Neteller Co-Founder Stephen Lawrence Helped Web Sites Draw U.S. Players
The co-founder of Neteller, which processed billions of dollars in Internet gambling transactions for Americans, pleaded guilty Friday to a charge of criminal conspiracy.
Stephen Lawrence, whose company, Neteller PLC, was once one of the primary ways U.S. citizens placed bets with offshore bookies, acknowledged in a federal courtroom in Manhattan that the operation was illegal.
“I came to understand that providing payment services to online gambling Web sites serving customers in the United States was wrong,” he told the judge.
His lawyers said he was cooperating with U.S. investigators, and had also agreed to be at least partly responsible for the $100 million the government is seeking from people who were involved in the operation.
Lawrence and another Neteller director, John David Lefebvre, were arrested in January as part of a U.S. crackdown on the online gambling industry.
Both men are Canadian citizens. Their company was based in the Isle of Man and traded on the London Stock Exchange. Some experts had initially believed that the company’s offshore status might put it beyond the reach of U.S. law.
Neteller also wasn’t directly involved in either placing or taking bets. It essentially served as a financial middleman, through which bettors could send and receive cash from Internet bookies.
Stephen Lawrence, 47, co-founder of Neteller, an online payment processing solution that catered mostly to Internet casinos, sportsbooks and poker rooms, has plead guilty to a conspiracy charge. Lawrence will cooperate with the US government while facing up to a 5 year sentence.
“Mr. Lawrence is very glad to have this episode over and looks forward to moving on to the next stage of his life,” attorney Peter Neiman said after the hearing.
Lawrence is allowed to travel within the United States, Canada and the Bahamas. He will face sentencing on October 29.
“Conspiracy” is an agreement between two or more people to break the law at some point in the future or to accomplish a legal end through illegal actions. The parties (in a conspiracy matter) must “intend” or “know” the facts which make the conduct criminal even where the full offence is strict.
A conspiracy may exist when the parties use legal means to accomplish an illegal result, or to use illegal means to achieve something that in itself is lawful.
One of the more interesting aspects of this admission is where the customer stands, assuming he or she was not committing a crime.
Law.com illustrates an example whereby a scheme is hatched by a group of salesmen to sell used automobiles as new. Not only could this be prosecuted as a crime of fraud and conspiracy, but a purchaser of an automobile sold by these salesmen can now sue for damages [in civil court] for the fraud and conspiracy. US customers are yet to be paid funds owed to them by Neteller.
For customers concerned over legal ramifications of their own betting activity, it should be pointed out that only a handful of state laws make it illegal to place a bet, and in most cases this would be considered a misdemeanor. Federal law does not make placing a bet a crime even following the controversial passage of the UIGEA (Unlawful Internet Gambling Enforcement Act).
The common fear, however, is failure to claim taxes on gambling wins. Furthermore, there are some instances where individual customers could be found in violation of laws (both state and federal) and perhaps even co-conspirators. Neteller could easily be used as an instrument for laundering money. Large sums of money transferred to and from Neteller will likely raise the eyebrows of agents reportedly in the process of reviewing transaction history.
