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Emily D. Swoboda

Neteller's Lawrence Pleads Guilty

2 July 2007

Neteller founder Stephen Lawrence on Friday pleaded guilty to charges of criminal conspiracy to promote illegal gambling by providing online gambling payment services to citizens of the United States.

Lawrence and co-founder John Lefebvre were arrested in January and charged with conspiracy and money laundering in connection with illegal gambling.

Lawrence pleaded guilty to one count of conspiracy to use the wires to transmit in interstate and foreign commerce bets and wagering information; to conduct illegal gambling businesses; to engage in international financial transactions for the purpose of promoting illegal gambling; and to operate an unlicensed money transmitting business, According to a prepared statement from the office of U.S. Attorney Michael Garcia.

Lawrence, who resigned as non-executive director of Neteller on Oct. 13, 2006, admitted that during the time he was running Neteller, he came to learn that laws existed in the United States barring the transfer of money for the purposes of promoting gambling, which led him to understand that what he was doing was wrong, Garcia's office said.

Neteller acknowledged in a federal courtroom in June that the operation was illegal. The company, once a primary payment provider for U.S. online gamblers, on Jan. 16 withdrew from the U.S. market, wiping out more than 65 percent of its business. The company cited the impending regulations for the Unlawful Internet Gambling Enforcement Act (UIGEA) as the primary reason for the withdrawal, but the announcement came three days after the arrests of Lawrence and Lefebvre.

Lawrence, who is scheduled for sentencing on Oct. 29, faces a maximum sentence of five years in prison and a fine of $250 million, according to Garcia's office.

Furthermore, Lawrence admitted to committing money laundering and unlicensed money transmitting offenses requiring him to forfeit at least $100 million in property and assets related to the gambling offenses.

The case against Lefebvre is still pending.

Lawrence and Lefebvre founded Isle of Man-based Neteller in 1999. The company began processing Internet gambling transactions in July 2000, allowing companies to transfer money from U.S. customers to bank accounts overseas.

After the announcement on Friday, Neteller said it is continuing to cooperate with U.S. investigators and believes Lawrence's guilty plea will not delay its efforts to resolve the investigation by July 13.

Click here to view Lawrence's plea press release.

Click here to view Lawrence information.

Neteller's Lawrence Pleads Guilty is republished from
Emily D. Swoboda
Emily D. Swoboda