Neteller Stock Exchange Statement
 

[ QUOTE ]
NETELLER Works to Return Funds to US Customers After US Withdrawal

NETELLER Plc (LSE: NLR), 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.

[/ QUOTE ]

Re: Neteller Stock Exchange Statement
 

One key revelation here seems to be that some funds were seized, but only that small minority of funds that were en route when the [censored] hit the fan.

Re: Neteller Stock Exchange Statement
 

Pretty much what I expected, Neteller's counsel is advising them to cooperate with the USAO <even though they have not been charged> and the USAO will determine if, when, and how the money ever gets back to US customers. And some of the money has already been "seized".

Re: Neteller Stock Exchange Statement
 

Its a shame it has taken so long for this information to be announced....

Maybe now some of the anger that has been directed at Neteller can be vented in the right direction...

Where would US customers prefer their money, in Neteller trust accounts or in the hands of the DOJ ??

Re: Neteller Stock Exchange Statement
 

There should be more anger directed at Neteller than ever. They have not been charged, they are out of the jurisdiction of the US.

This is outrageous!

Instead of standing up and saying, "We are a legal and licensed company
based in the UK/Isle of Man. If you want any of our records please take
it to one of our courts where we will fight you vigorously and only if we
lose and have exhausted our appeals will we turn over our records," they
rush over to the US Attorney's office to say "How can we help?"

Re: Neteller Stock Exchange Statement/Bet on Sports
 

This is essentially the same crap betonsports came out with. I still haven't seen a pound sterling or a US dollar out of my three grand I had on deposit.

Re: Neteller Stock Exchange Statement/Bet on Sports
 

Jay - Agreed, I think the anger should be twofold - Neteller needs to fight this, but the US govt needs its head snapped back too

Re: Neteller Stock Exchange Statement/Bet on Sports
 

They may be outwith the jurisdiction of the US but what would you have them do? Continue to process US withdrawals with all monies being seized??

Re: Neteller Stock Exchange Statement/Bet on Sports
 

Unbelievable!

addictontilt has is right, both Neteller and the US govt wackos need a spanking on this. What pisses me off personally is that I have moeny there that's never been associated with any poker site, now it's going to be held for "forensic" review???

Re: Neteller Stock Exchange Statement/Bet on Sports
 

The burden of proving that these are not "gambling funds" etc will be on neteller, the DOJ can seize assets at any time...FWIW it looks like Neteller is not going to fight it. They will just roll over, pay the fine, and move on.

Re: Neteller Stock Exchange Statement/Bet on Sports
 

It is not remotely surprising that Neteller is not fighting. As far as their priorities are concerned, Stockholders are at the top of the list, and customers are at the very bottom-- far below the interests of the board members and executives who wish to avoid jail time.

If neteller can preserve a viable non-US business and some value for their stockholders at the expense of forfeiting the U.S. customers money, I expect they will do it in a heartbeat.

The real question in all this is ho the DOJ or USAO is going to handle this.

I think there is a decent chance that they are mainly interested in the records, getting Neteller out for good, and do not want to see the vast majority of customers get screwed, BUT there are many many ways they could play this, and do not doubt that they are calling the shots.

Re: Neteller Stock Exchange Statement
 

[ QUOTE ]
This is essentially the same crap betonsports came out with. I still haven't seen a pound sterling or a US dollar out of my three grand I had on deposit.

[/ QUOTE ]Nothing like betonsports at all. They were a pretty shady operation in the first place, who took players money and run. Neteller are a FSA regulated PLC that has ring fenced funds, they couldnt inform their customers before informing the market, that is a legal requirement when it is sensitive information. If they had come out with a vaguie statement prior to this they would have been iun serious trouble with the LSE too.

I understand how bad it must be for you guys who are stuck for cash in Neteller, but get the target of your ire right for god's sake.

Re: Neteller Stock Exchange Statement/Bet on Sports
 

The truth is that the DOJ has not seized these funds. Neteller is voluntarily holding these funds because the DOJ obtained a US federal warrant seizing them. But the warrant cannot be enforced in the Isle of Man. So Neteller has decided to hold the funds and cooperate with the DOJ to get the best deal for it and its founders. So its former US customers suffer and its shareholders see the value of their shares disappear.
Mr. Cohen is right. Neteller should have and could have fought the DOJ. It could have returned the money owed to its US customers despite this seizure warrant.

Re: Neteller Stock Exchange Statement/Bet on Sports
 

[ QUOTE ]
The truth is that the DOJ has not seized these funds. Neteller is voluntarily holding these funds because the DOJ obtained a US federal warrant seizing them.

[/ QUOTE ]

Hi, can you provide a source or reference for this info?

Many Thanks.

Re: Neteller Stock Exchange Statement/Bet on Sports
 

Read the statement. It does not state that the DOJ physically seized these funds and put them in a bank account held by the DOJ. It states that a federal court ordered the seizure of these funds. Then it states that Neteller is cooperating with the order. It could be that Neteller has turned over these funds to the DOJ but the statement does not state that such a transfer occurred.
It really doesn't matter. What matters is that the funds are being held hostage over the negotiations between Neteller and the DOJ.

Re: Neteller Stock Exchange Statement/Bet on Sports
 

[ QUOTE ]
The truth is that the DOJ has not seized these funds. Neteller is voluntarily holding these funds because the DOJ obtained a US federal warrant seizing them. But the warrant cannot be enforced in the Isle of Man. So Neteller has decided to hold the funds and cooperate with the DOJ to get the best deal for it and its founders. So its former US customers suffer and its shareholders see the value of their shares disappear.
Mr. Cohen is right. Neteller should have and could have fought the DOJ. It could have returned the money owed to its US customers despite this seizure warrant.

[/ QUOTE ]

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

Ummmm this article says they got 55 mil, anyone who thinks they issued a warrant and did not seize whatever they could on US soil...is naive. Law enforcement fattens their coffers through asset seizure every day, local, state, and federal level.

Re: Neteller Stock Exchange Statement/Bet on Sports
 

[ QUOTE ]
The truth is that the DOJ has not seized these funds. Neteller is voluntarily holding these funds because the DOJ obtained a US federal warrant seizing them. But the warrant cannot be enforced in the Isle of Man. So Neteller has decided to hold the funds and cooperate with the DOJ to get the best deal for it and its founders. So its former US customers suffer and its shareholders see the value of their shares disappear.
Mr. Cohen is right. Neteller should have and could have fought the DOJ. It could have returned the money owed to its US customers despite this seizure warrant.

[/ QUOTE ]

I don't believe that to be true for a second - If you read the statement carefully it says
[ QUOTE ]
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.

[/ QUOTE ]
They are saying that they think about $55mil of customers' is floating around somewhere in the banking system - the funds that were in the process of being transferred as the AO pulled the plug, that 55mil is not in any kind of secure trust.

Re: Neteller Stock Exchange Statement/Bet on Sports
 

"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."

Doesn't the fact that funds were in the process of being transferred imply that the money is not currently held by neteller?

I think it does matter. If the funds were seized when outwith Neteller's control then they had very few options. If Neteller are holding them voluntarily then they could and should put up a fight...

Re: Neteller Stock Exchange Statement
 

This thread is misguided. The 55 mil is small peanuts compared to the audits which are coming. Shades of PayPal as predicted back in September by the rare few. Ed Miller has posted an article on this today as well, and I think he is 100% correct.

TT [img]/images/graemlins/club.gif[/img]

Re: Neteller Stock Exchange Statement
 

[ QUOTE ]
There should be more anger directed at Neteller than ever. They have not been charged, they are out of the jurisdiction of the US.

[/ QUOTE ]

The EFTs are not.

Re: Neteller Stock Exchange Statement
 

Has anyone contacted the USAO yet?

http://www.usdoj.gov/usao/nys/

Re: Neteller Stock Exchange Statement
 

I'd say you've got about a 5% of seeing some money back around 2012.

In the mean time, lube up for the IRS [img]/images/graemlins/laugh.gif[/img]

Re: Neteller Stock Exchange Statement
 

[ QUOTE ]
I'd say you've got about a 5% of seeing some money back around 2012.

In the mean time, lube up for the IRS [img]/images/graemlins/laugh.gif[/img]

[/ QUOTE ]

Any online drugstore sites that accept neteller funds for those of us, that did not get seized?
[img]/images/graemlins/grin.gif[/img]

Re: Neteller Stock Exchange Statement
 

[ QUOTE ]
[ QUOTE ]
I'd say you've got about a 5% of seeing some money back around 2012.

In the mean time, lube up for the IRS [img]/images/graemlins/laugh.gif[/img]

[/ QUOTE ]

Any online drugstore sites that accept neteller funds for those of us, that did not get seized?
[img]/images/graemlins/grin.gif[/img]

[/ QUOTE ]

NH [img]/images/graemlins/laugh.gif[/img]

Re: Neteller Stock Exchange Statement
 

[ QUOTE ]
This thread is misguided. The 55 mil is small peanuts compared to the audits which are coming. Shades of PayPal as predicted back in September by the rare few. Ed Miller has posted an article on this today as well, and I think he is 100% correct.

TT [img]/images/graemlins/club.gif[/img]

[/ QUOTE ]

Any historical documents out there about what happened re Paypal and audits?

Re: Neteller Stock Exchange Statement
 

[ QUOTE ]
[ QUOTE ]
This thread is misguided. The 55 mil is small peanuts compared to the audits which are coming. Shades of PayPal as predicted back in September by the rare few. Ed Miller has posted an article on this today as well, and I think he is 100% correct.

TT [img]/images/graemlins/club.gif[/img]

[/ QUOTE ]

Any historical documents out there about what happened re Paypal and audits?

[/ QUOTE ]

My cousin was audited for selling Beenie Babies - I will ask. If you reported your income correctly then its not a big deal. If not.... welcome to hell.

TT [img]/images/graemlins/club.gif[/img]

Re: Neteller Stock Exchange Statement
 

heh heh, thank GAWD I was one of the fish you sharks preyed upon....

Dammit I was getting better though...[img]/images/graemlins/grin.gif[/img]

Re: Neteller Stock Exchange Statement
 

My point is that the statement does not state that a federal court has custody and control of this $55 million. Why does it imply it, but not state it? If Neteller does not control this $55 million, then I would think that they would expressly say so.
Thus, I think that Neteller still has custody and control of these funds despite the statement's implication. Seems to be over a small sum anyway.

Re: Neteller Stock Exchange Statement
 

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
This thread is misguided. The 55 mil is small peanuts compared to the audits which are coming. Shades of PayPal as predicted back in September by the rare few. Ed Miller has posted an article on this today as well, and I think he is 100% correct.

TT [img]/images/graemlins/club.gif[/img]

[/ QUOTE ]

Any historical documents out there about what happened re Paypal and audits?

[/ QUOTE ]

My cousin was audited for selling Beenie Babies - I will ask. If you reported your income correctly then its not a big deal. If not.... welcome to hell.

TT [img]/images/graemlins/club.gif[/img]

[/ QUOTE ]

And did he report his income correctly? Curious what the end result was.

Re: Neteller Stock Exchange Statement
 

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
This thread is misguided. The 55 mil is small peanuts compared to the audits which are coming. Shades of PayPal as predicted back in September by the rare few. Ed Miller has posted an article on this today as well, and I think he is 100% correct.

TT [img]/images/graemlins/club.gif[/img]

[/ QUOTE ]

Any historical documents out there about what happened re Paypal and audits?

[/ QUOTE ]

My cousin was audited for selling Beenie Babies - I will ask. If you reported your income correctly then its not a big deal. If not.... welcome to hell.

TT [img]/images/graemlins/club.gif[/img]

[/ QUOTE ]

And did he report his income correctly? Curious what the end result was.

[/ QUOTE ]

I think so, but she was audited. I recall it being a minor problem. More headache than anything else.

TT [img]/images/graemlins/club.gif[/img]

Re: Neteller Stock Exchange Statement
 

[ QUOTE ]
heh heh, thank GAWD I was one of the fish you sharks preyed upon....

Dammit I was getting better though...[img]/images/graemlins/grin.gif[/img]

[/ QUOTE ]

Even if you lost money you still need to report it to the IRS. The IRS views each session (quantified as each table as per Russ Fox) as a separate profit or loss. You do understand how that works right?

TT [img]/images/graemlins/club.gif[/img]

Re: Neteller Stock Exchange Statement
 

[ QUOTE ]
My point is that the statement does not state that a federal court has custody and control of this $55 million. Why does it imply it, but not state it? If Neteller does not control this $55 million, then I would think that they would expressly say so.
Thus, I think that Neteller still has custody and control of these funds despite the statement's implication. Seems to be over a small sum anyway.

[/ QUOTE ]
I read it differently, that Neteller lost control of the 55 mill (its probably frozen during the EFT process, hence why most of us cannot cancel our EFTs). But I also assume that the remaining funds are frozen by Neteller itself as part of the negotiation process with the USAO/FBI/and eventually IRS.

TT [img]/images/graemlins/club.gif[/img]

Re: Neteller Stock Exchange Statement
 

My cpa seems to

[img]/images/graemlins/confused.gif[/img], meh if I get audited he's on the hook too

Re: Neteller Stock Exchange Statement
 

[ QUOTE ]
[ QUOTE ]
heh heh, thank GAWD I was one of the fish you sharks preyed upon....

Dammit I was getting better though...[img]/images/graemlins/grin.gif[/img]

[/ QUOTE ]

Even if you lost money you still need to report it to the IRS. The IRS views each session (quantified as each table as per Russ Fox) as a separate profit or loss. You do understand how that works right?

TT [img]/images/graemlins/club.gif[/img]

[/ QUOTE ]

Losing poker players "need" to report table-by-session results to the IRS like I "need" to make sure I don't go 56mph on a road with a 55mph speed limit. Seriously, it's tough to take you or Miller or Fox seriously when you post crap like this.

Re: Neteller Stock Exchange Statement
 

Although I'm very gloomy about the online poker situation overall, I think there's some overreaction to this particular piece of news. I think the USAO is smarter than it's being given credit for, and is really more interested in sort of cutting off the supply than getting into the legal and public relations quagmire of auditing or confiscating the funds of a lot individual players. When Neteller left the US market immediately and left the online gambling industry in a very difficult spot, about 95% of their goal was accomplished.

But basically, both sides have an interest in seeing that players get their money back. The USAO wants that money back in the United States and it wants Uncle Sam to be able to collect taxes on it. To some extent, you could also argue that their actions are designed to "protect" American consumers from the evils of online gambling, rather than to punish them. Neteller wants US citizens to get their money back because they're not going to be able to keep it in their coffers anyway, and they'd rather not tarnish their reputation as they re-focus on the reasonably viable European market.

Re: Neteller Stock Exchange Statement
 

[ QUOTE ]

Losing poker players "need" to report table-by-session results to the IRS like I "need" to make sure I don't go 56mph on a road with a 55mph speed limit. Seriously, it's tough to take you or Miller or Fox seriously when you post crap like this.

[/ QUOTE ]

Thank you, great post.

Re: Neteller Stock Exchange Statement
 

The most shocking thing to me is that only $55 million is being held. I would have thought a lot more.

Re: Neteller Stock Exchange Statement
 

JC is correct.

This statement is confusing on purpose. Less than 55 million? It could be 100k.

One thing that needs to be considered is that the current Directors of Neteller don't want to be indicted as well, so they will co-operate fully. They don't want to go to jail, but they want to keep their paychecks from running the company.

Pretty obvious they don't have much incentive to pay back the players and much incentive to co-operate fully.

Unless ordered to do so (which never happened in the BOS case), I cannot foresee any possible conclusion to this whereby Neteller pays anyone.

It would be interesting to see what happens if they were ordered by a federal judge to pay people. We could see just how well intended and dedicated these people are to paying everyone their money.

Re: Neteller Stock Exchange Statement
 

[ QUOTE ]
JC is correct.

This statement is confusing on purpose. Less than 55 million? It could be 100k.

One thing that needs to be considered is that the current Directors of Neteller don't want to be indicted as well, so they will co-operate fully. They don't want to go to jail, but they want to keep their paychecks from running the company.

Pretty obvious they don't have much incentive to pay back the players and much incentive to co-operate fully.

Unless ordered to do so (which never happened in the BOS case), I cannot foresee any possible conclusion to this whereby Neteller pays anyone.

It would be interesting to see what happens if they were ordered by a federal judge to pay people. We could see just how well intended and dedicated these people are to paying everyone their money.

[/ QUOTE ]

You're assuming that the government doesn't want people to get their money back. I think quite the opposite is true.

Re: Neteller Stock Exchange Statement
 

[ QUOTE ]
The most shocking thing to me is that only $55 million is being held. I would have thought a lot more.

[/ QUOTE ]

The shocking thing is that they aren't reporting it's the EFTs, not all funds.