Neteller Will Forfeit $136 MilNeteller PLC has agreed to forfeit $136 million and admit wrongdoing for violating U.S. laws against Web-based gambling in a deal to avoid prosecution on a criminal conspiracy charge.
The deal was approved in U.S. District Court in Manhattan by Judge Kevin P. Castel following a meeting earlier Wednesday by the board of directors of Neteller in the Isle of Man, where it is based.
The company also agreed to return $94 million it held in the accounts of U.S. customers. The government has said that nearly all of the $5.1 billion in transactions processed by the company in the first half of 2006 involved online gambling _ and most of the revenue was generated by U.S. customers.
The deal with prosecutors also requires the company to submit to a monitor for 18 months to ensure the company does not Internet-based gambling to occur with U.S. customers.
John Carroll, a lawyer who represented Neteller, said outside court: "The company hopes to put this behind us. We look forward to getting money back to our customers and growing the business."
The deal was announced after two top executives of the company in the last month entered guilty pleas to charges that they violated U.S. laws against Web-based gambling through their work at Neteller.
John David Lefebvre, 55, a Neteller co-founder, had said during his July 10 guilty plea to a conspiracy charge that Neteller was originally created in 1999 to enable the transfer of money online, but eventually concentrated almost solely on Internet gambling transactions.
By March 1, 2004, the company had nearly 170 employees, 600,000 member accounts and 1,000 merchants registered.
Prior to Lefebvre's plea, Neteller co-founder Stephen Lawrence pleaded guilty to criminal conspiracy, saying he had learned that providing payment services to online gambling Web sites serving customers in the United States was wrong.
Days after their January arrests, the company, which was founded in 1999, stopped handling transactions for U.S. customers.
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Associated Press
Originally published July 18, 2007 3:27 pm ET
