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U.s. Attorney's Office Neteller Statement
"Supporting illegal gambling is not a business
risk, it is a crime," says US official
In a press release complementing that from Neteller, the United
States Attorney for the Southern District of New York, Michael J
Garcia said that the Isle of Man e-wallet has admitted to criminal
wrongdoing and has agreed to forfeit $136 000 000 in criminal proceeds
as part of an agreement to defer prosecution approved by Judge P.
Kevin Castel in a Manhattan court.
The release goes on to confirm and repeat much of the information
in the Neteller statement earlier today, but goes into more detail
on the charges, which are listed as:
Neteller participated in a conspiracy, in violation of Title 18,
United States Code, Section 371, to:
(i) use the wires to transmit in interstate and foreign commerce
bets and wagers on behalf of persons engaged in the business of
betting and wagering, in violation of Title 18, United States Code,
(ii) conduct illegal gambling businesses, in violation of Title
18, United States Code, Section 1955; (iii) conduct international
monetary transactions for purposes of promoting illegal gambling,
in violation of Title 18, United States Code, Section 1956(a)(2)(A);
(iv) conduct an unlicensed money transmitting business, in violation
of Title 18, United States Code, Section 1960.
The Information also contains a criminal Forfeiture Allegation
against all property involved in or derived from the criminal wrongdoing,
in the amount of at least $1billion dollars.
The statement goes on to outline the foundation and performance
of Neteller up to the arrest of its founders Stephen Lawrence and
John Lefebvre in January 2007 (see previous InfoPowa reports) and
notes that both founders have pleaded guilty to charges that they
conspired with others to operate an unlicensed money transmitting
business and to promote illegal gambling by providing payment services
to enable offshore Internet gambling businesses to access customers
in the United States.
Lawrence and Lefebvre each face a maximum term of imprisonment
of five years and a maximum fine of $250 000 or twice the gross
pecuniary gain from the offence. In addition, both men have admitted
to forfeiture allegations requiring them to personally forfeit an
additional $100 million dollars to the United States, which they
are expected to pay in full prior to sentencing at the end of October.
The USAO statement confirms that as part of the Deferred Prosecution
Agreement, Neteller will return to customers in the United States
approximately $94 million which it currently has on deposit in a
foreign bank account. Neteller has already asserted hat it will
not pay interest on these amounts.
Garcia said that the decision to file a charge against Neteller
was based on several factors set forth in the Department of Justice
Principles of Federal Prosecutions of Business Organizations (the
(i) the seriousness and duration of Neteller's conduct involving
the processing of billions of dollars of gambling transactions in
violation of state and federal law, and
(ii) the involvement of senior corporate officers in the company's
The decision then to enter into the Deferred Prosecution Agreement
with Neteller, Garcia continued, was based on a variety of factors
and considerations also set out in the Principles, including:
(i) the company's frank acknowledgment of its misconduct and its
willingness to cooperate with the investigation; and
(ii) the company's remedial actions, including cessation of its
participation in illegal gambling transactions involving persons
located in the United States; implementation of procedures and controls
to prevent its services from being used to conduct U.S. gambling
transactions; retention of a monitor to ensure compliance with those
procedures and controls; and disgorgement of $136 000 000 in criminal
Concluding the statement, Garcia noted: "Neteller moved billions
of dollars offshore, serving as a financial conduit that enabled
Internet gambling businesses to prosper by violating United States
"Supporting illegal gambling is not a business risk, it is
a crime, and today's proceedings mark yet another example of the
consequences of engaging in that conduct."
The US official went on to praise the "tremendous investigative
work of the Federal Bureau of Investigation in this case."