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

There is a lot of back and forth between Castel, Velamoor, and Marella. It’s basic routine, to make sure both parties are happy with the number and accuracy of the documents. Now he wants to hear the government’s viewpoint on the level of Lefebvre’s assistance. “Yes, Your Honor.” Like Lawrence, Lefebvre gave “substantial assistance” to the government, and Velamoor is happy to recommend that the defendant be sentenced in accordance with United States Sentencing Guidelines Section 5K1.1. The judge then invites Marella to address the court:

“Your Honor, I’ll try to be brief,” Marella begins, and then proceeds not to be. Comically mangling the pronunciation of his client’s surname to Le-FAY-ver, not Le-Fayve, the normal, French way, Castel begins:

First, in terms of Mr. Lefebvre’s background, Lefebvre was raised by his mother because his father was killed in a traffic mishap, when the defendant was three years old. He has a tight family unit. His mother, who is now eighty-three years old, lives in Calgary and will be moving to live with Mr. Lefebvre. He supports her. He always has done so. He has a sister and brother, and their relationship is good. And he has his daughter, Emily, who is here today, Your Honor. And Emily is, of course, the apple of his eye. He substantially raised her. And it’s a very wonderful success story, Your Honor, and gives some insight into Mr. Lefebvre. Because Emily not only went on to attend Trinity College in Ireland, she, for seven years, has been a lecturer there, after having studied the classics in Latin and Greek, and she’s been teaching there. And of course he’s justifiably proud of her.

Marella moves on to Lefebvre’s law career, highlighting his law degree and the Sunnyside Legal Clinic for its social activism. “This is indicative of who Mr. Lefebvre is. That law practice served a community, and particularly people of low and moderate means who needed legal services, and that was their law practice for several years.”

Marella turns to Neteller, saying, yes, Lefebvre cofounded the firm in 1999, and yes, he was president for a period. And then he pulls the shift: “It’s also important to understand exactly what his role was at the company. No question, he had the title of president; no question, he was a founder. But his responsibilities at the company and his impact on the company was substantially more narrow than that.”

Castel is only interested in the money, though, asking, “How much of the stock did he own at the outset?” Marella is forced off his gambit and has to tell the judge that when Neteller went public in 2004 Lefebvre owned twenty-two percent of the stock to Lawrence’s thirty-six. Then he gets back on point, which is that Lefebvre’s initial concentration, in 2001–02, was to run customer service. “He was never involved in sales,” says Marella, “never dealt with what Neteller called the merchants, the gambling sites. If someone had a problem using Neteller services, they called customer support and that’s where he was involved.”

After that, claims Marella, by January 2003 the company had brought in professional management personnel, and Lefebvre’s role was phased out. In fact, in terms of “daily dealings” with the company, Lefebvre was “out of the operation of the company” by the end of 2002. And in 2004, he became a non-executive board member, owning twenty-two percent of the stock. The phase-out was completed in December 2005, when he resigned his board membership. “Frankly,” says Marella, “he wasn’t doing anything” except be a shareholder. “As you know,” he points out to Castel, “there are limitations on when insiders can sell stock. Mr. Lefebvre divested himself of Neteller stock, to the point where by December of 2005, when he resigned from the board, he owned five percent of the company — five percent. From that point forward, until the time he was arrested in January of 2007, that was his only connection with the company.”

After laying out the position that Lefebvre might have made a lot of money as a cofounder but hadn’t been involved for years when busted, Marella pirouettes to the mea culpa. Yes, Lefebvre has openly admitted what he did was wrong. Yes, he has accepted full responsibility. “So there’s no slicing and dicing here,” says Marella. “Throughout this entire process, which is now about four years and ten months, he has never tried to minimize.”

He follows with a personal assessment: “I can tell you from having dealt with him over this period of time that this whole matter has weighed very heavily on him. He is absolutely remorseful for what he did. And, Your Honor, frankly, he’s embarrassed and ashamed … and he’s lived with it now for a long time.”

Marella then discusses Lefebvre’s comportment over the protracted presentence period. First, he agreed to forfeit the proceeds from crime and “he’s paid every cent of it.” Second, his supervision has gone without a hitch. “Never had an ounce of an issue or problem at all.” And third, according to the government’s Section 5K1 letter, he cooperated fully. Marella starts to lay it on thick, saying the cooperation, more than full, was “extraordinary,” and in fact he’s never seen such proactive help in “my thirty-eight years.… The important thing is that this information, these people, witnesses, were beyond the government’s reach. They were not U.S. citizens.”

Marella is trying to convince Castel that Lefebvre went above and beyond. In the guidelines manual, Chapter 5, “Determining the Sentence,” Part K, “Departures,” Section 1, “Substantial Assistance to Authorities,” the court might reduce the sentence for one or more of the following five reasons: (1) the significance and usefulness of the assistance, with the court considering the government’s evaluation of the cooperation; (2) the truthfulness, completeness, and reliability or the information provided; (3) the nature and the extent of the assistance; (4) any danger or risk to the defendant or his family involved with cooperation; and (5) the timeliness of the help.

Substantial Assistance, Section 5K1.1, is what saved Lawrence from doing substantial time, and so Marella hopes to keep Lefebvre’s sentence to the minimum established standard here, forty-five days plus a last little mosquito bite, $1 million. But Castel thinks, not so fast, and calls Marella on his use of the word extraordinary . He wants to know if anyone was prosecuted because of Lefebvre’s help.

Marella is left holding an empty bag, except to say Neteller the company had to settle with the government. That’s the $136 million it forked over. The government received a lot of new knowledge about online gambling because of Lefebvre’s cooperation, no question. But regarding nailing other offenders, Marella cannot say: “In terms of criminal convictions, I am not sure, nor am I sure of where the government is still going.”

Castel says, well, okay, so he “did everything he was asked to by the government.”

Marella replies, “No, Your Honor, he did more than that, with all due respect.”

Castel says, yeah, well, okay, he got his Section 5K1 plea agreement, which means he figured out “ways to make himself useful.” But, he asks, did Lefebvre “wear a wire, he didn’t put himself at personal risk or anything of the like?”

The two men haggle on this point for a while before Marella breaks the stalemate, saying, “There was one point in the investigation when the government was having significant problems in dealing with the computer system and how transfers were made and how it worked. One of the people that we brought in from outside the country was the head IT person, and he worked with the FBI to unscramble that omelet, Your Honor, and it was a major point. Enough said about the cooperation.”