Feeds

US deals foreign banks gaming blow

Subpoenas cause a stir

The Power of One Brief: Top reasons to choose HP BladeSystem

House of Cards Only days after two former executives of an Isle of Man based online payment service were arrested on money laundering charges, the American government dealt another black eye to the European financial services industry.

On Friday, the Federal Government issued subpoenas to major European banks, including Credit Suisse and HSBC, demanding copies of all business records, correspondence, and emails related to internet gambling transactions.

The subpoenas are the latest extraterritorial assault by the American government on foreign institutions involved with online gaming. Earlier in the week, two former executives of NETeller, a British payment processing service, were arrested on money laundering charges in connection with NETeller's online gaming financial transactions, although neither was currently involved with the company in any managerial capacity.

The fact that neither of them were currently involved with NETeller deepened the paranoia among those involved in the online gaming industry, even among those whose companies are no longer soliciting business in the American market, as the arrests concerned transactions dating back to 2005 when the status of American law on online gaming was still in question.

We know where you live...

It raises the possibility of widespread American criminal charges against anyone who has ever been involved with the online gaming industry, even if in a peripheral way.

After all, banks such as Credit Suisse that underwrote initial public offerings for online gambling companies are not necesarily those that have been processing retail transactions for the online gambling industry. This means companies previously considered safe from American bullying must now see themselves at risk - regardless of where they are headquartered.

It gets worse. Since indictments may remain sealed under American law, anyone in a decision-making capacity with any investment bank that has involved itself with what the Department of Justice (DoJ) described last week as a "massive criminal enterprise" should be particularly careful about travelling in any American jurisdiction, including places such as the American Virgin Islands or American Samoa that are involved with offshore banking.

Stephen Lawrence, a Canadian citizen and former CEO of NETeller (who has held no managerial position whatsoever for over a year), got snapped up by American authorities last week in the American Virgin Islands. The FBI grabbed the other former exeuctive, the guitar strumming lawyer turned philanthropist John Lefevbre, at his home in Malibu, California.

Apparently, the former NETeller execs had been the target of an FBI probe since June 2006, which means the money laundering allegations thrown at them pre-date the passage of the Unlawful Internet Gambling Enforcement Act (UIGEA).

Maybe the former executives were only the low hanging fruit due to their proximity to American justice, but one shudders to think what the American government intends to do once the 270 day waiting period ends before the UIGEA takes effect.

Although the arrests of the former NETeller executives shocked the gaming industry, the almost unlimited scope of the American subpoenas proved even more jaw dropping. After the arrests, NETeller almost immediately ceased accepting payments from American citizens, providing a link on its website offering instructions on how to withdraw whatever funds currently resided in those accounts.

A Canadian rival, ESI Entertainment's Citadel processing system, also ceased collecting payments from Americans in the aftermath of the arrests. However, NETeller PLC was not formally charged with anything, leading many to wonder when the other show would drop. Drop it did, but nobody expected anything of this magnitude.

Designing a Defense for Mobile Applications

More from The Register

next story
Just TWO climate committee MPs contradict IPCC: The two with SCIENCE degrees
'Greenhouse effect is real, but as for the rest of it ...'
Adam Afriyie MP: Smart meters are NOT so smart
Mega-costly gas 'n' 'leccy totting-up tech not worth it - Tory MP
'Blow it up': Plods pop round for chat with Commonwealth Games tweeter
You'd better not be talking about the council's housing plans
Arrr: Freetard-bothering Digital Economy Act tied up, thrown in the hold
Ministry of Fun confirms: Yes, we're busy doing nothing
ONE EMAIL costs mining company $300 MEEELION
Environmental activist walks free after hoax sent share price over a cliff
Help yourself to anyone's photos FOR FREE, suggests UK.gov
Copyright law reforms will keep m'learned friends busy
Apple smacked with privacy sueball over Location Services
Class action launched on behalf of 100 million iPhone owners
UK government officially adopts Open Document Format
Microsoft insurgency fails, earns snarky remark from UK digital services head
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Securing Web Applications Made Simple and Scalable
Learn how automated security testing can provide a simple and scalable way to protect your web applications.