NEW YORK–A pair of Canadians accused of laundering billions of dollars in illegal online gambling proceeds originating in the United States are expected to face a preliminary hearing in New York next month –the first step in determining whether to proceed with formal charges.
John Lefebvre and Stephen Lawrence, both co-founders and ex-directors of Isle of Man-based NETeller Plc, have each been released on $5-million US bond following their arrests last week –Lefebvre in Los Angeles and Lawrence in Virgin Islands.
If convicted, each faces a maximum sentence of 20 years in prison.
Lefebvre, 55, will have his bail terms reviewed when he appears in Manhattan Federal Court Wednesday. Lawrence, 46, who appeared in the same court Friday, saw his bail terms upheld. A judge gave him until Friday to come up with $1 million US still outstanding after he posted $2.5 million in cash and $1.5 million against a New York condominium.
While a federal judge in Los Angeles ordered Lefebvre not to leave that city except for making his Manhattan court appearance, Lawrence has been ordered not to leave New York before the end of February. Even then, he must not leave the continental United States, and must provide the court with contact information for each night he is away from New York.
Both men are accused of conspiring to promote illegal gambling by transferring billions of dollars of cyberspace bets placed by U.S. citizens with overseas gambling companies. Lefebvre, a University of Calgary law graduate and well-known philanthropist in the city, was arrested at his Malibu, Calif., beach house, but also owns a home on Saltspring Island in British Columbia.
Fellow former Calgarian Lawrence’s ties to the city date to the 1990s, when he worked as a principal with Cavendish Investing Ltd., a Calgary-based private venture capital firm.
NETeller allows users to transfer money to global companies for a fee.
The men are former directors of the company and knowingly broke the law, according to an FBI special agent based in New York.
“Public filings acknowledge that a large chunk of their business was derived from handling wagers from American customers,” James Margolin said last week.
“Under U.S. law, gambling is a very tightly regulated industry and the solicitation of American bettors by offshore companies is illegal.”
According to the company’s 2005 annual report, payment services were provided to more than 95 per cent of gaming merchants around the globe, amounting to roughly $7.3 billion in financial transactions.
In the first half of 2006, the company reported processing $5.1 billion in transactions.
“There is ample indication these defendants knew the American market for their services was illegal,” Michael Garcia, U.S. attorney for New York, wrote in the indictment.
“The U.S. is exerting its long arm in an effort to totally stamp out online gaming in their country, and in this case are pushing as hard as they can” Michael Lipton, a Toronto lawyer who specializes in gambling law, told CanWest News Service.
Source Vancouver Sun