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http://www.neteller-group.com/press/en/124.htm
Press Release
NETELLER Works to Return Funds to US Customers After US Withdrawal8 February 2007 – NETELLER Plc (LSE: NLR), the leading global independent online money transfer business, today issued the following update with regard to its US business and criminal charges against two of its founders.
On 19 January 2007, at the request of the Group, the Group’s legal advisers met with representatives of the United States Attorney’s Office for the Southern District of New York (“USAO”) to clarify the Group’s position with respect to the complaints brought on 16 January 2007 against two of the Group’s founders, Mr. Stephen Lawrence and Mr. John Lefebvre. Neither are current employees or directors of NETELLER. In that meeting, the Group pledged to cooperate with the USAO, indicated it was prepared to begin document production promptly and discussed a potential mechanism for arranging an orderly repayment of funds to US customers.
The discussions between the Group’s legal advisers and the USAO are ongoing. The Group is, under advice of its legal advisers, commencing production of documents and intends to cooperate with the USAO in its investigation.
Following upon the complaints dated 16 January 2007, banks in the US began declining to permit transactions involving the Group through accounts maintained at one or more automated clearinghouses in the United States. Additionally, the Group has been advised that the USAO has obtained court-ordered seizure warrants seizing funds pertaining to the Group’s transactions. To the best of the Group’s knowledge, it believes that the amount of funds seized by the USAO or otherwise restricted by third parties does not exceed US$ 55 million. These funds were largely in the process of being transferred from the Group to its US customers or vice versa.
As a result of the restrictions placed by third parties, court-ordered seizures, and related legal concerns, the Group is currently unable to make payments to US customers. Nevertheless, the Group is in discussions with the USAO to manage an orderly return of funds to US customers. As part of these discussions, it is contemplated that the USAO will engage a forensic accounting firm, at the Group’s expense, to assist in this process and to examine the Group’s financial position. “The return of funds to our US customers is a top priority for NETELLER” said Ron Martin, Group President and CEO. US customers wishing to withdraw funds from their NETELLER e-wallet accounts will experience ongoing delays while these discussions continue, and a further update will be provided by the Group once effective repayment mechanisms are determined.
To the Group’s knowledge, no criminal action or proceeding has been brought against the Group, its current officers or directors by the USAO. Nevertheless, there can be no assurance that the Group will not be charged in a criminal action at some subsequent time. The Group intends to work with the USAO to seek a negotiated resolution of any allegations relating to its US activities. Any resolution of this matter may lead to potential sanctions against the Group including material financial penalties, fines and forfeitures.
It is emphasized that in line with the Group’s standard business practices for all customers, funds held by the Group for US customers are held in segregated trust accounts. The Group’s own cash position remains strong and the Group currently has sufficient working capital to fund all its customers’ balances as well as ongoing requirements of the business.
NETELLER remains committed to developing its business in line with its stated strategic objectives including geographical and product diversification for all markets. The Group will focus on its continuing business and the opportunities available in the growing markets of Europe, Asia and the Americas outside of the United States. Since the Group’s withdrawal from the US market on 18 January 2007, average daily new account sign-ups of new customers from non-US markets has been around 1,400. This compares to average daily sign ups of 3,303 for the year to 31 December 2006. Daily fee revenue since 18 January 2007 has averaged over US$ 200,000 per day (excluding any revenues from Netbanx, 1-Pay and interest income). These metrics demonstrate the resilience of the Group’s ongoing business. NETELLER customers not resident in the US continue to be minimally affected by this withdrawal from the US market.
In view of the continuing uncertainty, the Group’s shares will continue to be suspended from trading on AIM for the time being. Further announcements will be made as appropriate.
Thanks John – that’s a useful post !!
:Nod:“Additionally, the Group has been advised that the USAO has obtained court-ordered seizure warrants seizing funds pertaining to the Group’s transactions. To the best of the Group’s knowledge, it believes that the amount of funds seized by the USAO or otherwise restricted by third parties does not exceed US$ 55 million. These funds were largely in the process of being transferred from the Group to its US customers or vice versa. “
This is a major privacy rights issue! It’s not pertinent that the DOJ has the names,address,etc of people who did the transactions. All they need is the proof of transaction. Which they can do without, getting it to the customers personal level.
You have to love this part too:”As part of these discussions, it is contemplated that the USAO will engage a forensic accounting firm, at the Group’s expense, to assist in this process and to examine the Group’s financial position.”
Wait a minute, I thought the funds were in “Trust” and you were secure through FSA. WTF would you need an “Independent” accounting firm to evaluate your financial position? You do have the $$ to return to US customers right? What the hell!
In summation, if and when we do get our $$ back. Believe me Big Brother will know about it and how much. This is a gross infridgement on our Privacy which the ACLU should look into immediatly. I agree with the guys from Gambling911 when they say: “Even if your offshore, you have to be a complete idiot to keep your $$ in Neteller!”
The whole thing is just a big fishing expedition to gather information.
yah, and any USA affiliate who was dealing in large sums of money can, if they werent already, plan on being bolded on their watch list. I imagine we will all have our tax records, our banking records, and evereything else scrutinized to the 9th degree. :devil:
just think of how many us folks never thought to pay taxes on these funds. I have to believe its a big # and its going to be a field day
I cant help but hope that they are just going after sportsbook type transactions only. Please lord, please; pray with me. :rasta:
Bastards never had money held in trust, they lied to all of us and they damn well know it, they will do whatever it takes to cover their own asses and screw us all just to do it.
If anyone has not been paying tax on thier neteller affiliate revenue, I would recommend that you either:
1. Go back and refile your old taxes claiming you made an error and pay the amount owing including interest (this avoids penalties and criminal liability)
2. Move the hell out of dodge.
This is a fishing expedition, remember the US government could care less about gambling addiction this is to see how many lives they can wreck and how much money they can collect.
allfreechips wrote:just think of how many us folks never thought to pay taxes on these funds. I have to believe its a big # and its going to be a field dayBanks automatically report any deposits $10k or more to the IRS. This I know for sure and I heard (but never verified) that it changed to $5k after they created Homeland Security.
The irony of it all… the Govt. seeking tax payments from a supposedly illegal industry.
I find that the bigger irony is that if affiliate have paid tax on these earnings they could then be indicted for money laundering since the proceeds are from illegal gambling. I doubt this worst case scenario will happen but you never know. They would have difficulty proving where the funds originated from (us or non usa players)
slotplayer wrote:Banks automatically report any deposits $10k or more to the IRS. This I know for sure and I heard (but never verified) that it changed to $5k after they created Homeland Security.that is why neteller wouldnt let you withdraw that much at any single time!
NETELLER’S ‘OPEN AND HONEST’ CONSPIRACY
Online gambling: a “vice that in this country has to rank up there with eating a second slice of Mom’s apple pie while listening to “The Star-Spangled Banner.”
Writer Jacob Sullum produced another sharp article on the US government’s attitude to selected aspects of online gambling this week in a piece titled ‘Neteller’s Open and Honest Conspiracy’ carried by the Washington publication “Human Events.”
Referring to the recent arrests of Neteller founders Stephen Lawrence and John Lefebvre, charged with money laundering, Sullum writes that there was nothing sneaky about their “conspiracy.” In 1999 the two Canadians co-founded Neteller, an online payment processing company, now based in the Isle of Man, which openly specialised in serving online gamblers.
“The FBI’s investigation of Lawrence and Lefebvre, who were arrested last month and face a preliminary hearing in New York on Feb. 14, consisted mainly of reading their public company statements and using Neteller to bet on a couple of football games – a vice that in this country has to rank up there with eating a second slice of Mom’s apple pie while listening to “The Star-Spangled Banner,” Sullum opines.
“Yes, the feds really blew the lid off this publicly traded company that never made a secret of who its customers were or what it did for them.
“The impressive thing about the case, part of the Justice Department’s legally shaky crusade against online gambling, is not the evidence but the government’s sinister spin on it. The feds pretend they’re pursuing criminals while prosecuting honest businessmen for providing services Americans want.
“The money laundering charges against Lawrence and Lefebvre – which carry prison sentences of up to 20 years, 10 times the maximum penalty for the offense they supposedly facilitated – are based on the government’s claim that Neteller transferred money into and out of the United States ‘with the intent to promote the carrying on of specified unlawful activity.’
“According to Michael Garcia, the U.S. attorney for the Southern District of New York, the “unlawful activity” was taking online bets from Americans, which he describes as “a colossal criminal enterprise masquerading as legitimate business.”
“Others, including the millions of Americans who use the Internet to bet on sports or play games of chance, the companies that serve them and the foreign governments that license and regulate the companies, see things differently. They see a legitimate business that bluenoses with badges are determined to tar as a criminal enterprise because they can’t stand the idea that somebody in Westchester County might be playing poker in his pajamas,” says Sullum in an at times amusing but always thought provoking article.
The author goes on to explain the flaws in the Wire Act of 1961, which makes it a federal crime, punishable by up to two years in prison, to accept bets on “any sporting event or contest” via a “wire communication facility,” pointing out that this act does not make it illegal to place the bets, and it does not mention any other forms of gambling.
He writes that the Unlawful Internet Gambling Enforcement Act, which forbids processing payments for illegal online gambling but does not say which forms of online gambling are illegal, did not clarify matters. In any event, it did not exist when Lawrence and Lefebvre were involved with Neteller.
“Yet Garcia claims Lawrence and Lefebvre knew the betting Neteller abetted was illegal. As evidence, he cites the prospectus that was given to investors when Neteller went public in 2004, which notes the possibility of legal trouble in the United States.
“This attempt to use Lawrence and Lefebvre’s candour against them is pretty amusing, given that the same Justice Department has accused the Costa Rica-based BetOnSports of committing fraud by advertising itself as “legal and licensed.” As far as the federal government is concerned, no matter what people involved with online gambling say about the industry’s legal status, it proves they’re guilty.
“In any case, mentioning that anti-gambling crusaders might bend the law into a crowbar and wallop Neteller with it is not the same as believing such an assault is justified,” concludes Sullum.
“It is merely acknowledging that some people entrusted with government power may abuse it in a vain attempt to police the recreational choices of their fellow citizens.”
Online Casino News courtesy of InfoPowa
I guess I am an idiot, but I dont understand how the USA DOJ seized or frize Neteller funds? Was the estimated 55million in US banks? Surely if it were in another countries banks then DOJ would not have any authority to go after it.
If the money was caught in transit in intermediary banks located in the US I could see how they might have access to freeze that portion, but I am lost as to how they could freeze anything else.
Maybe Neteller has always banked in the US? Is that the case?
Also, I dont see why they are so eager to 100% cooperate with the DOJ by handing over paperwork. I would hope that the only paperwork that might be handed over would be that that pertains to the sportbooks wagers their plant made.
Does the US really rule the world? :drunk2:
