Neteller Founders Charged with Money Laundering Conspiracy
Today the New York U.S Attorney's Office and the Federal Bureau of Investigation issued a joint press release announcing Monday's arrests of Stephen Eric Lawrence and John David Lefebvre, founders and former executives of the online payment company Neteller.
The press release acknowledged that the arrests were "part of the US Department of Justice's effort to combat unlawful internet gambling through, among other things, the implementation of the anti-money laundering statutes."
As news of the two executives detentions spread Monday, there was speculation that the US might issue its first UIGEA related charges, even though both Lawrence and Lefebvre's company involvement terminated prior to the UIGEA's passage. The US, instead, tread on familiar legal ground. Both men were charged with a money laundering conspiracy in accordance with Section 1956 (a) (2) (A) of Title 18 of the United States Code which specifically addresses anyone who "transports, transmits, or transfers, or attempts to transport, transmit, or transfer a monetary instrument or funds from a place in the United States to or through a place outside the United States or to a place in the United States from or through a place outside the United States with the intent to promote the carrying on of specified unlawful activity." While the press release and supporting complaints painted a broad brush, implying that the vast majority of online gaming was illegal, as predicted earlier today. The complaints narrowly defined the federally unlawful activity as violations of the 1963 Wire Act.
The press releases and complaints chronicled the history of the defendants' involvement in facilitating transactions for the online gaming sector and made reference to the billions of dollars of online gaming related revenue that Neteller transacted. While public opinion may be affected by the total magnitude of online gaming funding, the prosecution will use a subset of that number in its case against the defendants; those transactions related to online offshore sports books. The crux of the government's case rests on a cooperating witness' use of Neteller's service to transfer funds from the US, enabling the witness to place of bets with online offshore sports books and transfer money between online sports book enterprises.
To date, charges have not been brought against Neteller, although the United States Attorney for the Southern District of New York, Michael J. Garcia stated that the investigation is still ongoing. The smart money believes the company will not go unfettered. Whether Neteller will offer up a voluntary suspension of their US online gaming related operations or whether they will be on the receiving end of an indictment may be determined within the next few weeks. Whatever the outcome, there is little doubt that the online gaming funding options for US citizens will be changing sooner rather than later; which undoubtedly was the Department of Justice's intent.