NETeller settles w/DoJ

[Mousey]

(AFX UK Focus) 2007-07-18 18:57 GMT:

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with US authorities - UPDATE

Article layout: raw
(adds detail on Israel operations)

LONDON (Thomson Financial) - E-payment company NETeller PLC said it has reached a settlement with US authorities on the Attorney's Office probe into the alleged violation of the country's web-based gambling laws by its former directors.

The settlement takes the form of a two-year deferred prosecution agreement under which the company will forfeit 136 mln usd to the US, implement more stringent procedures, and retain forensic accounting firm Navigant Consulting Inc to monitor its compliance with these controls.

NETeller said that the Attorney's Office has agreed to defer the prosecution of any federal charges until the end of the two-year period, after which, it will not be convicted of any federal crime if it fulfils all set conditions under the agreement.

Earlier, the company had issued a "Statement of Admitted Facts" under which it admitted 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."

The company said it will fully cooperate with US authorities and that it will seek to have its shares restored to trading on AIM.

NETeller also said it is using its best efforts to allow withdrawal requests as soon as possible, and US customers will be able to sign in to their account to request the withdrawal of their funds by no later than July 30.

The company also said it will no longer process transfers to online gambling sites on behalf of Israeli customers with effect from 0001 GMT on July 19.

However, it said these customers will still be able to ....

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From Reuters...

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Wed Jul 18, 2007 6:33PM BST

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[-] Text [+] By Paritosh Bansal

NEW YORK (Reuters) - Payments processor NETeller (NLR.L: Quote, Profile, Research) will forfeit $136 million (66 million pounds) but will not be prosecuted for conspiracy under a deferred prosecution agreement with the U.S. government announced on Wednesday.
The agreement is the latest development in a U.S. crackdown on Internet gambling that began a year ago with the arrest of the then-chief executive of BETonSPORTS (BSS.L: Quote, Profile, Research), David Carruthers.

Under the deal, approved by U.S. District Judge P. Kevin Castel in Manhattan, NETeller will also pay back $94 million owed to customers.

The company pleaded not guilty to a conspiracy charge related to its handling of gambling proceeds.

The charge will be dismissed after two years if the company meets the conditions of its agreement with the U.S. Attorney's office in Manhattan.

"The company is happy to put this behind us," a NETeller lawyer said after the hearing.

NETeller halted operations in the United States in January, abandoning two-thirds of its business after authorities arrested its Canadian founders and charged them with handling billions of dollars in illegal gambling proceeds.

The co-founders, John Lefebvre and Stephen Lawrence, have already pleaded ....

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Now see... that wasn't so difficult, was it? A little coercion, a lot of intimidation... throw in a smattering of extortion and money comes pouring into the US...

 

[Mousey]

A few more details from the

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:

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.

 

[pokeraddict]

Was just about to post this. I keep wondering about Ecocard and ePassporte's thoughts. I know ePass has taken the opinion that if they don't handle sports gambling they are OK. At least it sound like US players will get their money. Luckily I'm not owed anything.

 

[silcnlayc]

The USA must get all the funds they can to cover all the lawsuits against them from other countries for WTO violations...just feathering their nests until they open USA up to all online casinos...IMHO

 

[Mousey]

DOJ press release:

United States Attorney
Southern District of New York
FOR IMMEDIATE RELEASE CONTACT: U.S. ATTORNEY'S OFFICE
July 18, 2007 YUSILL SCRIBNER,
REBEKAH CARMICHAEL
PUBLIC INFORMATION OFFICE
(212) 637-2600
ISLE OF MAN-BASED INTERNET PAYMENT COMPANY NETELLER PLC
ADMITS CRIMINAL WRONGDOING AND AGREES TO FORFEIT
$136 MILLION FOR CONSPIRING TO PROMOTE
INTERNET GAMBLING BUSINESSES
MICHAEL J. GARCIA, the United States Attorney for the
Southern District of New York, announced today that NETeller PLC
("NETeller") -- an Internet payment business based in the Isle of
Man and publicly traded on the Alternative Investment Market
("AIM") of the London Stock Exchange -- has admitted to criminal
wrongdoing and has agreed to forfeit $136,000,000 in criminal
proceeds as part of an agreement to defer prosecution of NETeller
for its participation in a conspiracy to promote Internet
gambling businesses and to operate an unlicensed money
transmitting business. A felony Information specifying the
charges against NETeller; a Statement of Admitted Facts by
NETeller; and the Deferred Prosecution Agreement, which was
accepted by United States District Judge P. KEVIN CASTEL, were
filed today in federal court in Manhattan.
The Charges
The felony Information filed today charges that
NETeller participated in a conspiracy, in violation of Title 18,
United States Code, Section 371, to: (i) use the wires to
transmit in interstate and foreign commerce bets and wagers on
behalf of persons engaged in the business of betting and
wagering, in violation of Title 18, United States Code, Section
1084; (ii) conduct illegal gambling businesses, in violation of
Title 18, United States Code, Section 1955; (iii) conduct
international monetary transactions for purposes of promoting
illegal gambling, in violation of Title 18, United States Code,
Section 1956(a)(2)(A); and (iv) conduct an unlicensed money
transmitting business, in violation of Title 18, United States
Code, Section 1960. The Information also contains a criminal
Forfeiture Allegation against all property involved in or derived
-2-
from the criminal wrongdoing, in the amount of at least $1
billion dollars.
The Criminal Wrongdoing
As set forth in the Information and the Statement of
Admitted facts:
In 1999, STEPHEN ERIC LAWRENCE and JOHN DAVID LEFEBVRE
began developing the Internet payment system that was used by
NETeller and its predecessors to provide online payment services
to Internet gambling companies. In April 2004, NETeller became a
public company and listed its shares for trading on the AIM of
the London Stock Exchange. At the time, NETeller openly stated
in its prospectus, issued in connection with its initial public
offering ("IPO"), that its conduct violated the law in the United
States.
At its peak in September 2005, NETeller had a market
capitalization of approximately $2 billion. Over the years,
NETeller and its predecessors processed more than $10 billion in
payment transactions for customers in the United States related
to the Internet gambling industry, and consistently derived
approximately 75% or more of its annual profits from such
transactions.
NETeller's illegal conduct in the United States did not
end until January 2007, when LAWRENCE and LEFEBVRE were arrested
on warrants issued by the United States District Court for the
Southern District of New York. Earlier this month, both LAWRENCE
and LEFEBVRE pleaded guilty to charges that they conspired with
others to operate an unlicensed money transmitting business and
to promote illegal gambling by providing payment services to
enable offshore Internet gambling businesses to access customers
in the United States. LAWRENCE and LEFEBVRE each face a maximum
term of imprisonment of five years and a maximum fine of $250,000
or twice the gross pecuniary gain from the offense. In addition,
LAWRENCE and LEFEBVRE each admitted to forfeiture allegations
requiring them to personally forfeit an additional $100 million
dollars to the United States, which they are expected to pay in
full prior to sentencing. LAWRENCE and LEFEBVRE are currently
scheduled to be sentenced by Judge CASTEL on October 29, 2007.
In its Statement of Admitted Facts issued in connection
with the Deferred Prosecution Agreement, NETeller admitted that
NETeller and its predecessors, through the conduct of certain
officers and directors: (i) knowingly operated an unlicensed
money transmitting business in the United States; (ii) knowingly
-3-
agreed to promote illegal Internet gambling by using the wires
and other means to transmit in interstate and foreign commerce
bets and wagers from customers in the United States to numerous
Internet gambling businesses located outside of the United
States, and payments to customers in the United States from
numerous Internet gambling businesses located outside of the
United States; and (iii) intentionally took steps to avoid
detection and jurisdiction in the United States by operating in
the United States through agents and companies that were not
owned, but were controlled, by NETeller and its predecessors.
The Deferred Prosecution Agreement
As part of the Deferred Prosecution Agreement, NETeller
has agreed to forfeit $136 million in profits from its wrongdoing
to the United States in a civil forfeiture action. In addition,
NETeller will return to customers in the United States
approximately $94 million which NETeller currently has on deposit
in a foreign bank account. NETeller has also agreed to cooperate
fully with the Government. Under the Agreement prosecution of the
criminal charges against NETeller will be deferred for a period
of two years, until July 2009, if specified conditions are met.
At the end of that period, if NETeller has fully complied with
all the terms of the Agreement, the Government will move to
dismiss the Information.
In addition to the foregoing, the Agreement also
imposes permanent restrictions and controls on the operations of
NETeller, including, among other things, that: (i) NETeller will
not participate in illegal gambling transactions involving
persons located in the United States; (ii) NETeller will maintain
procedures and controls designed to prevent its services from
being used to conduct U.S. gambling transactions; and (iii)
NETeller will monitor regularly the effectiveness of its
procedures and controls designed to prevent its services from
being used to conduct U.S. gambling transactions, and will revise
and update its procedures and controls as necessary to achieve
that purpose. In order to ensure NETeller's compliance, the
Agreement also requires NETeller to retain a monitor for a period
of at least eighteen months. The restrictions and controls on
the company's operations in the United States will remain in
effect and the company's cooperation will continue after charges
against the company are dismissed.
Mr. GARCIA said that the decision to file a charge
against NETeller was based on several factors set forth in the
Department of Justice Principles of Federal Prosecutions of
-4-
Business Organizations (the "Principles"), including: (i) the
seriousness and duration of NETeller's conduct involving the
processing of billions of dollars of gambling transactions in
violation of state and federal law, and (ii) the involvement of
senior corporate officers in the company's criminal conduct.
The decision then to enter into the Deferred
Prosecution Agreement with NETeller, Mr. GARCIA continued, was
based on a variety of factors and considerations also set out in
the Principles, including: (i) the company's frank acknowledgment
of its misconduct and its willingness to cooperate with the
investigation; and (ii) the company's remedial actions, including
cessation of its participation in illegal gambling transactions
involving persons located in the United States; implementation of
procedures and controls to prevent its services from being used
to conduct U.S. gambling transactions; retention of a monitor to
ensure compliance with those procedures and controls; and
disgorgement of $136,000,000 in criminal proceeds.
Mr. GARCIA stated, "NETeller moved billions of dollars
offshore, serving as a financial conduit that enabled Internet
gambling businesses to prosper by violating United States laws.
Supporting illegal gambling is not a business risk, it is a
crime, and today's proceedings mark yet another example of the
consequences of engaging in that conduct."
Mr. GARCIA praised the tremendous investigative work of
the Federal Bureau of Investigation in this case.
Assistant United States Attorneys TIMOTHY J. TREANOR,
CHRISTOPHER P. CONNIFF, and SHARON COHEN LEVIN are in charge of
the prosecution.
07-186 ###

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There's a whole lot in there I don't like, and there's other stuff I'm not up on... like what's the Title 18 laws they've (supposedly) broken? Anyway, maybe all those who have money tied up in NETeller will be able to get it out soon.

 

[lojo]

Bad precedent for NLR to buckle under. Perhaps we are still a colony and police the motherland? How is it that a foreign corporation, in a sovereign land is subject to US law? Can I be prosecuted by a foreign govt. if one of their denizens participates with me in an activity illegal under their laws? How far can this concept reach?

Of course my guess is that it was all part of a deal to save the founders, but who was sacrificed on their behalf? What else is to be revealed?

This is a sad day in US-Brit financial/legal affairs, and international 'law'. The ramifications are staggering.

 

[EasyRhino]

Man, Neteller is jacked. Their profit in 2006 was $55 million, and liquid cash on hand was approx $135 million. And now they're going to disgorge $136 million.

 

[vinylweatherman]

Man, Neteller is jacked. Their profit in 2006 was $55 million, and liquid cash on hand was approx $135 million. And now they're going to disgorge $136 million.

Neteller wont be paying this though, they will pass this on through increased charges for it's services. Most likely, they will nudge up fees charged to casinos for processing transactions (players don't see this), but they will also look at extra charges for customers, although they will be careful not to drive them away.
When they DO relist, this forefiture will be a serious dent in profits for many years to come, and shares will probably open at basement prices, and will be an investment for either the very brave, or the very stupid, until such time as the positions of the other countries around the world becomes clear. They have already lost Canada, Turkey, and now Israel is for the chop

 

[Luigish890]

I'l be honest, I was actually expecting a heavier fine. Anyone wonder whether they'l be some information bargaining going on

I still think there will be more skeletons coming out, or maybe this has left a 'conspiracy theory' taste in my mouth!

 

[Mousey]

From

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Neteller reaches supergrass agreement with DOJUS customers to get money back no later than 30 July
By Burke Hansen in San Francisco → More by this author
Published Thursday 19th July 2007 10:10 GMT
Mobile computing: Opportunities and risk - Free whitepaper

Neteller has reached an agreement with American authorities concerning its financial transactions with American internet gambling customers.

The agreement, coming barely a week after two of its former founders reached plea agreements with the Department of Justice (DoJ), requires a forfeiture of $136m to the American government, a sum that includes approximately $60m in American customer assets frozen by the DOJ earlier in the year. Those disputed funds will be returned no later than 30 July.

The resolution of the Neteller case is good for Neteller's American customers, and good for the company itself, but very bad for virtually everyone else in the online gambling industry.

Neteller and the DOJ reached what is known as a deferred prosecution agreement (DPA), in which Neteller admits wrongdoing and agrees to cooperate with authorities in exchange for a conditional sentence. The DOJ files criminal information - basically an indictment without the grand jury hearing - in the Southern District of New York, and at the end of two years, if the DOJ considers Neteller's cooperation to have been sufficient, the charges are withdrawn.

The agreement also paves the way for Neteller shares to be relisted on the Alternative Investment Market (AIM) in London, and requires that financial auditing firm Navigant monitor its compliance with the terms of the agreement.

The end result of this is that Neteller will tell the DOJ everything it knows about the internet gambling industry regarding payment processing or whatnot. Since Neteller provided processing services for about 85 per cent of all online gambling sites, the DOJ stands to receive a treasure trove of inside information about the industry it loves to hate.

Ron Martin, president and CEO, claimed .....

 

[lojo]

Punks

 

[jetset]

Latest - Neteller financials

Neteller issued a delayed first quarter trading report today (July 25)

The report is hardly positive - after restructuring costs of over $12 million and other expenses the company posted a pre-tax loss for the three months to March 2007 of $14 million compared to a profit of $16 million the year previously.

Employees now number 425 in total, and the company has embarked on a major initiative to "....realign its cost base with anticipated revenues on a worldwide basis.

Cash balances after its recent $136 million settlement with the US DoJ are at $74.5 million.

Neteller has been re-admitted to the AIM.

Severe attrition to customer base - the active customer base outside of the US has fallen over two-thirds down to 99 575.

First quarter group revenue, including a partial contribution from the US and a full quarters contribution from Canada (which the company also exited towards the end of the period) was $32.7 million from $71.8 million. This included approximately $14 million in now lost US revenue.

The statement did not disclose how much of this was due to the now discontinued Canadian operations.

Operating income in the quarter was $4.5 million or 13.6 percent of revenue.

Initial analyst reaction has been pessimistic over Netellers prospects, despite still being active in Europe.

Which parts of Europe are they going to be active in? (It) has had the living daylights scared out of it by the USAO. It wont want to take any more risks.

The analyst added that the market was different in Europe where online gaming customers tended to have much more faith in the operators than did their equivalents in the US. There is a lot more trust.

 

[Mousey]

Cash balances after its recent $136 million settlement with the US DoJ are at $74.5 million.

That doesn't sound good.

 

[Swede]

Actual balace is quintuple that amount, liquid. And that, for comparisons sake, is just the yearly salary of the next highest paid CEO or GM or manager there. God bless them, each and everyone...

 

[EasyRhino]

That doesn't sound good.

Note that the cash balance figure doesn't include customer accounts. Actually, I don't know if the amount in customer accounts is even regularly disclosed in the financials.

 

[jetset]

Update

HOW ARE THE MIGHTY FALLEN (Update)

2006 Neteller numbers show how badly US troubles impacted the e-wallet

Whilst the weak Neteller Quarter 1 2007 numbers was the focus of attention of most analysts yesterday (Wednesday), it was the year prior to the clash with the US authorities that best served to illustrate how successful the company was before its US troubles began with the arrest of founders Lawrence and Lefebvre in the US in January this year.

Results for 2006 showed impressive gains across all business metrics, with the most significant achievements made in its global expansion. Revenue was up by 50 percent from 2005 to 2006, and the company's customer base grew more than 50 percent.

CEO Ron Martin commented: "The third quarter [2006] marked another milestone with the addition of our three millionth customer,"

He added that the active customer base was up by 29 percent to 640 701 active customers in 2006. That included 489 535 U.S. customers; 59 335 from Canada; 71 421 from Europe whilst Asia and the rest of the world contributed 20 410 to the active customer total.

The year 2007 is unlikely to match these statistics as a consquence of the e-wallet's expensive run-in with the US Department of Justice due to its popularity as a payment channel for US online gamblers. The company has withdrawn from the US, Canadian, Turkish and now Israeli markets and as a result could face a drop in income of between 70 and 75 percent.

Recognising the dangers, Neteller chairman Dale Johnson remarks: "In response to these significant challenges, the group is energetically implementing a strategy to restore its pre-eminence in providing money transfer services for the online gaming sector in selected markets outside of North American, through continued investment in product solutions and technology development."

Neteller's plan for rebuilding and bouncing back from the setbacks in the United States mainly involve expansion into other geographic areas through a number of market and user building initiatives.

By the end of 2006 the company had added 11 new countries, showed improved growth in Europe and Asia, and increased its non-North American active customers by 65 percent, so further improvements are clearly possible.

But the company will have to regain the respect and trust of customers at the player level, many of whom are disenchanted by the manner in which Neteller communicated and implemented decisions during its trials and tribulations with the US authorities. The resumption of full Neteller card services will be especially important in this regard.

Neteller stocks stumbled badly, dropping 113 points when it resumed trading on the AIM on Wednesday following a 6 month hiatus whilst the shares were suspended - the company's performance for the rest of the week will be the subject of close attention by analysts and investors alike.

CEO Martin still felt that the restoration of trade was a positive step for the company, viewing it as the start of a new chapter for Neteller following the resolution of its American hassles.

 

[Auditor]

APCW Neteller Interview - Find out when your getting your money!

We have an exclusive interview between J Todd with

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and Dan Star, the Executive Vice President or Sales and Marketing for The Neteller Group!

These questions will be answered:
When will I be able to request my money?
How do I request my money?
How long will it take to get my money?

You do not have permission to view link Log in or register now.

Register with APCW.org and Join the Fight!

 

[jetset]

Here's another question for Neteller

Why is Neteller not paying interest on the funds of US players held since January????

And why did they pull out of Canada?

 

[theAPCW]

It is my belief that NETeller pulled out of Canada because the political puppets running the show up there were manipulated by US Authorities. Basically, the current Canadian government will do whatever the Bush Boys want.

As far as interest on the NETeller money goes, I suppose that's an issue you would need to take up with the US Department of Justice. I'm just happy to be gtting the cash back instead od "seized as evidence".

 

[jetset]

Nevertheless, these are legitimate and valid questions that Neteller has not answered - and they are pertinent to those of us who use/used this "service" and would like to hear what the management rationale behind this remarkable decision might be.

Whilst you have their ear, it's a good opportunity to ask them, if only to watch the tap dancing that may or may not follow....

 

[lojo]

Great points, and thanks for the NLR update Jetset.

If memory and reason serves me, the the T&C say that accounts bear no interest. It would be a great gesture to offer it, but they are a little strapped right now. As for Canada there may be too many banking links with the states, and the border too porous and easy for we Yanks to open accounts there with a 'buddy'. But it would be good to hear them answer. I would guess though that J. Todd was able to land the iview by assuring a pre-arranged set of questions... is it too late to add some?

 

[jetset]

When Neteller wrote those T&Cs I doubt that anyone could have envisaged the world of trouble that they would face and the fact that US player funds would be tied up for six months.

I therefore don't buy into the T&C rationalisation, and I would venture to suggest that even in an Isle of Man ringfenced seperate account there was a tidy amount of interest accruing.

And we have yet to see a Neteller explanation for the precipitous exit from Canada.

So, yes - as you say "But it would be good to hear them answer."

 

[kengam]

Pay us our damn money already. I want my 70 grand and be rid of this whole ugly industry

 

[theAPCW]

Nevertheless, these are legitimate and valid questions that Neteller has not answered - and they are pertinent to those of us who use/used this "service" and would like to hear what the management rationale behind this remarkable decision might be.

Yes, all questions are valid.

I can certainly steer Mr. Starr this way and see if he would have an interest in a follow-up segment. NETeller is still walking a thin line for the moment... not as razor thin as a month ago, but certainly uncomfortably thin.

I still believe that NETeller felt they had no choice but to leave Canada... just like they left the US. I do not believe that they would have abandoned another lucrative market while in the very midst of already difficult financial times if they didn't honestly feel they absolutely had to.

 

[theAPCW]

=== Neither the APCW nor I have the authority to speak on behalf of NETeller =====

That said, in regard to the closure of operations in Canada:

"Our actions in Canada were in line with other payment processors and gaming operators who saw a change in that market at the same time as us."


In regard to the question of interest on the funds:

"...we are not regulated as an entity that is allowed to offer interest bearing accounts (e.g. not a bank), and so our member T&Cs don't allow it."

 

[jetset]

Pay us our damn money already. I want my 70 grand and be rid of this whole ugly industry

Part of the Neteller settlement with the DoJ is that payment of US players starts no later than 30 July....so Monday is the date that things should start rolling.

But with $94 million to repay to scores of thousands of US players it may take awhile. US players have been informed that they can access their accounts and put in their withdrawal orders right up to January 2008 (does that hint at how long this process could take? Maybe.)

Regarding interest and APCW's passed on comment above - I wonder how much interest accrued to Neteller from that supposedly seperate and ringfenced players account? I would bet quite a tidy sum, and not at the very least sharing it with players doesn't wash - if Neteller had the will there would, I am confident, be a way, and the IOM authorities would cooperate under these truly extraordinary circumstances that have so badly prejudiced US players.

However, I imagine that most will just be so relieved to get their dosh that they will be prepared to overlook the issue of interest on their frozen deposits.

 

[jetset]

Quote: "Our actions in Canada were in line with other payment processors and gaming operators who saw a change in that market at the same time as us." Unquote

That strikes me as flannel - what change? what other processors and operators?

There were none until Neteller pulled the Canadian plug without any apparent reason (unless it was behind-the-scenes pressure from the DoJ who were holding two of Neteller's major shareholders)

 

[sdaddy]

Regarding interest and APCW's passed on comment above - I wonder how much interest accrued to Neteller from that supposedly seperate and ringfenced players account? I would bet quite a tidy sum, and not at the very least sharing it with players doesn't wash - if Neteller had the will there would, I am confident, be a way, and the IOM authorities would cooperate under these truly extraordinary circumstances that have so badly prejudiced US players.

This may have to do with why Neteller is asking (but not requiring) U.S. members to sign a release before they request their frozen funds. It could be a way to shield them from future lawsuits related to the accrued interest.

Quote: "Our actions in Canada were in line with other payment processors and gaming operators who saw a change in that market at the same time as us." Unquote

That strikes me as flannel - what change? what other processors and operators?

Perhaps Neteller is alluding to Firepay's exit from the Canadian market last February.

 

[jetset]

Firepay exited after Neteller, as far as I can recall.

I think you're right about the release form - almost certainly a move to preempt any future class or individual actions on the interest or any other issues arising from the manner in which Neteller has treated players and (possibly) their privacy.

 

[jetset]

It's official - US payouts start today

Press release from Neteller out this morning (July 30)

Distribution Plan Implemented Today


Monday, 30 July 2007 NETELLER Plc (LSE: NLR), the independent global online payments business, today announced that US customers now have access to their accounts online to request the withdrawal of funds.

As described in the Company's announcement of 4 June 2007, under the Distribution Plan agreed to with the United States Attorney's Office for the Southern District of New York, US customers will be able to commence the process to achieve a return of their funds currently within their NETELLER e-wallets.

US customers will be able to access their NETELLER accounts online until 26 January 2008 and make a request for their funds. In accordance with NETELLERs Terms of Use, no interest on account balances will be paid.

NETELLER will not charge fees to customers to process requests for funds.

Funds will be distributed either by electronic transfer to the bank account on record with NETELLER or by a cheque to be sent to a mailing address as confirmed by the customer.

If a US customer has a bank account already registered with NETELLER, funds transfer will be by electronic transfer subject to confirmation by the customer that the registered bank account remains valid.

US customers will receive the entire balance of funds in their account; no requests for partial payments will be processed. US customers cannot use their accounts for any transaction other than to request the funds.

Further information is available on the Companys customer website, www.neteller.com, in particular the US customer update FAQs which are posted at updates.neteller.com.

"We are very pleased to start the funds distribution process today. I can assure our US customers it has been our highest priority and we'd like to thank them for their patience during this period", said Ron Martin, President and CEO. "The implementation of this plan marks another major step forward in the Company's recovery strategy".

 

[Wild Heart]

Withdraw Funds

I was able to log into Neteller today and request to withdraw the funds being held.

 

[lots0]

Here is the release Neteller requires you to sign before you can get your money from them....

Release

You and NETELLER Plc Group (each, a “Releasing Party”) mutually release, waive, and discharge each other (each, a “Released Party”) from any and all manner of actions, causes of action, suits, promises, damages, judgments, executions, claims, counterclaims, demands, and any other form of liability whatsoever, in law or equity, known or unknown, that the Releasing Party ever had, now has, or hereafter can, shall, or may have against the Released Party from the date You opened Your Account to the Effective Date with respect to Your request to receive funds under the Distribution Plan and Your Account.

The additional definitions below apply to this release:

“You” or “Your” refers to you and any of your assigns, heirs, executors, agents, or anyone else acting on your behalf or in your capacity.

“NETELLER Plc Group” means NETELLER plc and its predecessors, successors, present and former affiliated companies, subsidiaries, assigns, officers, directors, stockholders, employees, and agents.

“Your Account” means your online stored value account with the Neteller plc Group, or any of them, which holds electronic money.

“Distribution Plan” means the distribution plan announced by NETELLER Plc Group on 4 June 2007 pursuant to agreements with the United States Attorney’s Office for the Southern District of New York and Navigant Consulting, Inc.

“Effective Date” means the date on which You successfully withdraw funds from Your Account under the Distribution Plan.

I'll tell you one thing.... I'll NEVER use another 3rd party money transfer outfit like Neteller again.

 

[sdaddy]

Here is the release Neteller requires you to sign before you can get your money from them....

Actually, you are not required to sign it in order to request your money.

 

[jetset]

The movement on Neteller's share price since their resurrection last Friday has been interesting, with up to 13 point fluctuations up and down on the London AIM.

When trading closed yesterday (Monday) they were down some 13 points at 68 p - it's a long way from the price on 16 January this year when they suspended trading - it was around 176.00 back then!

 

[Philosopher]

Well what do you know. Requested my withdrawal from NLR yesterday and it hit my bank account this morning! Just north of 19k I've been waiting on since all this started!

Really didn't expect to see that money again so this is a very nice surprise.

 

[jetset]

That's good to know as an indication that the American payout project is working, Philosopher - many thanks!

 

[EasyRhino]

I also got my withdrawal on the next day. I know it was my money to start out with, but it still feels like I won a jackpot of a few thousand dollars.

 

[jetset]

Update

NETELLER CHIEF TELLS YOUTUBE USERS "WE'RE SORRY"

US players get frozen funds and an apology - at last

The Isle of Man based e-wallet Neteller started trying to repair the damage to trust that its 7 month run-in with US Department of Justice authorities caused by using the popular video streaming site Youtube.com this week to apologise to US customers.

A casually dressed Ron Martin, CEO of the company appeared in a videoed statement, recapping the events that caused his company to freeze US accounts for six months and exit the US market.

Martin revealed that he had been following blogs and other public opinion sites on the issue, and touched on the firm's weak communications with customers. This was unavoidable due to the sensitive nature of negotiations as his company battled its way through DoJ allegations before finally agreeing to pay a major $136 million penalty (see previous InfoPowa reports)

After reprising the key points in the plan for the return of US monies, Martin reiterated that payouts totalling some $94 million to hundreds of thousands of US players had started, and revealed that in the first day alone, $40 million had been despatched to US players. He apologised to those US customers who had been kept waiting so long, and thanked them for their patience.

The issue of interest, which Neteller has announced it will not be paying, was not addressed.

Martin stressed the importance of trust and acknowledged that the company will now have to work hard to regain the trust of its customers in the wake of the US debacle.

The question of how much private information on US players had been divulged to the US authorities - if any at all - was not addressed.

 

[lukins82]

NT is like PayPal....or it will be soon the same as PayPal.

 

[jetset]

Update

NETELLER RESURGENT

e-Wallet expanding eastward with Aussie deal

With its US market exit and the hassles with the American legal authorities now almost behind it, the Isle of Man e-wallet Neteller has gone up a gear in its international expansion strategy with the announcement this week of a new Asia-Pacific involvement.

Describing itself as an independent global online payments business, the AIM-listed company disclosed this week that it has recently completed the acquisition of a strategic stake in Centricom Pty Limited. The key points of the investment are:

* Centricom operates the POLi payment platform in Australia and New Zealand.

* Neteller will pay a total of AUD$ 5 million (approximately US$ 4 million) for a significant equity position in Centricom.

* The deal extends Neteller's expertise as a payments hub for its merchants initially in the Asia Pacific region.

* Centricom Pty Limited is an Australian company based in Melbourne that provides a range of web-based transaction services, including online payments, straight-through processing, reconciliation and advanced transaction integration solutions.

Under the terms of the agreement, Neteller has agreed to invest a sum of AUD$ 5 million in consideration of a minority stake holding in Centricom, on a fully diluted basis. As part of the investment, Neteller will appoint one director to the Centricom board.

Through an existing partnership, Neteller has already introduced the POLi service to its Australian customers back in January 2007 as a safe and convenient method of payment direct from their bank accounts. The POLi system allows customers to make payments online, from their existing internet banking service, without disclosing their bank or credit card details to the merchant.

Centricom is backed by a strong financial partner in the Melbourne-based Jagen Group. Jagen is an international investment group with interests across a broad range of industries in the United States, Europe and the Asia Pacific region, and it will continue to own the majority shareholding in Centricom following the Neteller investment, along with Centricom's directors and employees.

This investment furthers the Neteller Group's presence in the important and expanding Asia Pacific online payment market, says President and CEO Ron Martin.

We are pleased to cement our existing relationship with Centricom through this investment," Martin commented. "We look forward to working with Centricom to drive the business through its next phase of growth.

"Neteller will continue to seek out strategic relationships with companies such as Centricom who offer compelling products and services that enhance our innovative online payment solutions to our global customers and merchants.

Simon Warner, Managing Director of Centricom, said We welcome the investment from NETELLER as a milestone in our development which will enable us to roll out the POLi service to more merchants and build further consumer brand awareness. This partnership is further evidence that Centricom is serious about being the major provider of online payments in Australia, New Zealand and beyond.

Since its launch in October 2004, Centricom has been steadily building and refining its online payments business. The POLi service now operates in three countries; Australia, New Zealand and, with its partner ATM Solutions, South Africa.

 

[jetset]

Neteller update - latest statement

NETELLER Plc Pre-close Trading Update

Board confident 2007 results to meet market expectations building momentum into 2008

Friday, 11 January 2008 NETELLER Plc, the independent global online payments business, is pleased to provide a trading update in respect of its preliminary results for the year ended 31 December 2007, which the Company intends to release on Tuesday, 11 March 2008.

Trading update

The Board announces that the Groups operating businesses have traded in line with managements expectations in the fourth quarter and the Board is confident that the full year results for the Group will meet market expectations.

The Company will make the final payment of US$ 38.25 million on 16 January 2008 to the US authorities in respect of its obligations under the deferred prosecution agreement. This amount reflects recent discussions with US authorities confirming that US$ 57.7 million of the Groups funds were seized, as opposed to the US$ 60 million previously thought and announced. The total amount to be paid to the US authorities in connection with this matter remains the same as previously announced (US$ 136 million).

As part of the arrangements with the USAO, the Group implemented the Distribution Plan to return approximately US$ 94 million of funds owed to US customers. The Group has to date repaid approximately US$ 81 million of this amount. Any unpaid amounts are currently held in trust accounts with the Groups bank. Under the terms of the Distribution Plan, US customers have until 26 January 2008 to withdraw their funds using the NETELLER website.

The sale of the Groups principal Calgary property has been delayed as a result of the lenders for the intended purchaser introducing significantly less attractive terms in the wake of the recent developments in North American financial markets. Consequently, the final condition to the Purchase and Sale Agreement for the property has not been satisfied. Constructive discussions with the intended purchaser and its lenders are continuing but there can be no certainty that a transaction will be concluded. However, the Group is optimistic about achieving a sale in due course given the current strength of the Calgary property market.

The Group has also recently concluded a settlement with a third party vendor who had commenced litigation against the Group for alleged breach of contract (as previously disclosed in the Groups interim statement of 23 August 2007), paying an amount of approximately CAD$ 1.75 million to settle any potential claims.

Building Momentum into 2008

During 2008 the Group will deliver a significant number of initiatives in support of its strategic goal of providing innovative payment solutions for online communities

 

[sdaddy]

As part of the arrangements with the USAO, the Group implemented the Distribution Plan to return approximately US$ 94 million of funds owed to US customers. The Group has to date repaid approximately US$ 81 million of this amount. Any unpaid amounts are currently held in trust accounts with the Groups bank. Under the terms of the Distribution Plan, US customers have until 26 January 2008 to withdraw their funds using the NETELLER website.

I'm surprised that there are $13 million in US customer funds still unpaid. Can it be that there were that many customers who, for whatever reason, did not withdraw their funds?