US-based online gamblers are suffering delays in getting their money from Neteller plc, the Isle of Man-based online money transfer business, following news that the company has had significant sums of money seized by the US Attorney's Office.
Neteller plc has issued a statement advising that certain of its funds have been seized by the USAO. Amongst its comments Neteller plc stated:
"….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."
"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."
Ron Martin, Group President and CEO of Neteller plc said:
"The return of funds to our US customers is a top priority for Neteller"
The Neteller statement comes while the group's quoted shares remain suspended on the London Stock Exchange AIM market following the arrest of two of the founding ex-directors of Neteller last month on various charges of money-laundering and similar complaints.
In this regard, Neteller plc also stated:
"….On 19th 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 to clarify the Group's position with respect to the complaints brought on 16th 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."
"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."
From an investor's viewpoint, the nervousness must also go on, as Neteller commented:
"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."
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