NEW YORK (Reuters) - A former president and co-founder of payment processor NETeller pleaded guilty on Tuesday to a conspiracy charge related to handling billions of dollars in illegal gambling proceeds.
John Lefebvre, 55, entered the plea before U.S. District Judge P. Kevin Castel during a hearing in Manhattan, just days after co-founder Stephen Lawrence also pleaded guilty in the case.
Lefebvre, a Canadian Citizen who ran NETeller's business operations, agreed to cooperate with the government as part of a plea deal. He faces up to five years in jail when he is sentenced on November 1.
During the hearing, Lefebvre admitted promoting Internet gambling. Its legality was ambiguous in the United States for many years, but was effectively banned last October when President George W. Bush signed legislation outlawing gaming financial transactions.
"I eventually came to see that promoting payment services to online gambling businesses serving customers in the United States was wrong," Lefebvre said.
Prosecutors said both Lefebvre and Lawrence provided payment services to offshore Internet gambling businesses through NETeller, a Canadian company based in the Isle of Man.
Lefebvre pleaded guilty to a wide-ranging conspiracy charge that included transmitting interstate and foreign bets, promoting gambling offences and operating an unlicensed money transmitting business between 1999 and 2007.
Lefebvre and Lawrence were arrested in January, leading NETeller to quit the United States, abandoning two-thirds of its business.
Last month, Britain's NETeller said it agreed to a plan for U.S. customers to access their money for the first time since the online payment processor's U.S. funds were frozen in February.
A crackdown on Internet gambling by U.S. authorities began a year ago with the arrest of BETonSPORTS's then-chief executive, David Carruthers.
In May, BETonSPORTS pleaded guilty to U.S. racketeering charges and agreed to help the authorities in cases against founder Gary Kaplan and other co-defendants, including Carruthers.
The online gambling ban passed last year made it illegal for banks and credit card companies to make payments to online gambling sites. At least one U.S. congressman favours a bill exempting poker and some other games from the ban.