UPDATE 1-Bail set in U.S. for second NETeller founder

[clevfan]

UPDATE 1-Bail set in U.S. for second NETeller founder
Fri Jan 19, 2007 8:00pm ET

By Matthew Verrinder

NEW YORK, Jan 19 (Reuters) - A U.S. judge has set bail at $5 million for one of the founders of UK payment processing company NETeller Plc (NLR.L: Quote, Profile , Research), who is accused of handling billions of dollars in illegal online gambling proceeds, the U.S. Attorney's Office in Manhattan said on Friday.

Prosecutors said that Stephen Lawrence, 46, had posted $4 million of the bail with $2.5 million cash and $1.5 million through a Manhattan apartment. Lawrence's bail was set at a hearing in the Virgin Islands earlier this week, where he was arrested on Monday, prosecutors said.

The Virgin Islands are a territory of the United States.

Lawrence and another NETeller founder, John Lefebvre, 55, were arrested on warrants related to a charge of conspiracy to transfer funds with the intent to promote illegal gambling. The charge was brought by federal prosectors in Manhattan in a complaint unsealed on Monday.

Lefebvre was arrested on Monday in Malibu, California.

Money transfer companies like NETeller, based on the Isle of Man and traded publicly in Britain, allow gambling companies to transfer money collected from U.S. bettors to overseas bank accounts. The Isle of Man is in the Irish Sea.

Lawrence was extradited to New York and appeared at a hearing at Magistrate's Court in Manhattan on Friday.

Assistant U.S. Attorney Timothy Treanor argued that Lawrence was a flight risk because he owned a private jet and had founded a business in which the "entire premise" was to "stay outside the jurisdiction of U.S. law enforcement."

Treanor said that Lawrence knew which jurisdictions outside the United States were lax about extraditing fugitives wanted for money laundering offenses.

"It would be difficult for us to ever get him back again," Treanor said.

Lawrence's lawyer, Peter Neiman, argued at Friday's hearing that his client was not a flight risk because he has a wife and child in New York City and was buying a second apartment in the city, where he spends about 100 days a year.

According to federal prosecutors Lawrence resides in the Bahamas.

Under the terms of his bail set on Friday, Lawrence is not allowed to travel outside New York City until March 1. Thereafter, if he showed that he was not going to flee, he would be allowed to travel within the continental United States if he gave authorities five business days notice.

A judge in Los Angeles earlier this week set bail at $5 million for Lefebvre. He is expected to arrive for a court appearance in New York early next week, prosecutors said.

If convicted, Lawrence and Lefebvre each face a maximum 20 years in prison.

By arresting Canadians Lawrence and Lefebvre, U.S. prosecutors delivered a severe blow to online gambling companies that are flouting a U.S. ban on Internet gambling.

NETeller is the latest target of a U.S. crackdown on online gaming, which began with the arrest of BETonSPORTS (BSS.L: Quote, Profile , Research) Chief Executive David Carruthers in Texas last July.

Lawrence and Lefebvre founded NETeller in 1999. Lawrence resigned as a nonexecutive director in October after stepping down as nonexecutive chairman in May. Lefebvre resigned as a nonexecutive director in December 2005.

NETeller closed its U.S. Internet gambling services on Thursday, erasing more than 65 percent of its business. (Additional reporting by Martha Graybow)

[StarnetGypsy]

Money made from NETeller - billions
Bail for laundering money - $5/million
Prison time for crime - 20/years
Freedom - PRICELESS

(he'll have a false passport w/in days of getting out)

[Mr Falcone]

Dont think either will do any time. Pay huge fine, probation. US got what they wanted outta this already. NETELLER is out of BIZ. Hope they dont follow the BOS lead, and decide to stiff everyone. They gotta be thinking along those lines I would imagine.

[jag]

very large bail...

i guess i'm naive; and, our bill of rights has certainly been truncated by the current cabal; but, the eighth amendement is clear:

Amendment VIII

Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted.

in fact let's review the entire bill of rights to keep this in perspective:
-----------------------------------------

Bill of Rights
Amendment I

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.

Amendment II

A well regulated militia, being necessary to the security of a free state, the right of the people to keep and bear arms, shall not be infringed.

Amendment III

No soldier shall, in time of peace be quartered in any house, without the consent of the owner, nor in time of war, but in a manner to be prescribed by law.

Amendment IV

The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

Amendment V

No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a grand jury, except in cases arising in the land or naval forces, or in the militia, when in actual service in time of war or public danger; nor shall any person be subject for the same offense to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.

Amendment VI

In all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the state and district wherein the crime shall have been committed, which district shall have been previously ascertained by law, and to be informed of the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor, and to have the assistance of counsel for his defense.

Amendment VII

In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise reexamined in any court of the United States, than according to the rules of the common law.

Amendment VIII

Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted.

Amendment IX

The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.

Amendment X

The powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are reserved to the states respectively, or to the people.

[StarnetGypsy]

Thanks for the reminder Jag. Sad to see our Bill of Rights being trampled on lately. I'm afraid that the Patriot Act prettymuch erases each line, and since there's a so-called link to terrorism because of iGaming & money laundering, that's the authority they're acting on?

Not sure, and just my opinion ...

Normally Mr.F I'd agree w/you that they wouldn't do time, especially considering this is probably the first offense for both these guys, but look at what happened to JC, he did time, and I imagine it was his first offense as well. If people don't end up doing time, and only choose to take their business elsewhere, then enforcement has no teeth and others will take their place? Not arguing your opinion, just thinking out loud ...

[Mr Falcone]

I hear ya. Unlike JC, I really dont see these guys fighting it. I mean truth be told they have cashed, and most likely cop a plea. But I dont have the answers, all though at times I think I do.LOL.....Time will tell

[clevfan]

Neteller founder pledges to 'clear his name'

By Daniel Pimlott in New York
Financial Times
Updated: 4:10 a.m. ET Jan 20, 2007

Stephen Lawrence, one of the two founders of Neteller accused of laundering billions of dollars for internet gambling companies, pledged to "clear his name" when he appeared in court in New York Friday after receiving bail of $5m.

John Lefebvre, his co-founder and co-accused also on bail of $5m, is due to appear on Wednesday.

The men were arrested last Monday and charged by US attorneys in Manhattan with helping to transfer illegal gambling proceeds from US citizens to internet gaming companies.

Mr Lawrence, the internet money transfer company's former chief executive, was arrested in the Virgin Islands, but flew to New York, where the charges are filed, on Thursday night.

The conditions of his bail, to which he has already contributed $2.5m in cash and placed his $1.5m Manhattan apartment as security for, stipulate that he must not leave the five boroughs of New York until at least the end of February and has to hand in his passport.

At the court hearing, US prosecutor Tim Treanor pushed for tougher terms on the bail, saying Mr Lawrence was a great flight risk who might seek to leave the US at any time on his private jet. He claimed Mr Lawrence had deliberately hidden assets of at least $100m from filings related to the case.

Peter Neiman, Mr Lawrence's lawyer, denied he would seek to flee the country and "had every reason to be here to clear his name". But he admitted that Mr Lawrence had not disclosed some of his assets out of fear that the US government would seek to demand them in exchange for the money he is accused of laundering.

Mr Lawrence and Mr Lefebvre, both Canadian citizens, founded Neteller in 1999. If convicted, they each face up to 20 years in jail. Neteller quit its US business following the arrests. The arrest of Mr Lefebvre and Mr Lawrence is the third time internet gambling executives from companies publicly listed in London have been detained in the US since the summer. US authorities consider online gambling to be illegal, although it is allowed in the UK.

David Carruthers, former chief executive of Betonsports, was arrested in July and is awaiting trial in St Louis on racketeering and fraud charges. In September, Peter Dicks, former chairman of Sportingbet, was arrested in New York, although he was later released.

The current attack on Neteller was notable on two counts, US online gambling observers said.

"The first surprise is that this is the first substantial criminal prosecution of a payments processor," said Sue Schneider, chief executive of the River City Group, which runs conferences for the online gambling industry, although both Paypal and Citibank have been subject to civil prosecutions.

"The second is that any internet gambling executive is coming to the US."