Oh Dear God - $55 Million Neteller Funds Gone

loosecannon

just on card player now

http://www.cardplayer.com/poker_news/article/8271

what do you all think this means for Neteller long term? it says down the bottom of the article that it doesn't affect non-US players but do you think that is true?



U.S. Seizes $55 Million of NETELLER Funds
Company Is in Negotiations with Attorney's Office to Return Money to Players in U.S.

Online poker players who have not yet received their money from NETELLER can blame the U.S. Government.

Through a statement to its investors, NETELLER said Thursday that about $55 million was seized by the U.S. Attorney’s Office (USAO) after two of its founders and former board members were arrested and charged with money laundering on Jan. 16.

Most of the money was in route to U.S. customers. NETELLER also warned that U.S. customers will not be able to withdraw any money from their NETELLER accounts at this time, although the company is working to change this.
"The return of funds to our US customers is a top priority for NETELLER,” said Ron Martin, NETELLER's President and CEO.

The following statement was taken directly from the Thursday’s announcement, which is published in its entirety below: “U.S. customers wishing to withdraw funds from their NETELLER e-wallet accounts will experience ongoing delays while these discussions continue, and a further update will be provided by the Group once effective repayment mechanisms are determined.”

NETELLER’s legal advisors recently sat down with folks from the USAO for the Southern District of New York and pledged full cooperation with the government’s investigation. NETELLER agreed to hand over requested documents concerning this investigation, with the possibility that a forensic accounting firm will be hired – at NETELLER’s expense – to assist the USAO in this investigation.

At this meeting, company representatives also began negotiations with the USAO to allow it to return funds to U.S. customers. NETELLER has enough cash on hand to fund all its customer’s accounts and remain in business.

A forensic accounting firm is often used to translate financial movements to investigators in cases like these. They are often used by public institutions such as schools to track missing money, and by investigators to help follow money and transactions by studying reams of paperwork that accounting departments generate.

As far as the company knows, no additional charges have been made against current employees, although the group cannot guarantee that charges won't be levied. The two men that were arrested and charged in January, Stephen Lawrence and John Lefebvre, founded the company and were two of its largest shareholders, but held no positions with the firm.

The entire statement is published below:

NETELLER Plc, the leading global independent online money transfer business, today issued the following update with regard to its US business and criminal charges against two of its founders.

On 19 January 2007, at the request of the Group, the Group’s legal advisers met with representatives of the United States Attorney’s Office for the Southern District of New York (“USAO”) to clarify the Group’s position with respect to the complaints brought on 16 January 2007 against two of the Group’s founders, Mr. Stephen Lawrence and Mr. John Lefebvre. Neither are current employees or directors of NETELLER. In that meeting, the Group 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 US customers.

The discussions between the Group’s legal advisers and the USAO are ongoing. The Group is, under advice of its legal advisers, commencing production of documents and intends to cooperate with the USAO in its investigation.

Following upon the complaints dated 16 January 2007, banks in the US began declining to permit transactions involving the Group through accounts maintained at one or more automated clearinghouses in the United States. Additionally, the Group has been advised that the USAO has obtained court-ordered seizure warrants seizing funds pertaining to the Group’s transactions. To the best of the Group’s knowledge, it believes that the amount of funds seized by the USAO or otherwise restricted by third parties does not exceed US$ 55 million. These funds were largely in the process of being transferred from the Group to its US customers or vice versa.

As a result of the restrictions placed by third parties, court-ordered seizures, and related legal concerns, the Group is currently unable to make payments to US customers. Nevertheless, the Group is in discussions with the USAO to manage an orderly return of funds to US customers. As part of these discussions, it is contemplated that the USAO will engage a forensic accounting firm, at the Group’s expense, to assist in this process and to examine the Group’s financial position. “The return of funds to our US customers is a top priority for NETELLER” said Ron Martin, Group President and CEO. US customers wishing to withdraw funds from their NETELLER e-wallet accounts will experience ongoing delays while these discussions continue, and a further update will be provided by the Group once effective repayment mechanisms are determined.

To the Group’s knowledge, no criminal action or proceeding has been brought against the Group, its current officers or directors by the USAO. Nevertheless, there can be no assurance that the Group will not be charged in a criminal action at some subsequent time. The Group intends to work with the USAO to seek a negotiated resolution of any allegations relating to its US activities. Any resolution of this matter may lead to potential sanctions against the Group including material financial penalties, fines and forfeitures.

It is emphasized that in line with the Group’s standard business practices for all customers, funds held by the Group for US customers are held in segregated trust accounts. The Group’s own cash position remains strong and the Group currently has sufficient working capital to fund all its customers’ balances as well as ongoing requirements of the business.

NETELLER remains committed to developing its business in line with its stated strategic objectives including geographical and product diversification for all markets. The Group will focus on its continuing business and the opportunities available in the growing markets of Europe, Asia and the Americas outside of the United States. Since the Group’s withdrawal from the US market on 18 January 2007, average daily new account sign-ups of new customers from non-US markets has been around 1,400. This compares to average daily sign ups of 3,303 for the year to 31 December 2006.

Daily fee revenue since 18 January 2007 has averaged over US$ 200,000 per day (excluding any revenues from Netbanx, 1-Pay and interest income). These metrics demonstrate the resilience of the Group's ongoing business. NETELLER customers not resident in the US continue to be minimally affected by this withdrawal from the US market.

In view of the continuing uncertainty, the Group's shares will continue to be suspended from trading on AIM for the time being. Further announcements will be made as appropriate.

fixer

$200k per DAY in fees revenue...easy money!

RoundTower

my NETeller account was just put "on hold" due to "recent transaction activity". They want me to send in ID and a utility bill (both of which they already have on file) to prove my identity. The account is USD denominated but registered to me here in Dublin.

While I tend to believe everything will be all right with NETeller, and keep saying so, the timing is enough to make anyone worried.

I didn't have a huge amount in there, and I have an idea what they might consider suspicious activity. But I'm still curious, is this happening to anyone else?

Imposter

I had a withdrawal from VC declined the day before yesterday. Neteller blamed VC and the money arrived in NT today. Not sure if it's related to these seizures but it's making me think twice about leaving money lying in NT.

ionapaul

Does anyone know if any money resting in your Neteller account is insured? Most high street bank accounts are insured as far as I can tell, both in Europe and the US. If Neteller doesn't offer / isn't covered by a similar protective measure, I reckon your money is as safe (or safer!) sitting in a Pokerstars or Paddy Power account than your Neteller account.

Mr. Flibble

If there are problems cashing out for us would it be an option to transfer all neteller money to a poker account and have them send you the money? Will poker accounts (PS/VC) generally do this, cahsout to a different method that you used to cashin with?

DeadParrot

Mr. Flibble wrote:

If there are problems cashing out for us would it be an option to transfer all neteller money to a poker account and have them send you the money? Will poker accounts (PS/VC) generally do this, cahsout to a different method that you used to cashin with?

yeah you can get a cheque sent out from PS/PPP

shrapnel222

Mr. Flibble wrote:

If there are problems cashing out for us would it be an option to transfer all neteller money to a poker account and have them send you the money? Will poker accounts (PS/VC) generally do this, cahsout to a different method that you used to cashin with?

i did this the other day, and all i had to do was put a small deposit with the new method you want to use- credit card, neteller, etc...- and then you can cash out any amount in the same way. (this was on hollywood poker, but i can't imagine it being any different elsewhere)

Mr. Flibble

DeadParrot wrote:

yeah you can get a cheque sent out from PS/PPP

I might do that. I much prefer leaving the roll online though or else I start thinking of it as real money and fear the stakes:(

Jesus Wept

The U.S Gov should really be put down, they are a bunch of nazis



.....I bet the feds are on the way to my house now... :eek: