Real Casinos2007 - Real Casinos News Archive>  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, Section 1084;

(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); and

(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 "Principles"), including:

(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 criminal conduct.

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 proceeds.

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 laws.

"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."