Neteller Blocks All US Customers Effectively Immediately

Now they are blocking P2P transfers which were helping people get their money out of Neteller 😡

Net-betting crackdown freezes funds

Net-betting crackdown freezes funds
Updated 2/1/2007 10:12 PM ET
By Jon Swartz, USA TODAY

SAN FRANCISCO — The federal crackdown on online gambling has tied up the funds of thousands of U.S. patrons of two of the largest services.

The crackdown on BetOnSports, which no longer takes sports wagers from the USA, and Neteller — an Internet payment service popular among gamblers — is intended to put a dent in the $10.6 billion industry.

And it has: Following federal charges against executives from both companies, dozens of the more than 2,300 websites that service online gambling have stopped taking U.S. wagers.

Still, the actions against BetOnSports and Neteller have left the online accounts of their U.S. customers frozen until legal issues are resolved.

"The truth is that the money is in limbo and the companies are not required to refund any money until a successful prosecution or settlement takes place," says Michael Tew, principal of gaming consultant CapitalHQ. "This could take years." Funds from other gambling sites are not tied up, Tew and others say.

Most U.S. customers of BetOnSports have been waiting to cash out money in their accounts since July, when a federal grand jury issued a 22-count indictment charging CEO David Carruthers with racketeering, conspiracy and fraud. BetOnSports handled $1.77 billion in bets during its 2005 fiscal year, with more than 90% of wagers from the USA. An attorney representing the company declined to comment.

Neteller founders Stephen Lawrence and John Lefebvre were arrested in January on a charge of conspiracy to transfer funds with the intent to promote illegal gambling.

Though money-transfer companies such as Neteller do business with financial institutions and merchants, many also allow gambling companies to transfer money collected from U.S. gamblers to bank accounts outside the USA. Neteller last month closed its U.S. Internet gambling services, erasing about two-thirds of its business.

Neteller offers few instructions for customers trying to cash out their accounts. "We are working to resolve all withdrawal issues, but in the meantime we continue to maintain these funds in trust on your behalf," says a posting on the company's website.

Neteller declined to comment. The company processed more than $7 billion in online gambling transactions in its 2005 fiscal year. FBI Agent Neil Donovan says funds from Neteller are being held in court as potential evidence. Some customers may get their money back, but he did not provide a timetable.

A law signed by President Bush in October bans the use of credit cards, checks and electronic fund transfers for Internet gaming. U.S. residents place more than half of all bets to major offshore casinos.

BetOnSports has settled civil charges with the Justice Department, but not criminal charges. Carruthers' case is separate.

www.usatoday.com

I am beginning to think we are never gonna see the loot for BOS or Neteller. Sad thing is BOS was no safer as a public book than any private book out there. So much for the UK.

I am thinking about contacting the Isle of Man about my Neteller loot

I am beginning to think we are never gonna see the loot for BOS or Neteller.

BOS money is long gone I think and Neteller is starting to look the same IMOP 😡

I am beginning to think we are never gonna see the loot for BOS or Neteller. Sad thing is BOS was no safer as a public book than any private book out there. So much for the UK.

I am thinking about contacting the Isle of Man about my Neteller loot

Betonsports Cited for Contempt in U.S. Gambling Case
By Andrew Harris and Benjamin Israel

Feb. 2 (Bloomberg) -- Betonsports Plc, the British Internet sports book indicted in the U.S. on charges of racketeering and violating interstate gambling laws, was found in contempt of court for failing to answer those charges.

U.S. District Judge Carol Jackson today in St. Louis found the company in contempt for violating a Dec. 28 order to appear in court. Prosecutors asked her to impose daily fines on the company's officers until a representative comes forth.

Betonsports' St. Louis counsel Jeffrey Demerath called the judge's chambers yesterday and ``told us he had been instructed by his client not to appear,'' Jackson said. ``I clearly believe Betonsports' actions are contumacious and disregard the court's order without any excuse.''

The London-based company was indicted last summer, together with its founder Gary Kaplan, then-Chief Executive Officer David Carruthers and nine other individual defendants. Prosecutors are seeking the forfeiture of $4.5 billion.

Reached by phone in his office this morning, Demerath, a partner at Armstrong Teasdale, said he hadn't seen a contempt order from the court and couldn't comment on today's proceedings.

Carruthers and six other defendants appeared in court on July 31 and entered not guilty pleas. Kaplan and two other defendants are still at large.

A not guilty plea was entered by the court on the company's behalf on Jan. 11. Ginny Pulbrook, a London-based spokeswoman for the company, did not return an after-hours phone message seeking comment on today's contempt citation.

Banned

In November, Demerath was one of two corporate attorneys who signed a civil consent agreement with federal prosecutors paving the way for Jackson to issue an order permanently banning Betonsports from doing business in the U.S.

On the eve of the company's scheduled arraignment on the criminal charges last month, Demerath also told the court his clients had instructed him not to answer the charges.

Betonsports' decision ``suggests that corporate management is neither in a coma nor dead but, instead, contemptuous and defiant,'' Assistant U.S. Attorney Michael Fagan said in court papers asking Jackson to make the contempt finding.

``The defendant is the company,'' former Assistant U.S. Attorney James Montana said in a telephone interview from his office in Chicago. ``It would be appropriate for the company to be fined,'' he said.

I think it's time to stick a fork in BOS 🙁

Sorry MC

These subpoenas and arrests are sheer hypocrisy

The US crackdown on online gaming may not be so much about morals as hard cash, Mark Choueke discovers. The Americans, suggest the cynics, want to drive foreigners out to establish their own Vegas gambling brands

The long arm of the American legal machine reached further into the British business establishment last week.

News that the US Department of Justice (DoJ) is pursuing London-based banks for information relating to online gambling companies has sparked fears that an American campaign to shut down these sites will lead to further arrests and charges.

advertisementThe still-smouldering issue of Britain's legal relationship with the US was further reignited last week when Ian Norris, one of several British businessmen targeted for alleged price-fixing, lost a vital appeal in the High Court. Taken together, the two cases could make the recent furore over the NatWest Three look like just the start (see box).

"There is an enormous row brewing over extradition," says Alun Jones QC, one of Britain's top extradition lawyers. "It's only a matter of time before some of the online gaming executives become caught up in extradition requests, and that will bring the issue back into focus."

A number of gambling executives are already staring down the barrel of the US legal system after being arrested while travelling there. David Carruthers, the chief executive of -BetonSports, is awaiting trial in St Louis, Missouri and faces 20 years' imprisonment for allegedly flouting US rules that outlaw online gambling. Similarly, John Lefebvre and Stephen Lawrence, the founders of Neteller, were arrested in Los Angeles last Monday and stripped of their passports; they face charges of laundering billions of dollars in "illegal" online gaming proceeds.

Given this backdrop, it is no wonder the banks subpoenaed by the DoJ are trying to keep their heads down. "We're co-operating fully," said one London banker last week. "We don't have any legal right to withhold information from the US authorities."

The hope is that the authorities are just trawling for information, not looking to widen the net. "The Americans are going after the gaming companies, not the banks," says another banker. "The only request they made of us was to hand over any contact we had with the gaming outfits." But lawyers with experience of such investigations warn against complacency.

Jason Chess, a partner at Wiggin, the London law firm, and a gaming law specialist, says: "Nobody should be blasé about what the Americans are doing. They're acting very aggressively, and if you're an executive of an internet gaming company operating just about anywhere from Alderney to the Isle of Man, the message is, don't go anywhere near the US."

Chess describes the DoJ's actions as "nothing more than economic and imperialist bullying" and says the two-faced approach of the American authorities towards gambling shows there is a need to stand up to the DoJ. "There are US politicians preaching that gambling is a destroyer of families while a quarter of the population spends its vacations putting coins in slot machines in Vegas casinos," he says. "For me this is more about driving foreign traders out of action so Nevada and Vegas don't lose out on business in the future. The moves being made now give the US time to sort out the legalisation of online gaming and give the Vegas brands time to establish their own brands online."

Warwick Bartlett of Global Betting & Gaming Consultants agrees. "The Americans want to bring these gaming company executives to what they refer to as 'justice', which means slamming them in jail, pocketing their proceeds from the business and claiming the market as their own. Our view is that the US will legalise online gaming within five years. These subpoenas and the arrests represent sheer hypocrisy."

The DoJ refuses to comment on the ongoing activity and won't even state the name of the specific crime it is investigating. But the American Gaming Association confirms that the legal status of online gaming in the US could change in the future. Helen Thomsen of the association says: "The AGA supports a study of online gambling in the US being congressionally funded. Such a study would look into how online gambling could be properly regulated and controlled. We are pursuing the matter with the new Senate and hopefully a study could begin in the next few months. We can't be sure of how the recent change of power in the Senate will affect the future status of online gambling but it's interesting that the majority leader is Harry Reid, who is from Nevada, one of the larger gambling centres."

So online gaming executives are being hunted all over the globe in a manner more befitting terrorists, dragged off to American shores and forced to fight for their freedom because their successful businesses – perfectly legal in the country they operate in – are being or have been illegally used by American citizens.

But the apparent double standards are not restricted to the US. The British Government, about to announce plans for new super-casinos over here, had previously backed the development of the online gaming industry in the UK but has so far had little to say about the fates of Carruthers, Lefebvre or Lawrence.

Bartlett says: "The Government should have come out with a clear, unequivocal statement by now. It wanted to draw online gaming operators away from the likes of Gibraltar and into the UK, where a global gambling hub could be created. Not only would such a drift mean the industry could be properly regulated but the Treasury would also benefit from extra jobs and revenue. Where is the Government's support now things are getting a little bit hairy?"

The Treasury declined to comment but a spokeswoman for the Department for Culture, Media & Sport said that "protection of the vulnerable and strong industry regulation", rather than revenue and tax, are at the heart of the Gambling Act, which will come into effect in September.

Fearful of future extradition and constantly looking over their shoulders, Britain's online companies have gone unusually quiet, but privately there is mounting frustration over what they see as double standards.

"There is a poker and gaming website in the United States run by a Texan, who moves freely around the US, as does the famous actress who stars in his TV commercials and only recently closed her own online gaming company that had customers in America," says one British gaming executive. "Why don't the US authorities arrest the pair of them?"

Others feel more confident about running gaming websites within the US and seem prepared to test the DoJ's resolve. Lee Jones of PokerStars.com, based in the Isle of Man, told The Sunday Telegraph: "We are still offering our services to poker players in the US and have got expert legal advice both within and outside PokerStars and believe we are operating a legal service. Beyond that we are not able to give you any comment."

However, last Wednesday the PokerStars management posted a message to its US customers on "2+2", a popular poker forum on the web. It reads: "Despite recent matters our position remains the same; PokerStars continues to offer its services to US players. You may play on our site as you did prior to the recent developments. This new legislation is not aimed at players and does not change the legality of playing online poker."

How long such businesses, and indeed those operators who have reluctantly closed down their websites to the US, can hold out before the DoJ comes knocking is anyone's guess. After all, as one source says: "The DoJ is going after those who have closed in America with charges of illegal online gambling before the Bush administration clarified the situation with a bill in October.

"It would not be going to all this trouble if it wasn't hell-bent on getting some results, which means there will be more scalps."

www.telegraph.co.uk

I am beginning to think we are never gonna see the loot for BOS or Neteller. Sad thing is BOS was no safer as a public book than any private book out there. So much for the UK.

I am thinking about contacting the Isle of Man about my Neteller loot

BetOnSports fined $5,000 a day
By Robert Patrick
ST. LOUIS POST-DISPATCH
02/05/2007

A federal judge in St. Louis today ordered the international online betting company BetOnSports and its executives to pay a fine of $5,000 per day for ignoring pending criminal charges.

Until federal prosecutors in St. Louis and Washington filed civil and criminal charges against the company last summer, London-based BetOnSports PLC was taking in more than $1 billion in U.S. bets. The company shut down its operations in the U.S. as part of a civil settlement, but hasn't refunded the money still in customer accounts or provided all the documents prosecutors have demanded.

And they have also skipped court hearings in a pending criminal case.

Lawyer Jeffrey Demerath didn't show for a hearing on Friday that was called so the company could explain why it shouldn't be penalized for ignoring the criminal case. U.S. District Judge Carol E. Jackson said she'd talked to him the day before and he wouldn't say why the company told him not to show up.

Today, Jackson said BetOnSports, “without just cause or excuse,” disobeyed and “deliberately ignored” court orders. Jackson found the company was in contempt of court and ordered the company and its officers and directors to pay $5,000 per day starting Feb. 2, the date of the hearing.

"It's a very serious matter and I will be conferring with the client shortly,” Demerath said by telephone this afternoon.

NETELLER Works to Return Funds to US Customers After US Withdrawal

8 February 2007 - NETELLER Plc (LSE: NLR), the leading global independent online money transfer business, today issued the following update with regard to its US business and criminal charges against two of its founders.

On 19 January 2007, at the request of the Group, the Group’s legal advisers met with representatives of the United States Attorney’s Office for the Southern District of New York (“USAO”) to clarify the Group’s position with respect to the complaints brought on 16 January 2007 against two of the Group’s founders, Mr. Stephen Lawrence and Mr. John Lefebvre. Neither are current employees or directors of NETELLER. In that meeting, the Group pledged to cooperate with the USAO, indicated it was prepared to begin document production promptly and discussed a potential mechanism for arranging an orderly repayment of funds to US customers.

The discussions between the Group’s legal advisers and the USAO are ongoing. The Group is, under advice of its legal advisers, commencing production of documents and intends to cooperate with the USAO in its investigation.

Following upon the complaints dated 16 January 2007, banks in the US began declining to permit transactions involving the Group through accounts maintained at one or more automated clearinghouses in the United States. Additionally, the Group has been advised that the USAO has obtained court-ordered seizure warrants seizing funds pertaining to the Group’s transactions. To the best of the Group’s knowledge, it believes that the amount of funds seized by the USAO or otherwise restricted by third parties does not exceed US$ 55 million. These funds were largely in the process of being transferred from the Group to its US customers or vice versa.

As a result of the restrictions placed by third parties, court-ordered seizures, and related legal concerns, the Group is currently unable to make payments to US customers. Nevertheless, the Group is in discussions with the USAO to manage an orderly return of funds to US customers. As part of these discussions, it is contemplated that the USAO will engage a forensic accounting firm, at the Group’s expense, to assist in this process and to examine the Group’s financial position. “The return of funds to our US customers is a top priority for NETELLER” said Ron Martin, Group President and CEO. US customers wishing to withdraw funds from their NETELLER e-wallet accounts will experience ongoing delays while these discussions continue, and a further update will be provided by the Group once effective repayment mechanisms are determined.

To the Group’s knowledge, no criminal action or proceeding has been brought against the Group, its current officers or directors by the USAO. Nevertheless, there can be no assurance that the Group will not be charged in a criminal action at some subsequent time. The Group intends to work with the USAO to seek a negotiated resolution of any allegations relating to its US activities. Any resolution of this matter may lead to potential sanctions against the Group including material financial penalties, fines and forfeitures.

It is emphasized that in line with the Group’s standard business practices for all customers, funds held by the Group for US customers are held in segregated trust accounts. The Group’s own cash position remains strong and the Group currently has sufficient working capital to fund all its customers’ balances as well as ongoing requirements of the business.

About time they finally admitted they can't pay at this time 😡

I was reading a article and came across something very intresting.

CAN THE U.S. DEPARTMENT OF JUSTICE FREEZE PLAYER PAYMENTS FROM A BRITISH COMPANY?

Debate swirls around latest newspaper reports of FBI offshore activities against NETeller

The Guardian newspaper in the United Kingdom started a round of speculation this week by reporting that the FBI has frozen accounts held by U.S. customers at the Isle of Man registered e-wallet NETeller. The company had already stopped allowing U.S. customers to make transactions with online gambling companies, and now the accounts are apparently frozen as evidence.

The frozen accounts are part of the U.S. Department of Justice's allegations against NETeller's two founders, Stephen Lawrence and John Lefebvre.

The two men were arrested last month and charged with conspiring to transfer funds with the intent to promote illegal gambling.

Not long after the arrests, NETeller announced that it would no longer allow U.S. customers to use their accounts for online gambling. At the time, customers still had access to their funds.

Initially NETeller had announced to the stock exchange that "the funds of U.S. resident customers are held in segregated trust accounts and are fully secure and will be available for withdrawal by customers on demand."

Now the web site for the company is advising customers that all withdrawals have been blocked and the funds are being maintained in trust on the customers' behalf while NETeller works to resolve the issues.

NETeller has not disclosed how much money has been frozen and has refused to disclose or confirm any details of the freeze, as has a spokesperson from the Department of Justice.

In an interesting sidebar to the NETeller story, industry analysts have pointed out that while Lawrence and Lefebvre prepare for trial, a competitor to NETeller has a parent publicly listed in the United States and goes untouched.

NETeller shares remain suspended in the UK, but Optimal Group Inc. still trades in the States on the NASDAQ exchange. Optimal is the full owner of the FireOne (FirePay) e-wallet business which was a pure competitor to NETeller, and therefore likewise a part of what the US government is calling a "massive criminal enterprise".

The double standard of NETeller founders being charged with crimes that allegedly occurred before the passing of the UIGEA, whilst the similar operations of companies like Firepay are apparently ignored has not gone unnoticed. One industry analyst observed: "FirePay was processing the same transactions then, including those for sports gaming sites. It's parent trades in the US and they appear to have had US operations. You have to ask yourself: 'Is the US about to come down on these guys just like NETeller? Or is NETeller being singled out for special treatment?"

???

www.online-casinos.com

NETELLER INTEREST

With millions in 'cold storage' who gets the interest?

US players deprived of their Kneeler balances by the wrangle between the Isle of Man e-wallet and US government officials were this week asking the very valid question: "If our frozen funds are being safely held in a Kneeler trust account what interest is accruing on the money and will we be getting it?"

It's a legitimate concern with some $55 million reportedly involved....but it's one on which there was no information when InfoPowa tried to get a direct answer to the simple question, and a parallel enquiry of whether Kneeler solely controlled the trust account or are independent trustees involved in its administration.

A Kneeler spokeswomen first suggested an off-the-record call, which InfoPowa declined on the grounds that we were looking for an email documented public answer to a legitimate client question.

The spokeswoman's response to this was: "On the record, there is nothing to say over and beyond the formal announcements we've made."

As we commented to the spokeswoman, this is a pretty callous attitude to display toward clients who are legitimately concerned about what is happening to their money in NETeller's care.

There was no response.

www.online-casinos.com

As we commented to the spokeswoman, this is a pretty callous attitude to display toward clients who are legitimately concerned about what is happening to their money in NETeller's care.

There was no response.

What else is new with this group 😡

Looks like someone should proof read their proof reading. Kneeler is what Word/Outlook wants to change Neteller too during spell check. DOH