Posted by: Andy Lustigman
January 17, 2007
Topic: Internet and Privacy Law

As reported in the Times of London, the founders of Neteller -- Stephen Lawrence and John Lefebvre a publicly-traded UK online payments company, were arrested in connection with a multibillion-dollar money laundering indictment linked to Internet gambling.  According to published reports, the government has charged that the pair set up Neteller in 1999 with the express purpose of providing online payment services to gambling companies, and between 2000 and 2003, offered payment services to various Internet gambling companies so that they could illegally access customers in the United States. According to what is reported to be a DOJ press release , Neteller PLC ("Neteller"), formerly known as Neteller, Inc., is an Internet payment services company that was founded by Lawrence and Lefebvre in 1999. Neteller is based in the Isle of Man and is publicly traded in the United Kingdom. Neteller began processing Internet gambling transactions in approximately July 2000. Internet payment services companies, like Neteller, allow gambling companies to transfer money collected from United States customers to bank accounts outside the United States. According to Neteller's 2005 annual report, Neteller, provided payment services to more than 80% of worldwide gaming merchants.  According to reports, at the time that the defendants took Neteller public, the company acknowledged in its offering documents that United States law prohibited persons from promoting certain forms of gambling, including internet gambling, and transmitting funds that are known to have been derived from criminal activity or are intended to promote criminal activity. The company's directors also conceded that they were risking prosecution by the government of the United States under existing or future federal laws.  As previously discussed on this blog, and in our DM News article, this prosecution is part of the United States Department of Justice's growing effort to challenge Internet gambling involving United States residents, even against publicly-traded companies who business operates lawfully outside of the United States.

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