US Prosecutors Are Reason US Customers Can't Access Funds According To Neteller

08 February 2007

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CNNMoney.com
February 8 2007: 9:11 AM EST

LONDON (Reuters) — British payment processor NETeller said Thursday U.S. prosecutors had seized funds, stopping U.S. customers from accessing their money, the latest move in an online gaming sting.

NETeller, which quit the United States last month after authorities arrested its two founders, said it was cooperating with an investigation by the U.S. Attorney’s Office (USAO) for the Southern District of New York.

“The amount of funds seized by the USAO or otherwise restricted by third parties does not exceed $55 million,” said NETeller, which abandoned 65 percent of its business by quitting the United States.

The move is the latest in a U.S. crackdown on online gaming, which began with the arrest of BETonSPORTS’ Scottish Chief Executive David Carruthers in Texas last July.

An industry source earlier told Reuters, “It’s not NETeller stopping customers getting to their cash. It’s the FBI.”

Canadian founders, Stephen Lawrence, 46, and John Lefebvre, 55, have been charged with handling billions of dollars in illegal gambling proceeds. Both face a maximum sentence of 20 years in prison.

“As a result of the restrictions placed by third parties, court-ordered seizures, and related legal concerns, the group is currently unable to make payments to U.S. customers,” said NETeller.

The FBI and U.S. Attorney’s Office were not immediately available. A recent article in USA Today quoted FBI Agent Neil Donovan saying funds from NETeller are being held in court as potential evidence. Some customers may get their money back, he was quoted as saying, but did not provide a timetable.

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