Neteller exec guilty in internet gambling case

The co-founder of Neteller, which processed billions of dollars in Internet gambling transactions for Americans, pleaded guilty Friday to a charge of criminal conspiracy.

Stephen Lawrence, whose company, Neteller PLC, was once one of the primary ways U.S. citizens placed bets with offshore bookies, acknowledged in a federal courtroom in Manhattan that the operation was illegal.

“I came to understand that providing payment services to online gambling Web sites serving customers in the United States was wrong,” he told the judge.

His lawyers said he was cooperating with U.S. investigators, and had also agreed to be at least partly responsible for the $100 million the government is seeking from people who were involved in the operation.

Lawrence and another Neteller director, John David Lefebvre, were arrested in January as part of a U.S. crackdown on the online gambling industry.

Both men are Canadian citizens. Their company was based in the Isle of Man and traded on the London Stock Exchange. Some experts had initially believed that the company’s offshore status might put it beyond the reach of U.S. law.

Neteller also wasn’t directly involved in either placing or taking bets. It essentially served as a financial middleman, through which bettors could send and receive cash from Internet bookies.