make progress regarding the ongoing suspension of the Company's shares from trading on AIM. The Company is in discussions with its advisers and AIM and understands that the admission of the Company’s ordinary shares to trading on AIM has not to date been cancelled.
    With today’s announcement of a resolution of the USAO investigation, the Company is now focused on finalising and publishing its audited annual accounts for 2006. The Company will endeavour to post the 2006 accounts to its shareholders as soon as practicable following which the Company anticipates that trading in the Company’s ordinary shares on AIM will be restored.
    Further details will be announced as and when they become available.
    Last edited by vinism; 18 July 2007 at 12:09 pm.

  3. #3
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    Ok. I just finished reading this. NETeller has reached what amounts to a plea agreement with the U.S. Attorney's Office. Here are the key terms of the agreement:

    • NETeller admits they illegally processed gambling transactions for U.S. players.
    • NETeller will pay the U.S. $136 million over the course of the next two years as a penalty for processing these transactions. This amount includes $60 million that has already been seized.
    • By no later than July 30, U.S. players will be able to initiate withdrawal requests from their NETeller accounts.
    • NETeller agrees to implement procedures that will prevent U.S. customers from using the e-wallet for gaming transactions.
    • If NETeller fulfills its obligations under this agreement for two years, all criminal charges against the company will be dismissed.

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    finally... i have had money tied up in neteller so this is warmly welcomed news for me... thanks for the heads up once again
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    vinism's Avatar
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    Here's a quick story on this:

    NETeller strikes deal; will return U.S. money

    By Vin Narayanan
    18 July 2007


    Financial payment process NETeller will pay $136 million to the U.S. government and admit criminal wrongdoing in the processing American gambling transactions as part of deal reached with U.S. prosecutors, the company announced today.

    The company will also begin the process of returning money to U.S. customers no later than July 30. All U.S. accounts were frozen in January following the arrests of NETeller co-founder John Lefebvre and Stephen Lawrence.

    In similar guilty pleas earlier this month, both Lefebvre and Lawrence admitted that they knowingly violated the law by processing gambling transactions for Americans. The two will be sentenced this fall and face maximum sentences of five years.

    If NETeller fulfills all the terms of its agreements, which also includes implementing procedures to prevent U.S. customers from using the service for online gambling, all criminal charges will be dismissed, the company said in a statement.

    The $136 million NETeller now owes the U.S. government already includes $60 million that was seized by the Department of Justice in January as part of its investigation into the popular e-wallet.

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    Quote Originally Posted by vinism View Post
    • NETeller admits they illegally processed gambling transactions for U.S. players.
    • NETeller will pay the U.S. $136 million over the course of the next two years as a penalty for processing these transactions. This amount includes $60 million that has already been seized.
    • By no later than July 30, U.S. players will be able to initiate withdrawal requests from their NETeller accounts.
    • NETeller agrees to implement procedures that will prevent U.S. customers from using the e-wallet for gaming transactions.
    • If NETeller fulfills its obligations under this agreement for two years, all criminal charges against the company will be dismissed.
    Nice summation, possibly another point worth outlining from the article would be ...

    "Pursuant to the DPA, the Company has consented to the filing of a criminal information relating to transactions between Internet gambling merchants and persons located in the United States. "

    filing of a criminal information Possibly that 'a' was a typo - but what exactly is "criminal information" considered to be anyway? Has the USAO and Neteller set a precedent via this language - that any and all of Netellers US customers are criminals? OR, are they going to only be looking into "sports book" transactions?

    Seems like their plea bargain will require them to hand over information regarding transactions of those in the US - potentially including players, affiliates, and others. Whether they will then be targetting additional merchants and/or "persons" is unknown at this time - or can we count on it?

    I think it sounds more like extortion - give us 160m+ and all the paperwork we want - so that we can possibly target others, and we will not press any charges. Something not quite right about that!

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    I'm worried about the invasion of privacy when I decide to collect my nearly $3K that's been held hostage. When I withdraw those funds, which has to go via electronic means, is that going to automatically launch an investigation into my dealings with Neteller and their merchants?
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    Quote Originally Posted by matted View Post
    I'm worried about the invasion of privacy when I decide to collect my nearly $3K that's been held hostage. When I withdraw those funds, which has to go via electronic means, is that going to automatically launch an investigation into my dealings with Neteller and their merchants?
    I think US customers should expect that some sort of paper work will need to be filed with the USAO/IRS or other governmental entity before and/or in conjunction with any and all payouts of monies owed/collected. If they dont have any such requirements in place I will be sort of surpised.

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    Quote Originally Posted by matted View Post
    I'm worried about the invasion of privacy when I decide to collect my nearly $3K that's been held hostage. When I withdraw those funds, which has to go via electronic means, is that going to automatically launch an investigation into my dealings with Neteller and their merchants?
    Remember that the US has limited resources so they will try to get as much "bang" out of their legal resources. I think they (meaning the US government) will go after tax evasion as opposed to "illegal gambling", due to the fact that it will be exponentially harder to prove an actual illegal gambling event took place. You've have to have IP specificity, the gambling provider, and the actual recording of the gambling event all in one cohesive collection to even start an "illegal gambling" prosecution.

    Tax evasion is much easier to prove. It's a simpler matter, it's proving what you took in compared to what you declared. That's a simpler and more efficient way to cover as many people as possible.

    Just my own thoughts. I'd go for the money, and declare it on my tax return.
    I would at least if I had money tied up in neteller.

    Good news.

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    excellent news for anyone and everyone who had money sitting in their neteller account. Most of us USA neteller customers were having our doubts about ever getting funds back that were in their. Hurray!

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    I wonder if they will go against every US bank, master card, visa, and all others that in some way have facilitated gambling transactions in the past.

    In my view, Neteller have not fight for this. They are under a jurisdiction that allows them to do what they do. If someone deposits money into Neteller, the money goes into Neteller jurisdiction. At that point, what happens to the money is an affair for the jurisdiction where Neteller is based and not for US. So Neteller does not seem to have done anything wrong.

    If a citizen of country X deposits money at a bank on country Y, then if there is any transaction after, it must respect the laws of jurisdiction Y.

    Online gambling is provided outside the US. The only thing that US could really do, is to block access from the US to external websites. But the external websites must respect the law of their jurisdiction, and that does not iclude the law that is applicable on US soil.

    It's seem clear to me, but maybe someone else have different opinions on that. It's the way at least we think in Europe. Neteller was robbed by USAO.

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    I think we've all wondered how offshore companies are being held responsible for US laws, even if they are acting legally in their jurisdiction. I do wish I knew how all the Neteller players suddenly "came to realize" they had broken laws and agreed to plead guilty or hand over gobs of cash in settlements. It just doesn't make sense.

    I understand it was done to avoid a lengthy trial and all that, but why international governments refuse to cry foul is beyond me.
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    Don't forget they already have your SS# and all of your transactions through Neteller. Neteller gave them everything they asked for and more besides.
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    yes I am agree with sharpgambler to 80 %.

    One should do the things respecting the laws of the other country.
    ( this is valid for the U.k and for the U.s.a ).
    The problem is that with internet you could play in other country where this is legal. ( One state should respect this ).
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    Disgorgements by NETeller could lead to other Companies’ paying fines?

    Key Implications:

    · NETeller’s agreement to cooperate fully with US authorities in all matters relating to the ongoing investigations by the United States Attorney’s Office could lead to more charges and fines of other companies.

    · United States Attorney’s Office could go after more companies who were involved in financial processing of iGaming

    · NETeller’s stay of guilt could bode well for other companies involved in discussions with United States Attorney’s Office

    · United States Attorney’s Office could glean information from NETeller records on US citizens who may be involved in tax evasion or money laundering


    NETeller Plc (LSE: NLR) announced that the Company had entered into a Deferred Prosecution Agreement (”DPA“) with the United States Attorney's Office for the Southern District of New York (”USAO“). The DPA represents the resolution of the USAO’s investigation into the Company.

    Pursuant to the Deferred Prosecution Agreement, NETeller consented to the filing of criminal information relating to transactions between Internet gambling merchants and persons located in the United States. The United States Attorney's Office for the Southern District of New York (USAO) agreed to defer the prosecution of any federal charges and, as a consequence, the Company will not be convicted of any federal crime, as long the Company fulfils the set conditions of the DPA during the two year term of the agreement.

    At the conclusion of the two year term, the criminal information will be dismissed. The key terms of the DPA are set out in more detail later in this announcement. The United States District Court for the Southern District of New York has approved the deferral of the prosecution. As part of the DPA, the Company has also agreed to forfeit US$ 136 million to the United States. This amount includes the approximately US$ 60 million that the USAO has previously seized.

    THE USAO must see this as a victory as the fines will bolster their efforts to date and possibly fund future ones. This leaves open a number of possibilities that may include the USAO begin investigations on other processing companies who have processed financial transactions in the same manner in the past. While there are no mainstream companies now processing, publicly traded companies such as Citadel Commerce and Fire Pay (Fire One) may come under scrutiny.

    A key Term in the DPA specifies that NETELLER would agree to cooperate fully with US authorities in all matters relating to the ongoing investigations by the USAO.

    When merchants join NETeller, corporate information and key officer / director profiles are disclosed as part of the application process. This information was supposed to be private.

    By turning over information on its clients, NETeller will be able to provide the USAO data on European-based companies that have previously not had such information scrutinized by the US Government.

    While companies Party Gaming Plc and 888.com Plc have voluntarily been in talks with the USAO, the actual amounts that these companies processed in the geographic USA over the past few years will be now available to the USAO.

    Private companies such as Full Tilt Poker may also now find themselves in the crosshairs with records of transactions now transparent to the USAO.

    Whether the USAO uses them to build cases or mandate fines against more companies is something that will have to be watched closely. However, because NETeller agreed to a Deferred Prosecution Agreement, a precedent has been set that may allow foreign companies in the iGaming space plead in the same manner.

    Finally, the United States Attorney’s Office could glean information from NETeller records on US citizens who may be involved in tax evasion or money laundering. By looking at individual transaction records of US citizens, the USAO may discover individuals who have won monies and not paid taxes.

    All in all, the USAO had a lot of information to process, and now has the funds to spend on more investigations.



    from www.gamingpublic.com

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    Well, there is another news that is good. Neteller will be around, at least, for the next 2 years....They have the US Government support, because of the deal.

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    Quote Originally Posted by matted View Post
    why international governments refuse to cry foul is beyond me.
    It's called scare tactics.

    Trade embargo's to name but one tool.

    The WTO is another prime example.

    https://www.casinocitytimes.com/aaro...les/33731.html

    It comes back to who is the tallest kid in the playground with the biggest muscles.

    Hypothetically...If a US citizen was conducting copyright piracy would the US Government allow this US citizen to be extradited to another Country to face these charges? I doubt it.

    However in a recent case here in Australia, an Australian citizen was extradited to the US to stand trial for copyright piracy. The Australian Government handed him over without so much as a whimper.

    You can read about it here:
    http://www.theage.com.au/articles/20...390140855.html



    Cheers



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    Last edited by AussieDave; 24 July 2007 at 12:20 am.
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