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NETELLER Announces Settlement of US Situation

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  • NETELLER Announces Settlement of US Situation

    Wednesday, 18 July 2007 - NETELLER Plc (LSE: NLR), the independent global online payments business, today announces that the Company has entered into a Deferred Prosecution Agreement (“DPA”) with the United States Attorney's Office for the Southern District of New York (“USAO”). The DPA represents the resolution of the USAO’s investigation into the Company.

    Pursuant to the DPA, the Company has consented to the filing of a criminal information relating to transactions between Internet gambling merchants and persons located in the United States. The USAO has agreed to defer the prosecution of any federal charges and, as a consequence, the Company will not be convicted of any federal crime, as long the Company fulfils the set conditions of the DPA during the two year term of the agreement. At the conclusion of the two year term, the criminal information will be dismissed. The key terms of the DPA are set out in more detail later in this announcement. The United States District Court for the Southern District of New York has approved the deferral of the prosecution. As part of the DPA, the Company has also agreed to forfeit US$ 136 million to the United States. This amount includes the approximately US$ 60 million that the USAO has previously seized.

    Additionally the Company announces:

    Following this resolution, the Company will seek to publish its audited annual accounts for 2006 and have its shares restored to trading on AIM as soon as practicable thereafter.

    The Company is using its best efforts to allow withdrawal requests as soon as possible and US customers will be able to sign in to their NETELLER account to request the withdrawal of their funds by no later than 30 July 2007. The exact date upon which US customers will be able to make requests will be communicated to US customers via email and through our website.
    Ron Martin, President & CEO, said “This agreement resolves the USAO’s investigation relating to the Company’s former US business activities. We believe that this settlement is in the best interests of NETELLER and its shareholders."

    “Our customers, employees and shareholders have all patiently waited for this resolution. We anticipate within the next few weeks that we will have fully implemented the plan for the return of funds to our US customers and are hopeful that, by that time, we will have restored the Company’s shares to trading on AIM. We can now begin to refocus our efforts on building and strengthening the NETELLER business in the growing markets of the European and Asia Pacific regions. I look forward to sharing further information about the Company’s progress over the coming months.”

    Key terms of the Deferred Prosecution Agreement
    The settlement takes the form of a two year DPA with the USAO. In the DPA, NETELLER has consented to the filing with the United States District Court for the Southern District of New York of a criminal information charging NETELLER with participating in a conspiracy in violation of certain US laws. If NETELLER fulfils its obligations under the DPA, the criminal information will be dismissed, following the two year term.

    Specifically, the DPA contains the following main points:

    NETELLER, as detailed in the “Statement of Admitted Facts” attached to the DPA, admits that it had operated in the US an unlicensed money transmitting business and had participated in the performance of financial transactions for the purpose of promoting unlawful transactions between internet gambling merchants and persons located in the US.

    NETELLER agrees that it will pay an amount to the United States totalling US$ 136 million which is disgorgement of certain profits received by NETELLER from the activities described in the Statement of Admitted Facts. This amount includes the approximately US$ 60 million that the USAO has previously seized. NETELLER agrees that it will satisfy the remaining portion of its forfeiture obligation with a payment of US$ 40 million to be paid on or before 15 October 2007, and the remaining balance (approximately US$ 36 million) to be paid on or before 17 January 2008.

    NETELLER agrees to cooperate fully with US authorities in all matters relating to the ongoing investigations by the USAO.

    NETELLER agrees to fully implement procedures and controls to prevent illegal transactions between internet gambling merchants and persons located in the US and to continue to retain Navigant Consulting Inc., a forensic accounting firm, to monitor NETELLER’s compliance with these procedures and controls.
    Distribution Plan to be implemented
    As announced on 4 June, the Company has agreed to a plan for the distribution of funds to its US customers. The agreed plan details the process and mechanisms by which US customers will be able to initiate the return of their funds after the plan is implemented. NETELLER is using its best efforts to start implementing the plan as soon as possible and, in any event, by no later than 30 July 2007. The Company will communicate to US customers via email and through its website the exact date upon which such customers will be able to make requests.

    Restoration of trading to AIM
    As stated in the Company’s announcement of 13 July, the Company continues to make progress regarding the ongoing suspension of the Company's shares from trading on AIM. The Company is in discussions with its advisers and AIM and understands that the admission of the Company’s ordinary shares to trading on AIM has not to date been cancelled.

    With today’s announcement of a resolution of the USAO investigation, the Company is now focused on finalising and publishing its audited annual accounts for 2006. The Company will endeavour to post the 2006 accounts to its shareholders as soon as practicable following which the Company anticipates that trading in the Company’s ordinary shares on AIM will be restored.

    Further details will be announced as and when they become available.

  • #2
    Seems to me that this reads that neteller is paying $136 million in fines to the DOJ, but $60 million of it the USA players are paying. Maybe I'm reading this wrong?

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    • #3
      Lets hope this goes through with no snafus:

      Neteller withdrawals set to begin July 30!*
      Has NETELLER developed a distribution plan to return US member's funds?
      Yes. Pursuant to agreements with each of the United States Attorney's Office for the Southern District of New York ("USAO") and Navigant Consulting, Inc. ("Navigant"), NETELLER will start the distribution of funds on 30 July 2007.




      When will US members get their money back?
      US members will be able to access their accounts and begin the process of withdrawing funds on 30 July 2007.


      What is the Distribution Plan?
      The Distribution Plan outlines how US members will be able to withdraw their funds from their NETELLER accounts. The plan agreed upon with the USAO provides that US members will be able to make online requests to withdraw their funds starting on July 30 2007 and ending on January 26 2008.


      How long is the time period that US members can request their funds?
      The plan provides a 180-day period when US members can make an online request for the return of funds using NETELLER's website. This period will commence by 30 July 2007 and ends at 11:59 PM GMT on 26 January 2008.


      What happens at the end of the allotted period of time?
      Accounts will be placed in a permanent-closed status and US members will no longer be able to sign in to the NETELLER website.


      How will I withdraw funds from my account?
      US members will be able to request funds either by electronic transfer to the bank account on record with NETELLER if the US member confirms that such account remains valid, failing which such member can request payment by cheque sent to the mailing address as confirmed by such member.


      Can I choose which withdrawal method to use?
      The Distribution Plan states that US members must request an electronic transfer if they already have a bank account registered with NETELLER and confirm that such bank account remains valid. US members who do not qualify for an electronic transfer will be able to request payment by cheque.


      Can I withdraw my funds in more than one request?
      US members will receive the entire balance of the funds in their account. US members cannot make partial requests for funds.


      I am concerned about security. How can I be more careful about security as I request funds back?
      Many companies are subject to phishing scams. Only log in to the neteller.com website to request the return of your funds. Remember it must have neteller.com as the top level domain, and it uses the https security protocol - nothing else. For added security it is good practice not to click on email links either. Just type the address of the website you want to visit. When signing into your NETELLER account, it should always be at: https://www.neteller.com/signin/index.jsf


      What if I already requested to withdraw funds from my NETELLER account?
      If you already made a withdrawal request you will need to perform another request when the Distribution Plan is implemented. At that time, your NETELLER account will reflect the full amount that you are able to withdraw.


      Will I receive interest on my account balance?
      In accordance with NETELLER’s Terms of Use, no interest on account balances will be paid.


      Can I perform any other transactions like a peer-to-peer transfer?
      US members cannot use their accounts for any type of transaction other than to request their funds.


      Is there a fee to withdraw funds from my account?
      NETELLER will not charge fees to US members to process requests for funds.


      How do I update my banking information if it has changed recently?
      Member banking information cannot be updated. If the bank information is no longer valid, the distribution plan calls for a cheque to be issued to the member. Once the plan is enacted members will need to confirm, and if required, change the mailing address on record with NETELLER.

      What is the Release?
      When US members request to withdraw the funds they will be asked to agree to a Release which, in broad terms, is an agreement between NETELLER and the member that each releases the other from potential legal claims. US members do not need to agree to the Release in order to request and receive the payment of funds. However, US members who do not agree to the Release will, in turn, not be released by NETELLER.

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