Payback at What Cost? A Look at the Latest NETeller Situation...By Hartley Henderson

[Rogthedodger]

There finally seemed to be some good news in the NETeller situation, when the company issued a press release stating that it had worked out an agreement with the U.S. DOJ to have money released back to Americans. The press release stated that an announcement would be made within 75 days with details on the repayment plan, but it would first have to pass through forensic accountants. This statement has raised more questions than it has resolved. For example, why is there a delay of 75 days before the company can release any details, and why is a forensic auditor involved? Why is the Southern District New York Court, i.e. the same court that is prosecuting NETeller's founders the one that entered into the agreement? And finally, the press release stated it will announce a plan to distribute funds seized by U.S. prosecutors to its U.S. customers within the next 75 days. What about the money held in escrow?

Without a doubt the timing is ominous considering the statement was made only one week after the case against Lefevre and Lawrence was continued again in the same Southern District of New York court. Conspiracy theorists may actually believe that the U.S. DOJ has worked out some sort of agreement in the last week which will see a sweetheart deal for NETeller's founders and the company while sending American customers down the river. Clearly if an accountant is involved, it is only because the IRS wants to determine exactly who has been gambling, how much they have gambled and whether the gamblers have declared any gains on their tax returns. Perhaps the government realized there could be bigger fish in the sea than a couple of former NETeller managers. How many years exactly will the accountants go back?

A letter was sent to the head of the NETeller Customer Coalition for some comments, and while he was somewhat pleased with the announcement, he was also cautious. In a letter to the Coalition, the spokesperson wrote: "While I'm happy with the announcement, I don't want to back off until the money is back in our pockets." The spokesperson also stated that he believed the organization was mostly responsible for NETeller's announcement, since it was made only one day after the coalition sent out "An Open Letter to NETeller" which in turn convinced a NETeller representative to spend 40 minutes looking at their site. Clearly the threatened lawsuit didn't hurt either. Having said that, NETeller did state in February that it was trying to work out a deal with the DOJ to have the money returned to U.S. customers. Thus, the coalition's letter may have just convinced the company to make a statement a bit earlier than planned. When asked whether the group was concerned about the IRS getting involved, the spokesperson didn't seem too concerned. His reply: "In terms of IRS concerns etc., I think that will need to be worked out with everyone's accountants." The group clearly just wanted the money returned. The details of how that is going to happen are irrelevant to the group.

So the question has to be asked: If NETeller does indeed return the money to U.S. customers in the near future, at what cost will that be? In due time we will all know.

Regardless, MajorWager.com will continue to seek answers until the money is back in customer's pockets.

03-20-2007
Hartley Henderson
MajorWager.com
Henderson@majorwager.com

[StarnetGypsy]

The main reason I liked having a NT card was that I thot a UK company would never release their account info to the states. Boy howdy .. was that assumption off base.

Doubt I'll ever open an electronic account anywhere again ... for any fecking reason.

[HOUSTON GAMBLER]

Star, and to think you risk sheading blood for a country that wants to tell you where you can spend your money that in 99% of the time has already been taxed anyway.

Nothing more than this is the only war they can win, after all that Vietnam II is costing alot of money.

[Minnow]

I have tried to use nt statements in the past for figuring out my taxes.. it sucks that the years aren't listed.

Lots of unanswered questions attached to this latest news..

[StarnetGypsy]

Originally Posted by HOUSTON GAMBLER

Nothing more than this is the only war they can win ...

They've only won a battle, not the war

[Hartley]

As a Canadian, for the life of me I can't figure out why non professional gamblers would be charged on winnings anyways. I've had winnings withheld in Vegas and could never understand the reasoning. The U.S. government already taxes the casinos, the race tracks and we won't even talk about lotteries. I think the United States is the only country that taxes winfalls.

I know in Canada one of the governments contemplated the idea of taxing lottery winnings over $1 million and the backlash was so strong they cancelled the idea for fear of losing the election

[auspice]

Originally Posted by Minnow

I have tried to use nt statements in the past for figuring out my taxes.. it sucks that the years aren't listed.

Lots of unanswered questions attached to this latest news..

Remember when we initially heard the budget that was being allocated to the compliance of the new legislation? It was tiny. Someone mentioned that the IRS might be used as the enforcement arm of the internet gaming laws, sort of a fear factor senario? Well, here we are.

[StarnetGypsy]

Originally Posted by auspice

Remember when we initially heard the budget that was being allocated to the compliance of the new legislation? It was tiny. Someone mentioned that the IRS might be used as the enforcement arm of the internet gaming laws, sort of a fear factor senario? Well, here we are.

Auspice ..

They allocated $10/mil. Now with NT probably striking a deal and giving up all their US clients in the process, yes .. IRS will become a factor possibly. There however is a backlog of 5/yrs w/re IRS and audits, so how effective it's gonna be remains to be seen.