ECHO AND FEDS CONFIRM NO CHARGES (Update)

30 March 2007

$2.3 million settlement clears the slate for Electronic Clearing House

The Electronic Clearing House story carried by InfoPowa yesterday had a brief sequel as both company officials and the United States Attorney for the Southern District of New York confirmed that the company's willingness to surrender its profits and cooperate with the authorities had saved it from any prosecution regarding its involvement as an e-cash processor in online gambling.

In signing a non-prosecution agreement, Electronic Clearing House Inc. (ECHO) agreed to pay $2.3-million and fully cooperate with the government's continuing investigation into "illegal" Internet gambling. ECHO chairman Joel Barry said the $2.3-million represents company profits since 2001 from processing and collection services provided to companies, known as e-wallets, that in turn provided financial transactions for Internet gaming - process made illegal by the 2006 Unlawful Internet Gambling Enforcement Act.

On Wednesday, United States Attorney for the Southern District of New York Michael Garcia said ECHO would not face prosecution because it started to wind down its e-wallet processing in October and has frozen $21-million belonging to e-wallet companies.

At least some of these frozen funds will be the property of US gamblers who used the Neteller e-wallet; the biggest such company handled by ECHO was Neteller, which in January halted services to United States customers following the US arrest of two of its founders.

Barry said the Camarillo, California, company would not face further prosecution.

"It's important to know that the government has assured us it will not pursue further prosecution," Barry said. "We want to get on with our business."

ECHO was involved in the transfer of money on behalf of online payment services known as "e-wallets," which mostly handled illegal transactions with online gambling Web sites, the U.S. Attorney's Office in Manhattan said.

The company has been cooperating with prosecutors since January and has agreed to disgorge $2.3 million, representing the net proceeds from the services it provided to e-wallets since 2001, the government said. A criminal prosecution of ECH "would not serve the public interest," the U.S. Attorney's Office said.

Online Casino News courtesy of InfoPowa

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