SECOND NETELLER FOUNDER FOLDS

13 July 2007

Now John Lefevbre pleads guilty, too

The best thing that can be said for current developments in the Neteller issue is that this long drawn out and sorry saga may at last be approaching finality. In a Manhattan courtroom this week, Neteller co-founder John Lefebvre (55) followed the earlier example of fellow founder Stephen Lawrence and pleaded guilty to a U.S. federal conspiracy charge.

Lefebvre pleaded guilty to a wide-ranging conspiracy charge that included transmitting interstate and foreign bets, promoting gambling offences and operating an unlicensed money transmitting business between 1999 and 2007.

Both men, who are Canadians, were arrested in January of this year whilst on US soil, leading to the withdrawal from the American market of the Isle of Man-based e-wallet they founded, inconveniencing tens of thousands of US Players by freezing their accounts. The two men were subsequently released on massive $5 million bail each and a series of court continuances followed, negating any possibility of a full court hearing.

Such a judicial test of US Department of Justice allegations seems unlikely now as the men await sentencing.

In a plea deal that mirrors that of his fellow founder, Lefebvre agreed before U.S. District Judge P. Kevin Castel to co-operate with prosecutors and testify if necessary. He also agreed to be partly responsible for the US$100 million the government is seeking in restitution.

Although the conspiracy charge carries a potential prison term of up to five years, co-operation in the case is likely to greatly reduce any potential sentence.

The government has said that nearly all of the $5.1 billion in transactions processed through Neteller in the first half of 2006 involved online gambling - and most of the revenue was generated by U.S. customers.

Lefebvre said he agreed in 1999 to help create a set of companies that became Neteller.

Although the companies were originally created to enable the transfer of money online, the majority of the business eventually focused on Internet gambling transactions, he said. By March 1, 2004, the company had nearly 170 employees, 600 000 member accounts and 1 000 merchants registered.

He said he later "came to see that providing online services for gambling customers in the United States was wrong." Neteller co-founder Stephen Lawrence previously pleaded guilty to criminal conspiracy, saying the almost identical words.

Lefebvre and Lawrence are no longer on the company's board of directors.

Co-defendant Stephen Lawrence, who entered a guilty plea on 29 June, and Lefebvre will be sentenced on October 29, 2007 by United States District Judge P.Kevin Castel.

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