Neteller Settles with USAO, Agrees to Pay $136 Million

Neteller, the London-listed payments processor, has entered into a deferred prosecution agreement (DPA) with the United States Attorney's Office for the Southern District of New York (USAO), which, the company says, represents the resolution of the USAO's investigation.

According to a prepared statement released this afternoon, Neteller said it will not be prosecuted for any federal crimes, so long as it fulfills certain obligations set out by the DPA within a two-year timeframe.

The terms of the DPA, approved by U.S. District Judge P. Kevin Castel in Manhattan, stipulate that Neteller disgorge an estimated $136 million to the United States. The sum includes the estimated $60 million seized in January by the USAO as part of its investigation into the company.

Neteller said it has agreed to shell out the remaining $76 million by Jan. 18, 2008.

The company also said it expects to begin fielding withdrawal requests from U.S. customers by July 30, though said that the precise date would be communicated to customers directly, via e-mail, and on its Web site.

"This agreement resolves the USAO's investigation relating to the company's former U.S. business activities," said Neteller chief executive Ron Martin. "We believe that this settlement is in the best interest of Neteller and its shareholders."

"The company is happy to put this behind us," a Neteller lawyer told Reuters after the hearing.

Neteller also addressed questions regarding trading in its shares--suspended since Jan. 16, 2007--on the LSE.

"With today’s announcement of a resolution of the USAO investigation, the company is now focused on finalizing and publishing its audited annual accounts for 2006," it said. "The company will endeavor to post the 2006 accounts to its shareholders as soon as practicable following which the company anticipates that trading in [its] ordinary shares on AIM will be restored."

Neteller terminated its U.S.-facing operations in January, abandoning roughly two-thirds of its business after authorities arrested co-founders Stephen Lawrence and John Lefebvre. The two have recently pleaded guilty to charges of conspiracy in connection with processing illegal online gambling transactions from U.S. citizens.

Click here to view a copy of the statement from Neteller.