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NETeller to Pay $136m Penalty in Gambling Case
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19-Jul-2007, 07:25
The British payments processor Neteller will forfeit $136 million but will not be prosecuted for conspiracy under a deferred-prosecution agreement with the United States government announced yesterday. The agreement is the latest development in a United States crackdown on Internet gambling.
Under the deal, approved by Judge P. Kevin Castel of Federal District Court in Manhattan, Neteller will also pay back $94 million owed to customers. The company pleaded not guilty to a conspiracy charge related to its handling of gambling proceeds. The charge will be dismissed after two years if the company meets the conditions of its agreement with the United States attorney’s office in Manhattan.
“The company is happy to put this behind us,” a Neteller lawyer said after the hearing.
Neteller halted operations in the United States in January, abandoning two-thirds of its business after authorities arrested its Canadian founders and charged them with handling billions of dollars in illegal gambling proceeds. The co-founders, John D. Lefebvre and Stephen Lawrence, have already pleaded guilty in the case.
The legality of Internet gambling was ambiguous in the United States for many years, but it was effectively banned last October when President Bush signed legislation outlawing gambling financial transactions.