[Ganchrow]

Neteller Founder Guilty of Conspiracy
By DAVID B. CARUSO 06.29.07, 5:00 PM ET

The co-founder of Neteller, which processed billions of dollars in Internet gambling transactions for Americans, pleaded guilty Friday to a charge of criminal conspiracy.

Stephen Lawrence, whose company was once one of the primary ways U.S. citizens placed bets with offshore bookies, acknowledged in a federal courtroom in Manhattan that the operation was illegal.

"I came to understand that providing payment services to online gambling Web sites serving customers in the United States was wrong," he told the judge.

His lawyers said he was cooperating with U.S. investigators, and had also agreed to be at least partly responsible for the $100 million the government is seeking from people who were involved in the operation.

Lawrence and another Neteller PLC director, John David Lefebvre, were arrested in January as part of a U.S. crackdown on the online gambling industry.

Both men are Canadian citizens. Their company was based in the Isle of Man and traded on the London Stock Exchange. Some experts had initially believed that the company's offshore status might put it beyond the reach of U.S. law.

Neteller also wasn't directly involved in either placing or taking bets. It essentially served as a financial middleman, through which bettors could send and receive cash from Internet bookies.

Industry experts estimate that Americans bet $6 billion a year online.

Founded in 1999, Neteller grew fast as spooked CC companies, worried about legal liability, stopped doing business with offshore gambling operations.

Prosecutors said Neteller processed $5.1 billion worth of transactions - nearly all involving online gambling - in the first half of 2006. A majority of the revenue came from customers in the U.S.

The FBI began looking at Neteller's operations in June 2006. Lawrence, at one point, was the company's largest shareholder.

The company announced within days of the arrests of Lefebvre and Lawrence that it would no longer process online gambling transactions for U.S. customers. Both men have left the company's board of directors.

Lefebvre pleaded not guilty. His case is still pending.


AP

[20Four7]

in my mind this is bull. Yes they were a middleman but at no point was there a law against processing wagers to/from a bookie/poker room etc. I think he received bad legal advise. He's doing it probably so he can serve his time in a CND jail and be out quicker than paris hiltons panty's come off.

[vanzack]

Im sure this was an easy way for him to get out of this and get it behind him.

[katstale]

I would be shocked if he spent a day in jail. He did nothing wrong--he knows it and so does our government. This was all abt show/theater. It obviously served it's purpose and he will pay a fine and retire with his billion thats left. End of story for him. Smart move on his part.

[LVHerbie]

Definently looks like a just a deal was made and he is saying is the BS that he is expected to say... This is how they legal system works in the US... Cost less money for both parties, doesn't tie up the jail cells, and the gov't gets good quotes for the papers... everyone is happy...

[bigboydan]

Lefebvre pleaded not guilty. His case is still pending.

And Stephen Lawrence pleads guilty

Thats just too fvcked up IMO... Come on at least go down together on these bogus charges they levied against you. Now we all know that Lefebvre doesn't stand a chance of beating this rap at all now, because of his friend cooperating and giving the U.S. even more fire power against him.

[Helmut]

Man, this Stephen Lawrence guy needs to hire a better lawyer. The Feds virtually have him by his oyster.

No Shit, What a pussy!

[SBR_John]

Good post Sean. I pretty much agree. He was looking at 30+ years and fines. Now he's looking at no jail time and probably no probation either but he is looking at a massive fine. Seems like a good deal for everyone. I think the other fellow will follow suit and this will quietly go away.

[tblues2005]

Sean

That wouldn't surprise me one little bit if he did just that too just to get back and the waste of time he spent here in a jail.

[Seattle Slew]

If they had stayed out of the U.S. in the first place, this never would have happened.

How this guy could think he could run that business off US residents' gambling funds and buy a beach house in Malibu is beyond stupid.

And they already are holding $55,000,000 of his money (Shell accts) so his negotiating on the fine is basically zero.

The minute they said here's your passport, he said ok.

Would love to see him start a new neteller and just stay out of the U.S. Would serve the feds right...

Sean

[Dark Horse]

Meanwhile, a less high profile, but similar case was also in court this week:

Judge Rules Against e-gold In Seizure Warrant Motion
Mark Herpel

June 26, 2007

There was some bad news earlier today on a private email list which stated that last week’s motion by e-gold defendants to release their seized gold funds had been denied. The actual text is here:

MINUTE ENTRY ORDER denying [35], [36] Defendants’ Motion to Vacate Seizure Warrant and to Modify Restraining Order and Request for an Evidentiary Hearing. For the reasons stated at the June 21, 2007 hearing, in open court, the Defendants’ Motion is hereby DENIED. This is a final appealable order. See Fed. R. App. P. 4(a).

Signed by Judge Rosemary M. Collyer on June 22, 2007. (cdw)

The seized assets shall remain frozen.

If you are just tuning in, back in late April, a federal grand jury in Washington, D.C. indicted two companies, E-Gold Ltd and Gold & Silver Reserve, Inc, and their owners Dr. Douglas L. Jackson, Reid A. Jackson and Barry K. Downey on charges of money laundering, conspiracy and operating an unlicensed money transmitting business.

All of these charges have been vigorously denied by the e-gold camp plus e-gold is still operating and the e-metal issued by them is still widely used around the globe. Their primary dealer, OmniPay is on a quick hiatus and now has an ongoing move of their business out of the US and into a west African nation. We should hear move positive news on OmniPay in the coming weeks.

At the time of the indictment, the DOJ also issued two dozen seizure warrants on something like 60 e-gold accounts which they said currently held property involved with the alleged money laundering and/or the alleged unlicensed money transmitting business.

One or several of the seized accounts held the e-gold that was backing 1MDC (the fast and convenient payment system built around e-gold). 1MDC was a great online system that offered storage of your digital gold without monthly fees. Unfortunately, if you had a 1MDC account at the end of April, you lost all account value during the government’s seizure of the e-gold accounts!

1MDC accounts are still intact, but the units no longer have any value. Over the past few weeks, there has been some buying and selling of 1MDC between existing account holders below market prices. Not surprisingly, a few people had hopes that if 1MDC came back from the dead, they could profit from it’s resurrection.

If last week’s hearing had vacated the seizure and released the funds, 1MDC may have taken it's first steps towards value. That did not happen and I think any tiny hope of a 1MDC comeback is now fading.

It is a bit like understanding the Beatles will not be getting back together because you just realized today that some of them are already dead...it ain’t going to happen.

The hearing, which occurred last Thursday, was to vacate the Seizure Warrant and release the funds from the entire asset seizure. Unfortunately, the Judge denied it and consequently 1MDC shall remain worthless. All of these seized funds (all 58 accounts) holding an estimated $11-$16 million is still being held by the government pending an outcome from this mess.

I don’t have any inside information on the current e-gold legal matters, but it does not seem that the government or the defendants are looking for any type of plea agreement right now. Stay tuned….

Neteller and E-gold charged with money laundering? Coincidence? Or are we seeing the hand here of the world banks, which are owned by a small group of people? I'd be willing to bet that we will see other online payment services replace Neteller and E-gold that are owned by those very people. (If you're not part of their little elite group, and become too powerful, they will take you down.)

[UncleChris]

Or are we seeing the hand here of the world banks, which are owned by a small group of people? I'd be willing to bet that we will see other online payment services replace Neteller and E-gold that are owned by those very people. (If you're not part of their little elite group, and become too powerful, they will take you down.)

Good point Dark. I wouldn't wondering neither if things will come that way...after all its all about money.

[Dark Horse]

And who do you think have bought our politicians (and, by extension, much of the judicial system; when needed.)? It's a bit darker out there than you and I might have preferred.

[Seattle Slew]

Earlier post was in error. It was Lefebvre who owned the beach house in Malibu, not Lawrence.

How this guy could think he could run that business off US residents' gambling funds and buy a beach house in Malibu is beyond stupid.

[ferndog]

So the Feds are going to report all the customers that used Neteller to the IRS?

[tblues2005]

ferndog,

That ones that showed a profit, probably... The ones that lost money to gambling, nope!

[JoshW]

Not sure if this good for those of us waiting on fund in the US or not.

[smallon]

What gets me is the US government having the balls to try and prosecute someone who's not even a US citizen FOR RUNNING NETELLER! Unbelievable the ballsack on this friggin government. And just today I watched a CNN podcast about the US government being a "broken government." I wonder why....fvcking idjits.

[Dark Horse]

What gets me is the US government having the balls to try and prosecute someone who's not even a US citizen FOR RUNNING NETELLER! Unbelievable the ballsack on this friggin government. And just today I watched a CNN podcast about the US government being a "broken government." I wonder why....fvcking idjits.

The old paradigm of national interests is fast becoming outdated. It is being replaced by international corporations controlling a global economy. Their financial contributions are invariably to both US parties.

http://www.opensecrets.org/industries/index.asp

The above site makes for some great surfing for those with an interest in 'reading' the numbers. Just looking at the weapon industry and commercial banks, it shows that both gave about the same to Democrates and Republicans until 1996. Since then (!) their contributions to Republicans roughly doubled that to Dems...

Any connection between this annual graph and the fact that our troops are still in Iraq?
http://www.opensecrets.org/lobbyists/indus.asp?Ind=D


For the record, I did a 'Neteller' search for lobbying funds, and .... nada. Oops!

[bigboydan]

Neteller Founder Pleads Guilty In Online Gambling Case

NEW YORK — The co-founder of a company that processed billions of dollars in Internet gambling transactions for Americans pleaded guilty Friday to a charge of criminal conspiracy.

Stephen Lawrence, whose company, Neteller PLC, was once one of the primary ways U.S. citizens placed bets with offshore bookies, acknowledged in a federal courtroom in Manhattan that the operation was illegal.

“I came to understand that providing payment services to online gambling Web sites serving customers in the United States was wrong,” he told the judge.

His lawyers said he was cooperating with U.S. investigators, and had also agreed to be at least partly responsible for the $100 million the government is seeking from people who were involved in the operation.

Lawrence and another Neteller director, John David Lefebvre, were arrested in January as part of a U.S. crackdown on the online gambling industry.

Both men are Canadian citizens. Their company was based in the Isle of Man and traded on the London Stock Exchange. Some experts had initially believed that the company’s offshore status might put it beyond the reach of U.S. law.

Neteller also wasn’t directly involved in either placing or taking bets. It essentially served as a financial middleman, through which bettors could send and receive cash from Internet bookies.

Industry experts estimate that Americans bet $6 billion a year online, and, for a while, Neteller had captured a huge percentage of their business.

Founded in 1999, the company grew fast as spooked CC companies worried about legal liability stopped doing business with offshore gambling operations.

Prosecutors said Neteller processed $5.1 billion worth of transactions — nearly all involving online gambling — in the first half of 2006. A majority of the revenue came from customers in the U.S. The FBI began looking at Neteller’s operations in June 2006. Lawrence, at one point, was the company’s largest shareholder.

The company announced within days of the arrests of Lefebvre and Lawrence that it would no longer process online gambling transactions for U.S. customers. Both men have left the company’s board of directors.

Lefebvre pleaded not guilty. His case is still pending.

[pags11]

maybe now people will realize they aren't getting their money back...

[louis]

He would just rather plea bargain, and so would the government. You bet he made a deal; he didn't just decide to plea guilty to whatever the government was asking for.

I doubt he is going to jail.

[tacomax]

maybe now people will realize they aren't getting their money back...

Sharp post. How much did you lose from the Neteller theft?