Gambling News effective immediately: Neteller e-wallet has terminated its US facing operations

Yes, this is true. Neteller has stopped to process the financial transactions from US customers after the arrest of Neteller's founding fathers and their indictment on money laundering. FBI Special Agent Maryann Goldman says at least $148 million was transferred this way. Starting from January 18, Neteller announced the termination of all US oriented money transfers.

Starting from January 18, Neteller has ceased its US facing operations after the arrest of the company's founding fathers by the US legal authorities. 75% of the company's target audience and specifically this number is the share of US customers are not eligible for making any further deposits. They however will be able to access their accounts and withdraw the pending balances.

There are several reasons for this cancellation to take place. First, as listed on the site of Neteller, the company has chosen to terminate all US facing transactions due to the enforcement of the UIGEA (Unlawful Internet Gambling Enforcement Act) that was passed by US Congress early in October 2006. Neteller claims that this step will help to protect their current clients and shareholders without any harmful effect to take place.

According to the information provided on site, the update is effective immediately. Still, "All US members and non-US members will continue to be able to use their NETELLER e-wallet account for safe online transfers to and from non-gambling merchants, secure peer-to-peer transfers and NETELLER Card withdrawals at ATMs around the world."

Secondly, Neteller founders have been recently arrested to meet the court indictment of money laundering; they are accused of laundering billions of dollars through the acception of gambling transactions. U.S. Attorney Michael Garcia announced today  that "Stephen Eric Lawrence and John David Lefebvre knew when they took their company public that its activities, as well as those of the internet gambling companies it assisted, were illegal in the United States," Garcia said. "Blatant violations of U.S. law are not a mere 'risk' to be disclosed to prospective investors. Criminal prosecutions related to online gambling will be pursued even in cases where assets and defendants are positioned outside of the United States."

Considered to be one of the most convenient financial tools used to move private funds safely and swiftly on the net, Neteller was widely used by various customers primarily for the purpose of opening real money accounts at the so-called "gaming merchants" sites: online casinos, sportsbooks, poker rooms and betting exchange operators.

"The investigation into NETeller, which began in the summer of 2006, was led by FBI Special Agent Maryann Goldman. Goldman delved into both how NETeller processed payments and how it helped facilitate sports bets."

"The complaint unsealed Tuesday accuses NETeller of using a combination of payment and shell companies to process U.S. Automatic Clearinghouse transactions (ACH), thus hiding the nature of payments made to U.S. customers."

"In order to get money out of the U.S., NETeller would have a payment service company recieve funds on its behalf. Then the payment company would transfer money first to an account in either the name of JSL Systems Inc. or Carload Inc.?

"Both accounts, based in Alberta, are directly connected to NETeller, the complaint alleges."

"NETeller conceals the nature of these financial transactions," Goldman said. "The Payment Company receives funds in the United States on behalf of NETeller, and then transfers the funds out of the United States to accounts controlled by Neteller in Canada."

"Goldman says at least $148 million was transferred this way. And that both Lawrence and Lefebvre are partners in JSL Systems Inc."

The impact on the online gambling industry is expected to be found quite depressing for the gambling operators really soon. Companies such as Mansion.com and Interxgaing.com are already putting to question any further operations in the US gambling market since Neteller has undoubtedly been the most convenient payment processor and a big portion of the customers can go astray now.