NETELLER Founders Released on $5Million Bail

Former Neteller co-founder John Lefebvre has been released on bail after an appearance in court in Los Angeles, while co-founder Stephen Eric Lawrence was also released after posting the same amount of bail- US$5 million (approx. 2.54 million Pounds or 3,85 million Euros), after he appeared in a U.S. Virgin Islands court yesterday.

Lawrence was required to board a direct commercial flight to New York under FBI supervision and surrender his passport as provisions of his release. He is also required to appear at a court hearing in New York on January 26.

Lawrence did not speak at the Thursday hearing, at which he wore ankle chains. He also declined to comment upon leaving the courthouse in Charlotte Amalie, capital of the U.S. Caribbean territory.

Likewise, Lefebvre's conditions of bail required him to be under pre-trial supervision, to surrender all travel documents and restrict travel to the Central District of California, except for trips to Southern District, New York for Court to appear for his hearing on January 29.

Both NETELLER founders and ex-directors of the company are accused of "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" according to a statement released from the office of U.S. Attorney Michael Garcia.

Specifically, they are being charged for money laundering under the 1961 Wire Act, for handling transactions with online sports betting companies, as was demonstrated by an FBI agent from their NETELLER account during 2005.

While their arrests may be to reinforce the Unlawful Internet Gambling Enforcement Act (UIGEA) signed into law last October, which makes it illegal for financial institutions to handle online gaming transactions from US residents, it is worth noting that the NETELLER founders are being prosecuted under the 1961 Wire Act that pertains only to illegal sports betting transactions, and not to online poker.

If convicted, they face up to 20 years in prison, authorities said.

The two men founded NETELLER in 1999, basing it in the Isle of Man. The company began processing Internet gambling transactions in 2000.

In a statement from NETELLER, a company spokesman stressed that the founders were no longer employees or directors of the company. Lawrence resigned as a non-executive director of the company on October 13 2006, having stepped down as non-executive chairman the prior May. Lefebvre resigned as a non-executive director on December 15, 2005.

Together, the men owned as much as 35 percent of the company's outstanding shares at one point, prosecutors say. Today the pair still own large stakes of NETELLER; Lawrence holds 5.91 per cent of the company, while Lefebvre owns 5.54 per cent.

NETELLER announced yesterday that it stopped handling gambling transactions from U.S. customers, as outlined in a prior PokerPages Article.

"As of today [January 18] ... U.S. resident customers were no longer able to transfer funds using Neteller's services to or from any online gambling site," NETELLER relayed 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 January 16 following the arrests of the two former directors. The shares had closed at 176 pence (about US$3.46 or 2.68 Euros), valuing the company at 211.1 million pounds (US$414 million or 321.22 million Euros).

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