Saturday, January 20, 2007

Two founders of a company that processes Internet gambling transactions were
arrested and charged with funneling billions of dollars in gambling proceeds
to overseas betting operations, federal prosecutors announced Tuesday. The
charges mark the latest in a series of crackdowns by the federal government
against the online gambling industry. The charges against the former
Neteller PLC directors, John David Lefebvre, 55, and Stephen Eric Lawrence,
46, both Canadian citizens, were contained in two criminal complaints
unsealed in U.S. District Court in Manhattan on Monday, U.S. Atty. Michael
Garcia said. The prosecutor said the men knew when they took their company
public that its activities were illegal. FBI Assistant Director Mark Mershon
said the multibillion-dollar online gambling industry is "a colossal
criminal enterprise masquerading as legitimate business." Neteller is an
Internet payment services company that has grown in popularity as more
credit card companies have begun refusing to accept payments to online
gambling sites. Neteller acts as a middleman between gamblers and offshore
betting operations. A gambler who wants to place bets at offshore sports
books can fund an account with Neteller, which transfers the money to the
sites. Lefebvre was arrested Monday in Malibu, Calif., and was scheduled to
appear in U.S. District Court in Los Angeles on Tuesday. Lawrence was
arrested Monday in the U.S. Virgin Islands and will appear in federal court
on Wednesday. Peter Neiman, a lawyer for Lawrence, said he had no comment. A
lawyer for Lefebvre did not immediately return a phone message seeking
comment. Lawrence and Lefebvre were charged with conspiring to transfer
funds with the intent to promote illegal gambling, and could face up to 20
years in prison if convicted.