Bill Reynolds - Life Real Loud - John Lefebvre, Neteller and the Revolution in Online Gambling

Lefebvre’s lawyer Vince Marella and his wife are also spectators. They’re on vacation and dressed casually, perhaps too casually for the solemn proceedings. It’s hard to believe Castel would take this as a slight, but we’ll find out on October 23. Marella is on a mission to report back to his partner Gluck and to Lefebvre.

A latecomer in a suit sneaks in just before the judge arrives, shakes hands with Lawrence, and sits down on the right side of the room. There are few official people here aside from Neiman and the prosecutor, Assistant U.S. Attorney Arlo Devlin-Brown, and U.S. Attorney for the Southern District of New York Preet Bharara, the man who took down the eleven online gaming executives in April. There are officers of the court, the court reporter, the court clerk, Homeland Security’s Steven Cash, and the FBI’s Jonathan Ball.

An avuncular Castel enters the silent, carpeted room. “Good morning, Mr. Neiman, Mr. Lawrence.” He mentions Lawrence’s letters of support as well as the receipt of the forfeiture and a raft of other documents. He is sentencing Lawrence under a criminal history Level 1 (meaning he has no priors).

Neiman suggests that as an example of leniency in online gambling cases, Castel might look at the sentencing of Anurag Dikshit by U.S. District Judge Jed S. Rakoff in New York. Dikshit’s company, PartyGaming, had been involved in illegal online transfers and illegal gambling, and although he agreed to the government’s $300-million forfeiture and one year’s probation, no prison time was demanded. Neiman says other examples of this type are in the documentation. Then he says Lawrence took the sentencing seriously, and his cooperation with prosecutors has been unprecedented. He demonstrated caring for others, gave a lot of money to charity, and spent hundreds of hours in soup kitchens and old-age homes in the Bahamas—“in essence Mr. Lawrence has spent the last almost five years on probation in some ways, right?” Right.

Castel then offers Lawrence an opportunity to speak for himself. He begins, “Your Honor, thank you for allowing me to speak at this time.” He recounts his first appearance in court in 2007, careful to reiterate that his “behavior was wrong” and that he tried to change company behavior post-UIGEA but realizes those actions “came too late.” Then he talks about atonement: “Since that time, I’ve done my very best to assist the government, and I believe that my efforts have helped the government very much.”

Then Lawrence veers into a personal issue. He has been married to the same woman for twenty-three years. As she continues to fight the stage III breast cancer she was diagnosed with in 2009, he expresses regret for the “pain and embarrassment that my actions caused her and my family.” Things aren’t looking up in business for Lawrence, either. He says the bust and the guilty plea stalled out his venture capitalism career and it’s been tough to earn a new buck. That’s a bridge statement so he can talk up all the charitable work and community service he’s performed since 2008 in the Bahamas. “I’ve been working firsthand with the destitute in my community,” he says, “which has opened my eyes to true human suffering.”

Lawrence concludes by saying he believes he has helped many of the needy, and while he understands completely how wrong his actions were, he respectfully asks the judge to show mercy and “not separate me from my loved ones and please allow me to go on serving the needy in my community. Thank you.” Prosecutor Devlin-Brown chips in a word in Lawrence’s favor. He says the defendant’s “cooperation in this case truly is extraordinary and deserves substantial consideration at sentence.”

Castel calls Neiman and Devlin-Brown’s comments “helpful” and Lawrence’s statement “sincere.” He gives a quick sketch of Lawrence’s life — born in Ottawa, spent much of his life in Calgary, a business administration graduate of the University of Western Ontario, a talented man with great ability, Neteller would be a substantial accomplishment if it had been legal, mentions all the good deeds since the indictment, etc., but also drops in this nugget:

Notably, in 2004, several years before his arrest, he transferred $210 million by deed of gift into a foundation for his wife and daughter, and the foundation owns real estate holdings in various locations. They own a yacht, eight vehicles — eight automobiles, I assume — four golf carts, and a motorcycle, and the defendant has the benefit and use of at least the physical assets of the trucks. I should also mention that the defendant’s wife in turn is the owner of another business that in turn owns a Cessna 414 aircraft.

Then Judge Castel makes the turn. He says in the U.S., the people elect representatives who determine public policy, and “gambling, online gambling, sports betting, poker” are unlawful. At least in New York anyway, he might have added, where it has been deemed illegal to use a computer to transfer money to place a bet at a jurisdiction where gambling is legal. “Somebody might take issue with this,” he concedes, before saying, hey, go talk to your elected representative if you don’t like it and try to get the law changed. Then he makes a general statement that makes clear his distaste for the subject: “Gambling corrupts and destroys and erodes people’s lives — unlawful gambling.”

Lawful gambling can corrupt and destroy people, too, of course, but he does not make this point. Then Castel brings his version of historical context to the sentencing preamble: “If you go in the past, oh, I would say from 1919 through to 2007, there are three spectacular instances of where it was sports betting that corrupted what many Americans, and Canadians, hold dearly — the sport of baseball.” Uh-oh, looks like Lawrence is going to pay for Shoeless Joe Jackson, the Black Sox, and the 1919 World Series scandal.

The second instance cited is not a baseball scandal but rather a point-shaving exercise in college basketball that went on between 1947 and 1951, affecting eighty-six games and ruining many careers. The third instance is also about basketball corruption: “an NBA referee who pled guilty to making calls on the court to influence the point spread in a game.” Judge Castel is referring to Tim Donaghy, who, in his last couple of years of officiating, bet on games he worked and made calls that affected the point spread. Americans hold basketball dearly, too.

“So the fact of the matter is,” Castel says, “to those who love sports, love basketball, love baseball, love football, it has in fact a corrosive effect on all of that.”

Looks like Lawrence is doing time.

“Based upon all of the foregoing circumstances, a sentence of forty-five days’ imprisonment, supervised release of one year, and a fine of $1 million and the imposition of a special assessment of $100 is, in my view, sufficient but not greater to achieve the purposes of Section 3553(a).”

Lawrence blinks. Neiman can only muster, “Obviously we’re asking for a different sentence than that.”

Castel asks Lawrence to stand so he can impose the sentence. He is “hereby remanded to the custody of the United States Bureau of Prisons to be imprisoned for forty-five days.” The defendant waives his right to appeal.

Neiman asks for mercy in regards to the immediate remand. He asks that his client be allowed to surrender voluntarily and gives a number of reasons why Lawrence has nothing to gain from fleeing. “He’s been out on bail for years and proven himself to be no risk of flight.”

Castel expresses reluctance: “The defendant does not have the kind of ties to the United States.… He could very easily elect to … remain in the Bahamas or Canada, where he’ll live very, very comfortably, rather than return to do the sentence.”