Neteller Issue Resolved by end of July

Press Release

NETELLER Announces Settlement of US Situation



Wednesday, 18 July 2007 - NETELLER Plc (LSE: NLR), the independent global online payments business, today announces that the Company has entered into a Deferred Prosecution Agreement (“DPA”) with the United States Attorney's Office for the Southern District of New York (“USAO”). The DPA represents the resolution of the USAO’s investigation into the Company.
Pursuant to the DPA, the Company has consented to the filing of a criminal information relating to transactions between Internet gambling merchants and persons located in the United States. The USAO has agreed to defer the prosecution of any federal charges and, as a consequence, the Company will not be convicted of any federal crime, as long the Company fulfils the set conditions of the DPA during the two year term of the agreement. At the conclusion of the two year term, the criminal information will be dismissed. The key terms of the DPA are set out in more detail later in this announcement. The United States District Court for the Southern District of New York has approved the deferral of the prosecution. As part of the DPA, the Company has also agreed to forfeit US$ 136 million to the United States. This amount includes the approximately US$ 60 million that the USAO has previously seized.
Additionally the Company announces:

• Following this resolution, the Company will seek to publish its audited annual accounts for 2006 and have its shares restored to trading on AIM as soon as practicable thereafter.
• The Company is using its best efforts to allow withdrawal requests as soon as possible and US customers will be able to sign in to their NETELLER account to request the withdrawal of their funds by no later than 30 July 2007. The exact date upon which US customers will be able to make requests will be communicated to US customers via email and through our website.

Ron Martin, President & CEO, said “This agreement resolves the USAO’s investigation relating to the Company’s former US business activities. We believe that this settlement is in the best interests of NETELLER and its shareholders."
“Our customers, employees and shareholders have all patiently waited for this resolution. We anticipate within the next few weeks that we will have fully implemented the plan for the return of funds to our US customers and are hopeful that, by that time, we will have restored the Company’s shares to trading on AIM. We can now begin to refocus our efforts on building and strengthening the NETELLER business in the growing markets of the European and Asia Pacific regions. I look forward to sharing further information about the Company’s progress over the coming months.”
Key terms of the Deferred Prosecution Agreement

The settlement takes the form of a two year DPA with the USAO. In the DPA, NETELLER has consented to the filing with the United States District Court for the Southern District of New York of a criminal information charging NETELLER with participating in a conspiracy in violation of certain US laws. If NETELLER fulfils its obligations under the DPA, the criminal information will be dismissed, following the two year term.
Specifically, the DPA contains the following main points:

• NETELLER, as detailed in the “Statement of Admitted Facts” attached to the DPA, admits that it had operated in the US an unlicensed money transmitting business and had participated in the performance of financial transactions for the purpose of promoting unlawful transactions between internet gambling merchants and persons located in the US.
• NETELLER agrees that it will pay an amount to the United States totalling US$ 136 million which is disgorgement of certain profits received by NETELLER from the activities described in the Statement of Admitted Facts. This amount includes the approximately US$ 60 million that the USAO has previously seized. NETELLER agrees that it will satisfy the remaining portion of its forfeiture obligation with a payment of US$ 40 million to be paid on or before 15 October 2007, and the remaining balance (approximately US$ 36 million) to be paid on or before 17 January 2008.
• NETELLER agrees to cooperate fully with US authorities in all matters relating to the ongoing investigations by the USAO.
• NETELLER agrees to fully implement procedures and controls to prevent illegal transactions between internet gambling merchants and persons located in the US and to continue to retain Navigant Consulting Inc., a forensic accounting firm, to monitor NETELLER’s compliance with these procedures and controls.

Distribution Plan to be implemented

As announced on 4 June, the Company has agreed to a plan for the distribution of funds to its US customers. The agreed plan details the process and mechanisms by which US customers will be able to initiate the return of their funds after the plan is implemented. NETELLER is using its best efforts to start implementing the plan as soon as possible and, in any event, by no later than 30 July 2007. The Company will communicate to US customers via email and through its website the exact date upon which such customers will be able to make requests.
Restoration of trading to AIM

As stated in the Company’s announcement of 13 July, the Company continues to make progress regarding the ongoing suspension of the Company's shares from trading on AIM. The Company is in discussions with its advisers and AIM and understands that the admission of the Company’s ordinary shares to trading on AIM has not to date been cancelled.
With today’s announcement of a resolution of the USAO investigation, the Company is now focused on finalising and publishing its audited annual accounts for 2006. The Company will endeavour to post the 2006 accounts to its shareholders as soon as practicable following which the Company anticipates that trading in the Company’s ordinary shares on AIM will be restored.
Further details will be announced as and when they become available.

NETELLER agrees to cooperate fully with US authorities in all matters relating to the ongoing investigations by the USAO.

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so any and all information Neteller has pertaining to ownership/control/banking of a sportsbook gets handed over to the feds

great

hope the books were smart enough to cover their asses on this

Yep...

Nothing like a nice big tax for the government...

The feds are now going to have all the banking information of each book and likely the owners or officers info too... They used to only have this for public companies. Hopefully the books are smart enough to move their money to banks that do not cooperate with US investigations. They'll also need to keep their asses out of the U.S. if they had a neteller merchant account.

Expect a bunch of indictments come football season if any idiots travel here.

At least the battle line has been drawn and any book owner arrested in the U.S. is a complete baffoon.

The only books I would consider this football season are ones not catering to US customers.

-Sean

sean1 said:

Yep...

Nothing like a nice big tax for the government...

The feds are now going to have all the banking information of each book and likely the owners or officers info too... They used to only have this for public companies. Hopefully the books are smart enough to move their money to banks that do not cooperate with US investigations. They'll also need to keep their asses out of the U.S. if they had a neteller merchant account.

Expect a bunch of indictments come football season if any idiots travel here.

At least the battle line has been drawn and any book owner arrested in the U.S. is a complete baffoon.

The only books I would consider this football season are ones not catering to US customers.

-Sean

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I agree 100% on this quote...Expect more indictments to be comming during the football season.

Neteller to Forfeit $136 Million
In Deal With U.S. Prosecutors

By CHAD BRAY
July 18, 2007 12:31 p.m.

NEW YORK -- Online payment services company Neteller Inc. agreed to forfeit $136 million as part of a deferred prosecution agreement with prosecutors in their probe of illegal online gambling.
At a hearing in federal court in Manhattan, John Carroll, a lawyer for the Isle of Man company, said Neteller had agreed to enter the agreement, in which the firm will avoid being prosecuted on a conspiracy charge if it avoids further wrongdoing for two years.
As part of the pact, Neteller will return an additional $94 million it had been holding for U.S. customers and will be under a monitoring program for an 18-month period that began last month.
"The company's happy to put this behind us," Mr. Carroll said afterwards. "We look forward to getting money back to our customers and growing the business."
At the hearing before U.S. District Judge P. Kevin Castel, Mr. Carroll said the company agreed, as part of a statement of facts under the deferred prosecution agreement, that it had violated U.S. law.
Neteller co-founders John David Lefebvre and Stephen Eric Lawrence each recently pleaded guilty to a conspiracy charge in connection with the alleged transfer of Internet gambling proceeds. They each face up to five years in prison on the charge.
Mr. Lawrence, Neteller's former chairman, is scheduled to be sentenced Oct. 29, while Mr. Lefebvre, its one-time president, is scheduled to be sentenced Nov. 1.
Both men also agreed to a forfeiture allegation of $100 million in the matter and are cooperating with the government's probe. Neteller, which is publicly traded in London, has said Messrs. Lawrence and Lefebvre are no longer affiliated with the company. Neteller has stopped handling transactions involving online gambling from U.S. customers.
Electronic Clearing House Inc., another online payment processing company, entered a non-prosecution agreement with the government in March and agreed to disgorge $2.3 million. Neteller was one of its customers.
U.S. authorities have cracked down on online gambling in recent months, arresting executives of some overseas online gambling firms when they travel to the U.S. President Bush signed into law legislation in October that makes it illegal for banks and credit-card companies to process payments from U.S. customers to online gambling sites.
U.K. online gambling firm BetOnSports PLC pleaded guilty to a racketeering conspiracy charge in May in federal court in St. Louis. The company's founder, Stephen Kaplan, and Chief Executive David Carruthers are still facing criminal charges in the matter.
Write to Chad Bray at chad.bray@dowjones.com

Extortion at its finest

God bleeeeess the U.S.AAAAAAAA!!!

At least this will help with the budget deficit:thumbsup: ....they also just announced they are pulling out of Israel.

sounds like we are getting our money. This is good news. I guess they have enough cash to pay US members without the 60 mil they forfeited. Time will tell.

seems like GOOD news to all those who had their cash held hostage since January!

I guess they have enough cash to pay US members without the 60 mil they forfeited. Time will tell.

They had a couple hundred million on their last published balance sheet and that was over and above the customer money which is held by a third party. There's also a forensic accounting firm in the middle of all this verifying the numbers.
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I'm wondering what happens to those who had their money in the ACH system when it was seized? Are they going to get that back from Neteller or is it gone? If its gone and neteller is not going to reimburse the account holders people will get stiffed if they had funds that were seized by the DOJ, won't they?

I'm wondering what happens to those who had their money in the ACH system when it was seized? Are they going to get that back from Neteller or is it gone? If its gone and neteller is not going to reimburse the account holders people will get stiffed if they had funds that were seized by the DOJ, won't they?

That money was restored back to your balance at Neteller.
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WVU said:

sounds like we are getting our money. This is good news. I guess they have enough cash to pay US members without the 60 mil they forfeited. Time will tell.

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You guess is the only thing you got right. Not only do they forfeit the already glommed 60 mil, they need to liquodate and produce another 76 mil on top of that. Good news will be determined when the money is in my hands, not a second sooner. That is the time I am waiting to tell.

WVU said:

sounds like we are getting our money. This is good news. I guess they have enough cash to pay US members without the 60 mil they forfeited. Time will tell.

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I hope your right brother.

SENDITIN said:

I'm wondering what happens to those who had their money in the ACH system when it was seized? Are they going to get that back from Neteller or is it gone? If its gone and neteller is not going to reimburse the account holders people will get stiffed if they had funds that were seized by the DOJ, won't they?

That money was restored back to your balance at Neteller.
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That's good news I guess. I don't have funds there but I am glad for those that do that they will get their money back

Great news, the usa gov't is allowing neteller to pay us back our own money.

Akillies said:

Great news, the usa gov't is allowing neteller to pay us back our own money.

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Great news, they say that it will happen by July 30th. That is a deadline we all have wanted. Others have more than I but just to get closure will be a major relief for me. There are some pretty sad stories of guys going south because of their funds getting held. If there is anything good about this as many at the bash will have something to celebrate.