[bigboydan]

Ex-NETeller exec pleads guilty in gambling case

Ex-NETeller exec pleads guilty in gambling case

By Christine Kearney

NEW YORK (Reuters) - A former president and co-founder of payment processor NETeller pleaded guilty on Tuesday to a conspiracy charge related to handling billions of dollars in illegal gambling proceeds.

John Lefebvre, 55, entered the plea before U.S. District Judge P. Kevin Castel during a hearing in Manhattan, just days after co-founder Stephen Lawrence also pleaded guilty in the case.

Lefebvre, a Canadian Citizen who ran NETeller's business operations, agreed to cooperate with the government as part of a plea deal. He faces up to five years in jail when he is sentenced on November 1.

During the hearing, Lefebvre admitted promoting Internet gambling. Its legality was ambiguous in the United States for many years, but was effectively banned last October when President George W. Bush signed legislation outlawing gaming financial transactions.

"I eventually came to see that promoting payment services to online gambling businesses serving customers in the United States was wrong," Lefebvre said.

Prosecutors said both Lefebvre and Lawrence provided payment services to offshore Internet gambling businesses through NETeller, a Canadian company based in the Isle of Man.

Lefebvre pleaded guilty to a wide-ranging conspiracy charge that included transmitting interstate and foreign bets, promoting gambling offences and operating an unlicensed money transmitting business between 1999 and 2007.

Lefebvre and Lawrence were arrested in January, leading NETeller to quit the United States, abandoning two-thirds of its business.

Last month, Britain's NETeller said it agreed to a plan for U.S. customers to access their money for the first time since the online payment processor's U.S. funds were frozen in February.

A crackdown on Internet gambling by U.S. authorities began a year ago with the arrest of BETonSPORTS's then-chief executive, David Carruthers.

In May, BETonSPORTS pleaded guilty to U.S. racketeering charges and agreed to help the authorities in cases against founder Gary Kaplan and other co-defendants, including Carruthers.

The online gambling ban passed last year made it illegal for banks and CC companies to make payments to online gambling sites. At least one U.S. congressman favours a bill exempting poker and some other games from the ban.

(c) Reuters 2007. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.

This article: http://business.scotsman.com/latest.cfm?id=1078622007

Last updated: 10-Jul-07 21:33 BST

[MaxDemo]

Wonder if he shows back up for his Nov 1 hearing??

[wrongturn]

Don't know if the news is good or bad, but at least it is moving forward.

[bigboydan]

He had no choice but to change his plea after Lawrence sung like a cannery.

[SBR_John]

They were not looking good. I think they did the right thing to cut a deal. The fact that they are allowed to leave the US until sentencing is probably a good indicator that they are not going to do much time and a prohibited favorite not to do any. They will pay a big fine but they can make a little of that back by being able to dump their remaining Neteller shares which they can't do now. I would guess Neteller can now move forward, pay their US clients and resume trading of their common shares.

[isetcap]

They were not looking good. I think they did the right thing to cut a deal. The fact that they are allowed to leave the US until sentencing is probably a good indicator that they are not going to do much time and a prohibited favorite not to do any. They will pay a big fine but they can make a little of that back by being able to dump their remaining Neteller shares which they can't do now. I would guess Neteller can now move forward, pay their US clients and resume trading of their common shares.

This is the final piece to the puzzle for Neteller to move forward according to their self-imposed July 13 deadline.

[bigloser]

A show trail straight out of 1950s Russia. Even the statements sound familiar "I eventually came to see that"
a) US capitalism is polluting the world
b) Promoting payment services was wrong

[Dark Horse]

I eventually and especially came to see that:

c) It was wrong for us to step into the limelight without first greasing the wheels of politicians in DC (both sides of the aisle).