Online purge sees NETeller chiefs arrested in US

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The Independent Online

Shares in NETeller, an online payment processing business, were suspended yesterday after its two founders were arrested and charged with laundering billions of dollars in gaming proceeds in the US.

Stephen Lawrence, the company's former chairman, and John Lefebvre, the former group president, were arrested on Monday. Mr Lawrence, 46, was detained in New York while Mr Lefebvre, 55, was held in Los Angeles.

The FBI's assistant director Mark Mershon said that the multibillion-dollar online gambling industry was "a colossal criminal enterprise masquerading as legitimate business."

The AIM-listed company, which provides e-wallets for online gamblers, has continued to do business in the US, despite the country's crackdown on internet gaming. Most companies pulled out of the US last year but as NETeller is not directly involved in gambling it was thought to be safe. Some 90 per cent of its business is with US customers.

"Blatant violations of US law are not a mere 'risk' to be disclosed to prospective investors," the prosecuting US attorney Michael Garcia said. "Criminal prosecutions related to online gambling will be pursued even in cases where assets and defendants are positioned outside of the US."

NETeller said the two men, who are both Canadian, are no longer involved in the company other than as shareholders, with stakes of 5.9 per cent and 5.5 per cent respectively.

The company asked for its shares to suspended in London yesterday pending clarification of the situation in the US, before the charges were unsealed later last night.

Shares across the sector slipped yesterday but analysts said this could be a time to buy companies that haveclosed their US operations. Shares in NETeller, which has more than 3 million customers and $7bn in annual transactions, fell 79 per cent last year.

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