Somehow it’s fitting on the day that the World Series of Poker champion is crowned that we find out that Neteller, the beleaguered Internet payment processor, has settled with the U.S. Department of Justice. According to the press release that Neteller issued:
- Neteller will forfeit $136 million to the US (inclusive of $60 million that the US seized from Neteller transactions earlier);
- US customers will be able to request withdrawals of their funds no later than July 30th;
- Neteller agrees to cooperate fully with the USAO [U.S. Attorney’s Office/DOJ] in all matters relating to the ongoing investigation;
- Neteller agrees to fully implement procedures and controls to prevent illegal transactions between internet gambling merchants and persons located in the US; and
- The DOJ will dismiss a criminal information against Neteller in two years as long as Neteller fully implements this agreement and fully cooperates with the DOJ.
So what does this mean? US gamblers will get their money back, likely in August. Neteller’s founders will get off with a slap on their wrist (a monetary fine). Neteller won’t be operating in the United States any more. And the DOJ gets a big boost in its investigation of online gambling firms because Neteller will cooperate with the DOJ (including testifying in court against online gambling firms).
What’s not in the agreement—but is almost certain to be happening—is any mention of taxes. However, anyone who thinks that the DOJ (and the IRS, by extension) will not be getting records of Neteller transactions should think again. Almost certainly that information will be finding its way to the IRS by year-end.
It’s interesting to compare what happened with what I predicted back in January.
“Indeed, it’s clear what’s likely to happen. Neteller and the DOJ will likely come to an agreement. Neteller will announce that they will no longer do business with Americans, and they may have to pay a fine; the DOJ won’t indict the company, or any of its current stockholders. The DOJ might even accept some sort of plea bargain for the two founders who were arrested. It’s also certain that as part of such a deal Neteller will agree to release details of all transactions between American customers and Neteller.”
And that’s basically exactly what occurred.
Tags: Neteller