In related news, as expected Delaware Governor Jack Markell has signed legislation legalizing sports betting in that state. Neighboring state New Jersey’s press and lawmakers were quick to react.

I received this email today from Neteller. I logged into my account and requested a withdrawl of all funds. At this point I’m waiting for a check to arrive – we’ll see what happens.

The NETELLER Plc Group has announced that the distribution of funds to its US members will begin on July 30, 2007.

You are receiving this e-mail because our records reflect that you are a US member who may request funds from NETELLER. As of July 30, you will be able to make a request for funds on NETELLER’s website by signing in to your account. In the meantime, you should visit our online FAQs for more information about the distribution plan.

Please note that US members will not be able to request funds from the NETELLER website after January 26, 2008.

NETELLER Plc Group

Looks like Neteller has managed to save their skin by negotiating a deal with the U.S. Attorney’s Office. All charges will be dropped against Neteller in exchange for the handing over of $136 million in funds to the U.S. and cooperation into an investigation of online gambling sites.

The big question for iBet.pro readers of course is “where is our money??”. Ron Martin, NETeller president and CEO addressed the issue with the following statement:

“Our customers, employees and shareholders have all patiently waited for this resolution. We anticipate within the next few weeks that we will have fully implemented the plan for the return of funds to our US customers and are hopeful that, by that time, we will have restored the Company’s shares to trading on AIM.”

According to the articles I’ve read, the company’s goal is to begin the process no later than July 30.

United States Attorney
Southern District of New York
FOR IMMEDIATE RELEASE CONTACT: U.S. ATTORNEY’S OFFICE
July 18, 2007 YUSILL SCRIBNER,
REBEKAH CARMICHAEL
PUBLIC INFORMATION OFFICE
(212) 637-2600

ISLE OF MAN-BASED INTERNET PAYMENT COMPANY NETELLER PLC
ADMITS CRIMINAL WRONGDOING AND AGREES TO FORFEIT
$136 MILLION FOR CONSPIRING TO PROMOTE
INTERNET GAMBLING BUSINESSES
MICHAEL J. GARCIA, the United States Attorney for the
Southern District of New York, announced today that NETeller PLC
(“NETeller”) — an Internet payment business based in the Isle of
Man and publicly traded on the Alternative Investment Market
(“AIM”) of the London Stock Exchange — has admitted to criminal
wrongdoing and has agreed to forfeit $136,000,000 in criminal
proceeds as part of an agreement to defer prosecution of NETeller
for its participation in a conspiracy to promote Internet
gambling businesses and to operate an unlicensed money
transmitting business. A felony Information specifying the
charges against NETeller; a Statement of Admitted Facts by
NETeller; and the Deferred Prosecution Agreement, which was
accepted by United States District Judge P. KEVIN CASTEL, were
filed today in federal court in Manhattan.
The Charges
The felony Information filed today charges that
NETeller participated in a conspiracy, in violation of Title 18,
United States Code, Section 371, to: (i) use the wires to
transmit in interstate and foreign commerce bets and wagers on
behalf of persons engaged in the business of betting and
wagering, in violation of Title 18, United States Code, Section
1084; (ii) conduct illegal gambling businesses, in violation of
Title 18, United States Code, Section 1955; (iii) conduct
international monetary transactions for purposes of promoting
illegal gambling, in violation of Title 18, United States Code,
Section 1956(a)(2)(A); and (iv) conduct an unlicensed money
transmitting business, in violation of Title 18, United States
Code, Section 1960. The Information also contains a criminal
Forfeiture Allegation against all property involved in or derived
-2-
from the criminal wrongdoing, in the amount of at least $1
billion dollars.
The Criminal Wrongdoing
As set forth in the Information and the Statement of
Admitted facts:
In 1999, STEPHEN ERIC LAWRENCE and JOHN DAVID LEFEBVRE
began developing the Internet payment system that was used by
NETeller and its predecessors to provide online payment services
to Internet gambling companies. In April 2004, NETeller became a
public company and listed its shares for trading on the AIM of
the London Stock Exchange. At the time, NETeller openly stated
in its prospectus, issued in connection with its initial public
offering (“IPO”), that its conduct violated the law in the United
States.
At its peak in September 2005, NETeller had a market
capitalization of approximately $2 billion. Over the years,
NETeller and its predecessors processed more than $10 billion in
payment transactions for customers in the United States related
to the Internet gambling industry, and consistently derived
approximately 75% or more of its annual profits from such
transactions.
NETeller’s illegal conduct in the United States did not
end until January 2007, when LAWRENCE and LEFEBVRE were arrested
on warrants issued by the United States District Court for the
Southern District of New York. Earlier this month, both LAWRENCE
and LEFEBVRE pleaded guilty to charges that they conspired with
others to operate an unlicensed money transmitting business and
to promote illegal gambling by providing payment services to
enable offshore Internet gambling businesses to access customers
in the United States. LAWRENCE and LEFEBVRE each face a maximum
term of imprisonment of five years and a maximum fine of $250,000
or twice the gross pecuniary gain from the offense. In addition,
LAWRENCE and LEFEBVRE each admitted to forfeiture allegations
requiring them to personally forfeit an additional $100 million
dollars to the United States, which they are expected to pay in
full prior to sentencing. LAWRENCE and LEFEBVRE are currently
scheduled to be sentenced by Judge CASTEL on October 29, 2007.
In its Statement of Admitted Facts issued in connection
with the Deferred Prosecution Agreement, NETeller admitted that
NETeller and its predecessors, through the conduct of certain
officers and directors: (i) knowingly operated an unlicensed
money transmitting business in the United States; (ii) knowingly
-3-
agreed to promote illegal Internet gambling by using the wires
and other means to transmit in interstate and foreign commerce
bets and wagers from customers in the United States to numerous
Internet gambling businesses located outside of the United
States, and payments to customers in the United States from
numerous Internet gambling businesses located outside of the
United States; and (iii) intentionally took steps to avoid
detection and jurisdiction in the United States by operating in
the United States through agents and companies that were not
owned, but were controlled, by NETeller and its predecessors.
The Deferred Prosecution Agreement
As part of the Deferred Prosecution Agreement, NETeller
has agreed to forfeit $136 million in profits from its wrongdoing
to the United States in a civil forfeiture action. In addition,
NETeller will return to customers in the United States
approximately $94 million which NETeller currently has on deposit
in a foreign bank account. NETeller has also agreed to cooperate
fully with the Government. Under the Agreement prosecution of the
criminal charges against NETeller will be deferred for a period
of two years, until July 2009, if specified conditions are met.
At the end of that period, if NETeller has fully complied with
all the terms of the Agreement, the Government will move to
dismiss the Information.
In addition to the foregoing, the Agreement also
imposes permanent restrictions and controls on the operations of
NETeller, including, among other things, that: (i) NETeller will
not participate in illegal gambling transactions involving
persons located in the United States; (ii) NETeller will maintain
procedures and controls designed to prevent its services from
being used to conduct U.S. gambling transactions; and (iii)
NETeller will monitor regularly the effectiveness of its
procedures and controls designed to prevent its services from
being used to conduct U.S. gambling transactions, and will revise
and update its procedures and controls as necessary to achieve
that purpose. In order to ensure NETeller’s compliance, the
Agreement also requires NETeller to retain a monitor for a period
of at least eighteen months. The restrictions and controls on
the company’s operations in the United States will remain in
effect and the company’s cooperation will continue after charges
against the company are dismissed.
Mr. GARCIA said that the decision to file a charge
against NETeller was based on several factors set forth in the
Department of Justice Principles of Federal Prosecutions of
-4-
Business Organizations (the “Principles”), including: (i) the
seriousness and duration of NETeller’s conduct involving the
processing of billions of dollars of gambling transactions in
violation of state and federal law, and (ii) the involvement of
senior corporate officers in the company’s criminal conduct.
The decision then to enter into the Deferred
Prosecution Agreement with NETeller, Mr. GARCIA continued, was
based on a variety of factors and considerations also set out in
the Principles, including: (i) the company’s frank acknowledgment
of its misconduct and its willingness to cooperate with the
investigation; and (ii) the company’s remedial actions, including
cessation of its participation in illegal gambling transactions
involving persons located in the United States; implementation of
procedures and controls to prevent its services from being used
to conduct U.S. gambling transactions; retention of a monitor to
ensure compliance with those procedures and controls; and
disgorgement of $136,000,000 in criminal proceeds.
Mr. GARCIA stated, “NETeller moved billions of dollars
offshore, serving as a financial conduit that enabled Internet
gambling businesses to prosper by violating United States laws.
Supporting illegal gambling is not a business risk, it is a
crime, and today’s proceedings mark yet another example of the
consequences of engaging in that conduct.”
Mr. GARCIA praised the tremendous investigative work of
the Federal Bureau of Investigation in this case.
Assistant United States Attorneys TIMOTHY J. TREANOR,
CHRISTOPHER P. CONNIFF, and SHARON COHEN LEVIN are in charge of
the prosecution.
07-186 ###

This press release was recently issued by our “friends” at Neteller. Sounds like they are simply stalling for more time at this point:

“Further information will be communicated to NETELLER’s US customers via email, through our website and through a press release once the date for implementation of the plan is finalised.”.

On a related note, be sure to check out the Neteller Customer Coalition’s new website and forum at www.netellercustomercoalition.com.

Friday, 13 July 2007 – NETELLER Plc (LSE: NLR), the independent global online payments business, today issued the following statement regarding its progress in resolving the investigation by the United States Attorney’s Office for the Southern District of New York (USAO) into the Company.

As stated in the Company’s announcement of 12 July 2007, NETELLER stated that it had advised the USAO that it will use its best efforts to resolve the investigation on or soon after 13 July 2007. The Company believes that it is making significant progress towards achieving a resolution and hopes to be able to announce this within a number of days.
As announced on 4 June 2007, the Company has agreed to a plan for the distribution of funds to its US customers and anticipates implementing the plan upon the resolution of the investigation. The agreed distribution plan details the process and mechanisms by which US customers will be able to initiate the return of their funds after the plan is implemented. Further information will be communicated to NETELLER’s US customers via email, through our website and through a press release once the date for implementation of the plan is finalised.

The Company continues to make progress regarding the ongoing suspension of the Company’s ordinary shares from trading. The restoration of trading in the Company’s ordinary shares will depend on resolution of the investigation within a short time frame and finalisation and publication of the Company’s audited annual accounts for 2006. Further information will be announced as and when it becomes available.

The Company also today confirms that earlier today, the Board accepted the resignation of Gord Herman as Executive Chairman and Director of the Company. Mr Herman has indicated that he wishes to concentrate on personal matters. Dale Johnson, non-executive director, will assume the role of non-executive Chairman. Both of these changes will take place with immediate effect.

About the NETELLER Group Trusted by millions of consumers in over 160 countries to move and manage billions of dollars each year, the NETELLER Group operates the world’s leading independent online payment business. The Group specializes in providing innovative and instant payment services where money transfer is difficult or risky due to identity, trust, currency exchange, or distance. Being independent has allowed the Group to support thousands of retailers and merchants in many geographies and across multiple industries.

The Group is quoted on the London Stock Exchange’s AIM market, with a ticker symbol of NLR. NETELLER (UK) Limited is authorised by the Financial Services Authority (FSA) to operate as a regulated e-money issuer. For more information about the Group visit www.netellergroup.com.
Media and Investor Contacts NETELLER Group media and investor relations are managed by Citigate Dewe Rogerson. Contact them through the Media Relations Contact page

Just saw this encouraging post on the Neteller Customer Coalition mailing list:

I just got off the phone. I was unable to get my account reopened but
they did give me the balance. They are now confirming they have all our
cash. I was told they are just awaiting for the US Attorneys office
approval before dispersing funds. I was told things are moving along
and the July 13 date still looks good. It was a better conversation
than I have had with them in months. They were more forthcoming with
info and seemed somewhat optimistic. I had the feeling the customer
service people knew what was going on, compare that to when every
answer was “visit our website for updates”. I am more optimistic than I
have been.

John

Glad to hear that the customer service reps are still answering the phones and that all the money is supposedly still in Neteller’s hands. Let’s hope this saga is coming to an end finally.

Here is the announcement in full:

Monday, 4 June 2007 – The NETELLER Plc Group (LSE: NLR), the
independent global online payments business, today announced that it
has agreed to a plan for the distribution of funds to its US
customers.

NETELLER is continuing to cooperate with the investigation being
conducted by the United States Attorney’s Office for the Southern
District of New York (“USAO”), under the advice of its legal advisers
and in accordance with court orders in the Isle of Man. The Company
is in discussions with the USAO for the purpose of resolving the
investigation. The Company has advised the USAO that it will use its
best efforts to resolve the investigation no later than 13 July 2007.

On 21 March 2007, the Company announced that it signed agreements
with the USAO and Navigant Consulting, Inc. (“Navigant”) with respect
to, among other things, developing a plan for the distribution of
funds to US customers. Since then, in accordance with the agreements,
the Company has worked with the USAO and Navigant to develop the
plan. The Distribution Plan is now agreed upon, and the Company
anticipates implementing the plan upon the resolution of the
investigation.

The agreed Distribution Plan details the process and mechanisms for
the return of funds to US customers. US customers will be able to
access their NETELLER accounts online for a certain time and make a
request for their funds. In accordance with NETELLER’s Terms of Use,
no interest on account balances will be paid. NETELLER will not
charge fees to customers to process requests for funds. Funds will be
distributed either by electronic transfer to the bank account on
record with NETELLER or by a cheque to be sent to a mailing address
as confirmed by the customer. If a US customer has a bank account
already registered with NETELLER, funds transfer will be by
electronic transfer subject to confirmation by the customer that the
registered bank account remains valid. US customers will receive the
entire balance of funds in their account; no requests for partial
payments will be processed. US customers cannot use their accounts
for any transaction other than to request the funds.

Further information will be communicated to NETELLER’s US customers
via email, through our website and through a press release once the
date for implementation of the Distribution Plan is finalised.

Ron Martin, Group President and CEO said: “The agreement on the
Distribution Plan represents a milestone in our cooperation with the
US authorities. While we are disappointed not to have been able to
return funds to our US customers at this point, we believe that the
steps we have made in our discussions are significant and we hope to
be able to announce further progress with the USAO by 13 July 2007.”

The Company continues to work with Navigant to produce a report to
the USAO on the Company’s current financial condition. On 8 February
2007, the Company informed the market that approximately million had
been seized by the USAO or otherwise restricted by third parties.
After ongoing consultation with the USAO, the Company currently
believes this amount could be up to approximately million.

The Company’s shares continue to be suspended from trading on AIM in
view of the continuing uncertainties the Company faces although the
Company is making progress towards achieving restoration of trading.
The Company is also working towards the finalisation of its audited
annual results for the year ended 31 December 2006 and will announce
the date on which these will be published to the market in due
course. NETELLER customers not resident in the US continue to be
minimally affected by the withdrawal from the US market.

The Neteller saga continues. Now the hearing to determine if two NETeller co-founders will be indicted has been postponed for yet another two weeks.

A hearing had been scheduled for May 16th, but is now moved back to the first week in June according to MajorWager.com. This would represent the fifth postponement of the hearing.

Gambling911.com first broke the story in mid January that Stephen Lawrence and philanthropist John Lefebvre, both former directors of the Isle of Man-based third party payment solution, were arrested; Lefebvre in Malibu, California, and Lawrence in the US Virgin Islands. Both men were held on $5 million in U.S. bonds and later released but are not permitted to travel outside the United States.

The two were charged with racketeering and money laundering.

Since this time, NETeller representatives and the US Department of Justice have claimed that monies owed to US customers has been seized.

Two weeks off just happens to coincide with the release of the alleged “75 Day Plan”.The general sentiment is that there should have a concrete answer by then. Either, Yea or Nay; on the returns of the money and when it will occur.

Meanwhile, I’ve heard that Ecocard is taking deposits from U.S. gamblers and letting them fund their sports betting accounts with the funds. Needless to say – proceed with caution!

More developments yesterday from the Neteller reality show:

“The Board of Directors of the Company reached a decision, on 25 March 2007, that the risk to the Group’s ongoing business in Canada and Turkey has increased in the light of such developments. The Board has therefore concluded that the Group will no longer process transfers related to online gambling sites on behalf of Canada or Turkey resident customers.”

Sorry if I caused any confusion with my last post – Neteller will be releasing a PLAN to return the funds in 75 days, not actually releasing the funds. They seem to be attempting to clear up any confusion I may have caused in there last paragraph:

“The Company would, in light of recent press comment concerning its
announcement of 21 March 2007, like to make clear that the 75 day
period referred to in that announcement was for agreement of a plan
of distribution with the United States Attorney’s Office. It would
remain to be determined, as part of that plan, the precise timing of
the distribution of funds to US customers.”

Meanwhile things are getting testy on the Yahoo Neteller Customer Coalition mailing list:

“This is not a poker email list. Many of those who have money tied up here
bet on sports or participated in other non-poker activities. A poker
exception does not serve the members of this list.”
…
“Well, many of us Do play poker and do not engage in activities that may or may not be questionable.
For us, that is our best hope, sorry if you bet on sports, I would not hold out much hope though…….”

Isn’t this fun?

Neteller Press Release

NETELLER released a statement yesterday declaring that a deal with the U.S. Attorney General’s office had been made that will allow the money to be returned, and that a plan will be revealed within 75 days.

It’s a relief to finally here something positive coming from Neteller. The previous silence was starting to be disheartening.

On an unrelated note, I started a new website I think a lot of you will appreciate. The site is called FIGHTER.PRO and it’s a social network (ala Myspace) for Mixed Martial Arts fans and professional fighters to interact. There are already a few fighters signed up and tons of videos, photos and other good stuff loaded on the site. If you like this blog, please take a second to go over and check it out!

My new favorite blog Neteller Watch reports that Congressman Barney Frank could be working on a bill that would repeal the Unlawful Internet Gambling Enforcement Act and also that charges may be dropped against the recently arrested Neteller directors.

I grew up in Barney’s district and I’m glad to see him taking action on this issue. He’s a smart guy with a lot of years in Congress and I wouldn’t be suprised to see him pull this off. If you happen to live in the 4th Congressional district in Massachusetts and support what he’s doing here, why not take a minute to let him know how you feel?