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Poker News | Gambling and the Law

Neteller Founders Plead Guilty

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This week we watched as the Main Event of the World Series of Poker began at the Rio in Las Vegas. While 6,000+ players were slinging chips across the felt, the second of two men who helped many of them get there, John David Lefebvre, entered a guilty plea to federal racketeering charges. Lefebvre's guilty plea came about two weeks after his co-founder in the online payment processor Neteller, Stephen Lawrence, entered a guilty plea of his own.

According to wisegeek.com, "Racketeering is the act of operating an illegal business or scheme in order to make a profit, perpetrated by a structured group. It is a broad category of criminal acts that includes bribery, sexual exploitation of children, and illegal gambling, among many others. Racketeering is closely associated with organized crime, since both are conducted by groups."

By entering their guilty pleas, Lawrence and Lefebvre admit that operating a business outside of the United States that transferred money to online gambling sites was illegal. Lawrence said as much in his prepared statement to the trial judge, "I came to understand that providing payment services to online gambling Web sites serving customers in the United States was wrong," he said.

The right or wrong of what Neteller did and what other payment processors continue to do is a matter for moralists, not writers. What is fact is that prosecutors were able charge Lawrence and Lefebvre with violating decades-old acts prohibiting the use of electronic wires to send or receive information that facilitates illegal gambling. Since gambling is illegal in some of the states that Neteller processed payments from, this gave the US Department of Justice the loophole they needed to arrest the two businessmen.

Much has been made of the fact that Neteller was based in the Isle of Man, and therefore should or shouldn't be outside US jurisdiction. All that furor became irrelevant when both men pled guilty and chose to get on with their lives instead of spending years fighting a long legal battle.

As part of their plea agreements, both men agreed to cooperate with DOJ investigators, to testify if necessary in upcoming legal proceedings, and to be partly responsible for the $100 million the government is seeking in restitution. This agreement by these two businessmen sounds like the US government has more in mind than just the shutdown of Neteller as a payment processor; it sounds a lot like more arrests are coming.

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