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Friday, February 9th, 2007

Neteller Comes Clean, Admits U.S. Seized Funds


In its first public comments directly related to the controversy, NETeller has admitted that monies in the NETeller accounts of U.S. clients have been frozen by the U.S. government.

In a press release posted on its website,, the U.K.-based, Internet money-transferring service said a court-ordered warrant has frozen some $55 million in U.S. customer funds in connection with the arrest last month of NETeller’s founders.

The company is working with U.S. officials to get the money returned, NETeller said.

Last month, the U.S. Attorney’s Office arrested NETeller’s founders and charged them with using NETeller to facilitate money laundering and illegal online gambling.

After the bust, NETeller banned U.S. customers from using the service for gambling transactions.

Then U.S. customers’ accounts were frozen, meaning they couldn’t withdraw their funds, and panic ensued as some U.S. customers feared they’d never see their monies again.

Most U.S. customers used NETeller solely for Internet gambling, and some have cash amounts in the high six figures now tied up.

Until now, NETeller had remained cryptic on the issue, saying simply that the frozen funds would be released soon.

But after a spokesman for the U.S. Federal Bureau of Investigation (FBI) told the American newspaper USA Today last week that the U.S. government had seized NETeller funds in connection with the bust, NETeller was forced to respond publicly.

The NETeller press release, in part, states: “On 19 January 2007…(NETeller’s) legal advisers met with representatives of the United States Attorney’s Office (USAO) for the Southern District of New York to clarify (NETeller’s) position with respect to the complaints brought on 16 January 2007 against two of (NETeller’s) founders, Mr. Stephen Lawrence and Mr. John Lefebvre. Neither are current employees or directors of NETeller.

“In that meeting, (NETeller) pledged to cooperate with the USAO, indicated it was prepared to begin document production promptly and discussed a potential mechanism for arranging an orderly repayment of funds to U.S. customers. The discussions…are ongoing (and NETeller) intends to cooperate with the USAO in its investigation.”

The press release continues: “Following upon the complaints dated 16 January 2007, banks in the U.S. began declining to permit transactions involving (NETeller) through accounts maintained at one or more automated clearinghouses in the U.S.

“Additionally, (NETeller) has been advised that the USAO has obtained court-ordered seizure warrants seizing funds pertaining to (NETeller) transactions…the amount of funds seized by the USAO or otherwise restricted by third parties does not exceed U.S. $55 million. These funds were largely in the process of being transferred from (NETeller) to its U.S. customers or vice-versa.

“As a result of the restrictions placed by third parties, court-ordered seizures and related legal concerns, (NETeller) is currently unable to make payments to U.S. customers (but) is in discussions with the USAO to manage an orderly return of funds to U.S. customers. As part of these discussions, it is contemplated that the USAO will engage a forensic accounting firm, at (NETeller’s) expense, to assist in this process…”

The NETeller press release can also be read in its entirety by clicking directly on

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