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January 2007
The beginning of the end for Neteller in the United States was on January 15th, 2007. It was only a few months earlier that executives at the British company had vowed that they would continue operations in the United States, despite the recent passage of the UIGEA.
However, U.S. officials stepped up the stakes in a big way when they arrested two of the founders of Neteller, Stephen Lawrence and John Lefebvre. Both men were travelling in the U.S., separately. They were detained by authorities and charged with tax evasion and money laundering in connection with facilitating transactions between American poker players and online gambling companies. At the time of their arrest, neither man had a connection to Neteller in any capacity other than as a shareholder. However, they became the faces of the company and the ones who would take personal responsibility for the actions of it.
In June of 2007, Lawrence plead guilty to conspiracy, followed by Lefebvre, who also plead guilty about two weeks later. The two agreed to cooperate with U.S. authorities and to be at least partially responsible for a $100 million fine placed on the company.
The day after the arrest of Lawrence and Lefebvre, Neteller, a publicly traded company, suspended trading on the London exchange. This was to avoid a massive selloff as the news of the arrests became publicly known and shareholders began to panic.
Finally, Neteller gave in, and on January 18th, 2007 it was announced that, "As of today… at 12:01 a.m. GMT, U.S. resident customers were no longer able to transfer funds using Neteller's services to or from any online gambling site."
As part of the crack-down on Internet gambling and in conjunction with the focus on payment processor Neteller, the U.S. Attorney's Office had obtained court-ordered warrants to restrict and seize all funds involving Neteller and U.S. players. This was of course the nightmare scenario for poker players across the United States, as Neteller was one of the primary sources of funding and withdrawing from online poker sites for American players.
Neteller acknowledges the seizure and says that the amount of money in question "does not exceed $55 million." Meanwhile, Ron Martin, Group President and CEO of Neteller, reiterates the company's stance that "The return of funds to our US customer is a top priority for Neteller."
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