BY TOM SOMACH

One of the two NETeller co-founders who were arrested by U.S. authorities earlier this year for facilitating illegal online gambling has pleaded guilty to conspiracy.

Stephen Eric Lawrence, 47, copped the plea in Federal Court in New York, telling the judge: “I came to understand that providing payment services to online gambling Web sites serving customers in the United States was wrong.”

He is to be sentenced in October, and faces up to five years in prison.

Until then, he is to remain free on $5 million bond.

In January, Federal prosecutors in the U.S. announced that two co-founders and former executives of NETeller had been arrested and charged with illegally funneling billions of dollars in gambling proceeds to overseas betting operations.

Charged were Lawrence and John David Lefbrve, 56, both of Canada.

Specifically, they were charged with money laundering and conspiring to transfer funds with the intent to promote illegal gambling, and faced up to 20 years in prison if convicted.

The company they began, British Isles-based NETeller (www.neteller.com), an Internet money tranferring service or so-called “e-wallet,” was used primarily by American gamblers, to send and receive funds to and from online poker sites and other online gambling sites based in other countries.

After the busts of Lawrence and Lebebvre, who are no longer with the company, NETeller banned customers from the U.S., and promptly lost most of its business.

In addition, U.S. authorities seized some $55 million in NETeller customer funds, in connection with the busts, although discussions are now ongoing about returning the monies to the customers.

After his court appearance, Lawrence refused to speak to the media.

His attorney, Peter Neiman, spoke for him, saying: “Mr. Lawrence is very glad to have this episode over and is looking forward to moving on to the next stage in his life.”

As for Lefebvre, he has pleaded not guilty to the charges and his case is still pending.

(E-mail Tom Somach at tomsomach@yahoo.com.)