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Debate swirls around latest newspaper reports of FBI offshore activities against Neteller
The Guardian newspaper in the United Kingdom started a round of speculation this week by reporting that the FBI has frozen accounts held by U.S. customers at the Isle of Man reistered e-wallet Neteller. The company had already stopped allowing U.S. customers to make transactions with online gambling companies, and now the accounts are apparently frozen as evidence.
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The frozen accounts are part of the U.S. Department of Justice's allegations against Netellers two founders, Stephen Lawrence and John Lefebvre.
The two men were arrested last month and charged with conspiring to transfer funds with the intent to promote illegal gambling.
Not long after the arrests, Neteller announced that it would no longer allow U.S. customers to use their accounts for online gambling. At the time, customers still had access to their funds.
Initially Neteller had announced to the stock exchange that "the funds of U.S. resident customers are held in segregated trust accounts and are fully secure and will be available for withdrawal by customers on demand."
Now the web site for the company is advising customers that all withdrawals have been blocked and the funds are being maintained in trust on the customers' behalf while Neteller works to resolve the issues.
Neteller has not disclosed how much money has been frozen and has refused to disclose or confirm any details of the freeze, as has a spokesperson from the Department of Justice.
In an interesting sidebar to the Neteller story, industry analysts have pointed out that while Lawrence and Lefebvre prepare for trial, a competitor to Neteller has a parent publicly listed in the United States and goes untouched.
Neteller shares remain suspended in the UK, but Optimal Group Inc. still trades in the States on the NASDAQ exchange. Optimal is the full owner of the FireOne (FirePay) e-wallet business which was a pure competitor to Neteller, and therefore likewise a part of what the US government is calling a "massive criminal enterprise".
The double standard of Neteller founders being charged with crimes that allegedly occurred before the passing of the UIGEA, whilst the similar operations of companies like Firepay are apparently ignored has not gone unnoticed. One industry analyst observed: "FirePay was processing the same tranactions then, including those for sports gaming sites. It's parent trades in the US and they appear to have had US operations. You have to ask yourself: 'Is the US about to come down on these guys just like Neteller? Or is Neteller being singled out for special treatment?"
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