From jackpot to a jail cell - John Lefebvre has lived an amazing life

[clevfan]

From jackpot to a jail cell
From lawyer to busker to Internet tycoon, former Calgarian John Lefebvre has lived an amazing life. Now he faces charges as the U.S. tries to stamp out online gambling


CanWest News Services; with files from CanWest News Services


Saturday, January 20, 2007


Former Calgarian John Lefebvre hit the jackpot in November 2005 when he cashed in $123 million worth of shares of his offshore company, NETeller Inc., which handles billions of dollars of money transfers for Internet gamblers.

The bonanza enabled him to pursue a life of luxury, including a beach house in Malibu (which actress Jennifer Aniston was also eyeing), and to support various academic, philanthropic and political endeavours.

But in a sudden reversal of fortune this week, Lefebvre, 55, was arrested by FBI agents at his Malibu home and jailed on charges of conspiring to promote illegal gambling by transferring billions of dollars of cyberspace bets placed by U.S. citizens with overseas gambling companies. His business partner, former Calgarian Stephen Lawrence, was arrested in the Virgin Islands and faces the same charges.

If convicted, both men could face up to 20 years in prison. They have each posted $5-million US bail and are scheduled to appear in a New York court on Jan. 26.

ONLINE GAMBLING CLAMPDOWN

NETeller is the latest target of an American crackdown on online gambling.

"The U.S. is exerting its long arm in an effort to totally stamp out online gaming in their country and in this case are pushing as hard as they can," said Michael Lipton, a Toronto lawyer who specializes in gambling law.

Lipton predicts the Canadians are "in for a good fight" and are being used as examples by American authorities eager to stamp out online gambling in their country.

"They used to go after the operators of these sites. Now, they are focused on the facilitators who profit. This is a serious attempt to run it out of the States," Lipton said.

Part of the nearly year-long FBI investigation led authorities to an account in the name of Cardload at the National Bank of Canada in Calgary, according to the indictments filed in U.S. District Court in New York.

The FBI allege $50 million US was transferred from an account in the U.S. to the Calgary branch between March and April of last year and that Cardload is a wholly owned subsidiary of NETeller.

Records of wire transfers from a U.S. bank show that between January and March 2006, another $98 million US was transferred to an account under a different name, but affiliated with the accused, again to the National Bank in Calgary, according to court documents obtained by the Calgary Herald.

Lefebvre and Lawrence are former directors of the company and knowingly broke the law, according to an FBI special agent based in New York.

"Public filings acknowledge that a large chunk of their business was derived from handling wagers from American customers," James Margolin said Wednesday.

"Under U.S. law, gambling is a very tightly regulated industry and the solicitation of American bettors by offshore companies is illegal."

$7 BILLION IN TRANSACTIONS

Based in the Isle of Man, NETeller describes itself as "the largest independent online money transfer business in the world" with more than three million customers in 160 countries, 3,500 merchants and more than $7 billion US in annual transactions. The company's shares are listed on the London Stock Exchange.

The FBI alleges that more than 80 per cent of NETeller's clients are Americans.

NETeller allows users to transfer money to global companies for a fee. This type of firm has grown in popularity as an increasing number of credit card companies have begun refusing to accept payments to online gambling sites.

Lefebvre, who left the company's board of directors in December 2005, still holds a stake of less than six per cent.

Lawrence, 46, who resigned as non-executive director of the company in October 2006, also holds less than a six-per- cent stake.

NETeller announced Thursday it is ceasing to handle gambling transactions from U.S. customers because of restrictive legislation and uncertainties about regulations. U.S. customers can still use their accounts for non-gambling transactions, the company said in the statement.

The move caused a ripple effect in Calgary where NETeller operates a call centre with more than 700 employees.

On Thursday afternoon, several workers at NETeller's northeast office told the Herald they were bracing for layoffs, and some said there had already been more than two dozen people let go in recent weeks.