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NETELLER Founders Arrested by FBI, Charged with Money Laundering

by PokerPages.com
Wed, Jan 17th, 2007 @ 12:00am

NETELLER founders Stephen Lawrence (46) and John Lefebvre (55) have been charged with money laundering offences. The case against the two ex-NETELLER directors, who were arrested Monday in the United States, was outlined late Tuedsay by the US Attorney General in the Southern District of New York.

A statement from the office of U.S. Attorney Michael Garcia relayed that Lawrence and Lefebvre were arrested Monday January 15 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 US citizens to the owners of various internet gambling companies located overseas".

NETELLER claims to operate the largest independent online money transfer business in the world with 3 million customers in 160 countries and over US$7 billion in annual transactions. It is used extensively by a majority of online poker players to fund online accounts.

NETELLER is a publicly traded company on the London Stock Exchange. Most company executives reside in and around the Isle of Man, located just off the coast of Great Britain, which serves as a primary online gambling jurisdiction.

Before the indictment was released, NETELLER suspended its share trading on the AIM London Stock Exchange Monday, as the company was seeking clarification of its status with US authorities. The shares closed yesterday at 176 pence (about US$3.46), valuing the company at 211.1 million pounds (US$414 million).

In a statement from NETELLER, a company spokesman stressed that the founders were no longer employees or directors of the company. "Because of that, this arrest has nothing to do with the company," he added.

Mr Lawrence resigned as a non-executive director of the company on October 13, having stepped down as non-executive chairman last May. Mr Lefebvre resigned as a non-executive director on December 15, 2005.

However, the pair still own large stakes of NETELLER. Mr Lawrence holds 5.91 per cent of the company, while Mr Lefebvre owns 5.54 per cent.

Lawrence and Lefebvre were arrested early Monday morning, January 15. Both are Canadian citizens.

Lawrence, who resides on Paradise Island in the Bahamas was arrested in the US Virgin Islands and will be presented in federal court in St Thomas by January 17. Lefebvre was arrested where he owns a home in Malibu, California, and was to be presented in a Los Angeles court late January 16.

The charges against Lefebvre and Stephen Eric Lawrence were contained in two criminal complaints unsealed in U.S. District Court in Manhattan on Monday, U.S. Attorney Michael Garcia said.

Lefebvre and Lawrence were charged in connection with the creation and operation of an Internet payment services company that allegedly facilitated the transfer of billions of dollars of illegal gambling proceeds from U.S. citizens to the owners of overseas Internet gambling companies.

The prosecutor said the men knew when they took their company public that its activities were illegal.

Prosecutors cited NETELLER's 2005 annual report saying that Lawrence and Lefebvre enabled the company to provide payment services to more than 80 percent of worldwide gaming merchants. Together, the men owned as much as 35 percent of the company's outstanding shares, officials claimed.

Garcia noted that the company acknowledged when it went public that U.S. law prohibited people from promoting certain forms of gambling, including Internet gambling and transmitting funds that are known to have been derived from criminal activity.

Lefebvre and Lawrence also conceded in the company's offering documents that they were risking prosecution by the U.S. government, he said.

Lawrence and Lefebvre could face a maximum of 20 years in prison if convicted.

As we went to press no information was available whether the two men would be released on bail. We will continue to cover their progress.

The case is U.S. v. Lawrence, 07-00012, U.S. District Court for the Southern District of New York (Manhattan).

 

 
 

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