ONLINE GAMBLING'S NETELLER STOPPED BUSINESS IN US 12:O1 AM
18 January 2007
HOUSTON CHRONICLE – cron.com
Jan. 18, 2007, 3:43AM
By ROBERT BARR – Associated Press
LONDON — Neteller PLC, a Britain-based online money transfer business, said Thursday it is ceasing to handle gambling transactions from U.S. customers because of restrictive legislation and uncertainties about regulations.
The company’s move came three days after former directors arrested and charged in the United States with funneling billions of dollars in gambling proceeds to overseas betting operations.
“As of today … at 12:01 AM GMT, U.S. resident customers were no longer able to transfer funds using Neteller’s services to or from any online gambling site,” the company said in a statement to the London Stock Exchange.
Neteller said it would focus operations on markets in Europe, Asia and other countries in the Americas.
Trading in Neteller shares on the London Stock Exchange was suspended Tuesday following the announcement of the arrests of the two former directors.
Neteller is an Internet payment services company that has grown in popularity as an increasing number of credit card companies have begun refusing to accept payments to online gambling sites.
Neteller essentially acts as a middleman between gamblers and offshore betting operations. For example, a gambler who wants to place bets at offshore sports books can fund an account with Neteller, which in turn will transfer the money to the betting sites. Prosecutors say Neteller facilitated the transfer of billions of dollars of illegal gambling proceeds.
On Tuesday, U.S. authorities announced the arrests of former directors John David Lefebvre, 55, and Stephen Eric Lawrence, 46, both Canadian citizens who were indicted by a grand jury in New York.
U.S. Attorney Michael Garcia said the men knew when they took their company public that its activities were illegal.
FBI Assistant Director Mark J. Mershon, assistant director of the U.S. Federal Bureau of Investigation, said the multibillion-dollar online gambling industry is “a colossal criminal enterprise masquerading as legitimate business.”
Lefebvre and Lawrence were charged in connection with the creation and operation of an Internet payment services company that facilitated the transfer of billions of dollars of illegal gambling proceeds from U.S. citizens to the owners of overseas Internet gambling companies.
Lefebvre was arrested Monday in Malibu, California. Lawrence, who resides in Paradise Island, Bahamas, was arrested Monday in the U.S. Virgin Islands.
They joined in 1999 to found Neteller, which is based in the Isle of Man and is publicly traded in the United Kingdom.
Lawrence left the company’s board of directors in October and Lefebvre left in December 2005, prosecutors said.
The company’s announcement noted the arrests of its former directors, but said the decision to cease gambling transfers in the United States “reflects the culmination of a series of deliberations and steps the group has taken since the passing of the UIGEA (Unlawful Internet Gambling Enforcement Act) in October 2006.”
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It has been reported that the founding partners of Neteller were arrested today, one on the west coast in Los Angeles and one on the east coast in New York.Steve Lawrence and John LeFevre established Neteller in 1999 although both are now removed from the company, John in 2002 and Steve as of October 13th, 2006. Many will recognize that as the date the UIGEA and Safe Port act was signed into law by President Bush.Read full article
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Neteller today updated their Frequently Asked Questions section to reflect the announcement made that March 20, 2007 they had struck a deal with the US Department of Justice for the repayment of held funds. When will US customers get their money back? The recent agreements between NETELLER, Navigant Consulting, and the US Attorney’s Office (USAO) represent an important step in the process of an orderly distribution of funds to US customers.Read full article
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Well the expected announcement from Neteller regarding the release of funds from US accounts arrived and the expected details of prompt money distribution did not. In a statement released by Neteller, it was stated “we are disappointed not to have been able to return funds to our US customers at this point, we believe that the steps we have made in our discussions are significant and we hope to be able to announce further progress with the USAO by 13 July 2007.Read full article