$5 MILLION BAIL for EX- NETELLER
John Lefebvre to be released but must
remain in the USA
Late breaking news Wednesday morning in the
USA is that former Neteller executive and
founding shareholder John Lefebvre has been
granted bail following an appearance in
court in Los Angeles.
Department of Justice spokeswoman Rebekah
Carmichael said, "He will be released after
satisfying the bail conditions of $5 million
fully secured by cash or property; pre-trial
supervision; surrender of all travel
documents; and travel restricted to the
Central District of California, except for
trips to Southern District, New York for
Fellow accused in money laundering charges
(see previous InfoPowa reports) Stephen
Lawrence is currently in court in St Thomas
in the US Virgin islands.
Both defendants are being directed to appear
in the Southern District, New York on
January 26, 2007.
EX-NETELLER DIRECTORS CHARGED (Update)
Money laundering offences claimed by US Attorney
The case against two ex-Neteller directors
arrested Monday in the United States (see previous
InfoPowa reports) was outlined late Tuesday this
week by the US Attorney General in the Southern
District of New York.
Although they no longer have management connections
to the Isle of Man financial company, Neteller
founders and Canadian citizens Stephen Lawrence (46)
and John Lefebvre (55) have been charged with money
A statement from the office of AG Michael Garcia
revealed that Lawrence and Lefebvre had been
arrested 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
Lawrence and Lefebvre were arrested in the early
hours of Monday morning, January 15. Lawrence, who
resides on Paradise Island in the Bahamas was
arrested yesterday in the US Virgin Islands and will
be presented in federal court in St Thomas by
tomorrow. Lefebvre was arrested in Malibu,
California, and will be presented in a Los Angeles
court later today.
The charges against Lefebvre and Stephen Eric
Lawrence were contained in two criminal complaints
unsealed in U.S. District Court in Grand Mondial Casino
$2500 Free on
Monday, U.S. Attorney Michael Garcia said.
The prosecutor said the men knew when they took
their company public that its activities were
"Blatant violations of U.S. law are not a mere
`risk' to be disclosed to prospective investors,"
Garcia said. "Criminal prosecutions related to
online gambling will be pursued even in cases where
assets and defendants are positioned outside of the
FBI Assistant Director Mark J. Mershon said the
multibillion-dollar online gambling industry was "a
colossal criminal enterprise masquerading as
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.
Prosecutors cited Neteller's 2005 annual report in
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.
Prosecutors said Neteller in 2005 alone processed
more than $7.3 billion in financial transactions, 95
percent of which was derived from money transfers
involving Internet gambling.
Lawrence and Lefebvre, both charged with conspiring
to transfer funds with the intent to promote illegal
gambling, could face a maximum of 20 years in prison
As we went to press there was no information
available on whether the two men would be released
CLAIMS BY THE PROSECUTION
What the feds say Lawrence and Lefebvre did wrong
The two Neteller ex-directors now in US federal
custody have the wealth and apparently the will to
engage in a protracted legal battle against the
allegations made against them. This has drawn
attention to the details of the case, which has
apparently been under investigation since June 2006,
according to the FBI special agent responsible,
Goldman entered the charges before the honorable
Debra S. Freeman, a US Magistrate Judge in her court
in the Southern District of New York. The "County of
Offence" is listed as New York/Westchester.
The charges against Lawrence read:
- From in or about June 1999, up to and including
in or about January 2007, in the Southern District
of New York and elsewhere, STEPHEN ERIC LAWRENCE,
the defendant, and others known and unknown,
unlawfully, willfully and knowingly did combine,
conspire, confederate, and agree together and with
each other to violate Section 1956(a)(2)(A) of Title
18, United States Code.
- It was a part and an object of the conspiracy
that STEPHEN ERIC LAWRENCE, the defendant, and
others known and unknown, would and did transport,
transmit, and transfer monetary instruments and
funds from a place in the United States to and
through a place outside the United States and to a
place in the United States from and through a place
outside the United States with the intent to promote
the carrying on of specified unlawful activity, to
wit, the operation of illegal gambling businesses in
violation of Title 18, United States Code, Section
1955, the illegal transmission of wagers and
gambling information, in violation of Title 18,
United States Code, Section 1084, and the commission
of gambling offenses in violation of both New York
State Penal Law, Article 225, and anti-gambling
statutes in other states.
Goldman goes on to detail "overt acts" which include
the formation of the Neteller group in company with
Levfebre to provide online payment services to
internet gambling businesses.
"Beginning in or about July 2000, and continuing
up to in or about December 2003, LAWRENCE, CC#1, and
others affiliated with the Neteller Group offered
online payment services through Neteller Inc., a
Canadian corporation, to various internet gambling
businesses so that these businesses could illegally
access customers in the United States, including
customers in and around New York City," she
continues. Similar claims are made regarding the
period January 2004 to January 2007 regarding
Neteller operations on the Isle of Man.
The special agent alleges that the accuseds and
other Neteller employees raised $70 million in an
IPO on the London Stock Exchange to expand the
Goldman reveals that she has been involved in an FBI
investigation of the case since June last year, and
claims: "The investigation has revealed that
Neteller PLC conducts and facilitates illegal
financial transactions between gambling customers in
the United States and numerous offshore online
She adds: "This complaint is based upon my
involvement in the investigation, my conversations
with other law enforcement officials and witnesses,
and my examination of reports, records, and tapes.
Because this complaint is being submitted for the
limited purpose of establishing probable cause, it
does not include all the facts that I have learned
during the course of this investigation. Where the
contents of documents and the actions, statements,
and conversations of others are reported herein,
they are reported in substance and in part, except
where otherwise indicated.
The investigation also involved checking the
official statements and records of Neteller,
describing the history, development and services of
the group, from which she quotes details of the IPO
prospectus and those involved. ".....more than 95
percent of the revenues generated by the Neteller
Group, is derived from processing money transfers
pertaining to the online gambling market; and that
on or about March 1, 2004, Neteller PLC had 685,945
member accounts, of which approximately 88 percent
belonged to North American residents," she
quotes from the documentation.
Financial details published by the company in 2004,
2005 and 2006 are also described in some detail,
including first half of 2006, when Neteller PLC
processed $5.1 billion in financial transactions,
and that approximately 85 percent of Neteller PLC's
revenue during that period derived from individuals
in North America.
Details of a Neteller conference call with financial
analysts are discussed, and the agent reveals that
as part of the investigation, US law enforcement
officers and a cooperating American witness posed as
gambling customers and conducted online monetary
transactions with numerous online gambling
businesses using online payment processing services
provided by Neteller PLC to gamble on the Internet.
Some of these are detailed.
Records of ACH, wire services and other financial
instruments are also explained.
Finally, Special Agent Goldman details Neteller
official public statements to show the active
management involvement with the company (prior to
standing down) of Lawrence, using these to indicate
that he was aware that the US activity was illegal.
Was NETELLER's Ban on
U.S. Players Premeditated?