Life Real Loud

by Bill Reynolds

  Lefebvre told her he thought he might become a government target because of the business he used to run. Later, she was surprised to learn that Lefebvre was even going down to his house in Malibu.

  • • •

  And for a while he wasn’t. After the BetonSports bust on July 17, both Lawrence and Lefebvre became wary of U.S. travel. They began to think the DOJ might be adjusting its thinking and coming after the money transferers—that is, people like them. Then, a few months later, Lawrence decided to sneak back into the U.S. for a golf tournament. Gordon Herman talked to him on the phone while he was in the U.S., and he later told Lefebvre that Lawrence had been back. Lefebvre was surprised. And then Lawrence went again.

  Lefebvre explains, “The second time, Steve asked me if he could use my plane to go down. He thought it would be better than to get his name registered on an airliner. I didn’t really understand his thinking because everybody knows who owns my plane. So he went down and I asked Gord if he’d heard from Steve. Gord told me Steve said, ‘Come on in, the water’s fine!’”

  That’s when Lefebvre decided to start going down again, not long after he had expressed concerns to Calvert. One of those trips was to see producer Brian Ahern in California to talk about recording an album. “I was probably in and out three or four times,” he says. “Nothing.”

  If the DOJ wanted to come after Neteller’s cofounders, logically it would want to pick them up at the same time. But nobody was thinking along those lines. In any case, that wouldn’t be easy. Lefebvre hardly ever saw Lawrence that autumn or any other time. By this point, they weren’t working together. “He was on the East Coast,” Lefebvre says. “I was on the West Coast.”

  • • •

  Around the same time, in October, Lefebvre lent his brother the jet. “Ted’s an oil and gas guy,” says Lefebvre. “He’s one of the leaders of the Canadian Association of Petroleum Landmen (CAPL). So he goes to the American APL, too. That year they had the American meeting in Albuquerque and the Canadian meeting in Montreal. He and his boss weren’t going to take in both unless they had private aircraft, just because of tight connections. So my plane flew into Albuquerque with my brother—J.E. Lefebvre, not J.D. Lefebvre.”

  Lefebvre imagined the scenario unfolding on the tarmac: “All these FBI guys down there on the runway with their walkie-talkies: ‘They’re on the runway. They’re landing. They’re getting out … It’s not him! He’s not on the plane! Turn your backs! Abort! Don’t let anybody see you!’” And he imagined his brother surrounded by guys wearing black suits and black sunglasses and white socks. “That probably wasn’t the only time they were following my plane.”

  Around the same time, he said, another unsettling event happened. A lawyer approached Neteller with some information, saying, “We think you’re in the crosshairs.” No one took it seriously.

  Michael Lipton, as a gambling lawyer, took it seriously. He didn’t want to speculate too much about the DOJ targeting a Canadian company, but he did have a few ideas: “First of all,” he says, “it was foolish of both of them to be in the United States. They knew about Carruthers. I guess they were deaf, dumb, blind, and stupid.”

  Lipton believed the DOJ wanted to stake out a strident position: the United States is not a jurisdiction that is hospitable to gaming. According to Lipton, their thinking went, “Anybody who comes here, we don’t give a shit.” He also thought the prosecutors looking into this case might see the former Neteller executives as “low-hanging fruit,” men who could be “stepping stones” for their futures.

  Lipton also clarified that the DOJ’s aggressiveness extended beyond current company operators to founders and owners. If you had divested from the company you started, well, too bad. So far as the DOJ was concerned, you were still involved. “You’re not going to be able to bury your past,” he says. “That was a strong statement the DOJ wanted to make.”

  All Lefebvre will say about being deaf, dumb, blind, and stupid is, “We didn’t think they’d prosecute.”

  • • •

  In December, Lefebvre stayed home on Salt Spring until a couple of days before Christmas. Then he flew to Calgary and stayed at his Mount Royal house. His brother, Ted, and Ted’s wife, Gail, hosted Christmas at their place. Emily and Pádraig were in town with a couple of Calgary friends and some Irish buddies as well. After dinner with her grandmother, aunt, and uncle, Emily and the gang flew to L.A. to hang out at both Malibu 1 and 2.

  “That was the first time we had bush fires down there,” Lefebvre says. He flew down to join his daughter early in the new year. He continues, “I remember I was downtown, in the guitar store at Westwood, buying guitars. Emily phoned and said, ‘Have you heard anything about fires out here?’ So we turned on the TV in the guitar store and, sure enough, big fires in Malibu. I phoned Emily back and she said, ‘We went out on the street. It looks like tons of smoke coming this way.’ I said, ‘It might be a good idea to get your passports and head down to Malibu 1,’ which is twelve houses further west.”

  The Santa Ana winds–assisted blaze destroyed four homes, including the mansion belonging to Suzanne “ThighMaster” Somers.

  “Then I tried to get home,” Lefebvre recalls. “It was tough to get into the neighborhood. You had to prove you were from there. It was weird. Finally, they let me in.”

  That was Monday, January 8. Emily, Pádraig, and their friends packed up and flew home a few days later. Then Lefebvre had both places to himself for the weekend. It was a long weekend because Monday was a holiday. Martin Luther King Day.

  XII (January 2007)

  My Bail’s Bigger Than Your Bail, Part 2

  Day Five, Friday, January 19, 2007, Oklahoma City Federal Transfer Center (FTC): Con Air touches down at Will Rogers World Airport, located on Oklahoma City’s west flank, about three miles west of Interstate 44, which hems in most of the city’s subdivisions. The plane taxis down a runway to the southwest corner of the airport, docking at a building shaped like a hexagon. From there, prisoners deplane directly into the FTC.

  Think of Oklahoma City as a hub, sort of the O’Hare of Con Air. Marshals escort prisoners through an enormous holding tank, which has steel coverings all over it, like on the back of transport trucks, so no damage can be inflicted. Lefebvre stands in the room with a bunch of other guys. They make him fill out a sheet of paper. They hand him a pencil, a stubby one, like a golf pencil. They don’t want him stabbing anybody. He jots down what is necessary. The guy with the skull tat for a head is in there with him. He meets some other guy sporting a nicely trimmed mustache—smallish guy but looks like he takes care of himself. He wasn’t on the Con Air flight, but he’s in the same tank. Lefebvre finds out he’s twenty-two years into a forty-year sentence for trafficking pot in Texas, and wonders about it. Sixteen hundred pounds is a lot of weed, but still.

  Unshackled, Lefebvre pulls out his phone. He tries his lawyer. Knowing these guys, he figures they won’t tell Marella where they’ve taken him. It’s up to him to make contact and let his lawyer know exactly which godforsaken shithole he’s ensconced in, but you can’t dial out to cell phone numbers on Con Air or in Oklahoma, and cell numbers are all he has. He has one other useful number, Marella’s office line, but now it’s after five o’clock on the coast so it’s on message. What he really needs is a calling card or a U.S. credit card. Lefebvre doesn’t have anything except Canadian credit cards and his cell, so he’s SOL.

  • • •

  While Lefebvre ponders how he’s going to survive the Oklahoma circle of Dante’s Inferno, Stephen Lawrence arrives in New York from the Virgin Islands. He is ready to appear before the Honorable Douglas F. Eaton, United States magistrate judge, for his arraignment/bail proceedings. It’s the first round of United States v. Stephen Eric Lawrence, and his lawyer, Peter Gillies Neiman, Esq., will attempt to win some freedom of movement for his client. United States Assistant Attorney Timothy J. Treanor, Esq., has
other plans. He will try to prove to Judge Eaton that the ridiculously wealthy Lawrence is a classic white-collar criminal and a major flight risk who should be placed under strict supervision until he can establish a compliance record with pretrial services.

  The day before, the Calgary Herald had run an article about the bust of two hometown success stories. The reporter quoted Toronto gaming lawyer Michael Lipton, whose assessment wouldn’t bolster the defense’s confidence: “The U.S. is exerting its long arm in an effort to totally stamp out online gaming in their country, and in this case are pushing as hard as they can.”

  In Courtroom 5A, 500 Pearl Street, New York, Judge Eaton asks, “What is the government’s position on bail?” and the FBI lawyer gives him a mouthful. Treanor says the government is “troubled” by Lawrence’s failure to disclose his assets fully, adding that “it’s really a matter of public record that Mr. Lawrence made well in excess of $100 million from his involvement in Neteller PLC, which is the business at issue in this case, and he has disclosed only a fraction of those assets in his pretrial services report. We’re concerned that Mr. Lawrence will use those assets to remove himself from U.S. jurisdiction.”

  Treanor argues that Lawrence has an extensive travel history, something that snagged Lefebvre in L.A. as well. He paints Lawrence as an expert at moving large sums of money out of the U.S. undetected. Neiman counters that the government has already agreed to a bail package in the Virgin Islands, and his client, although he could have fled, showed up voluntarily today. Further, the claim that Lawrence moved money undetected is false. Neteller’s activities were never hidden. The company traded on the London Stock Exchange’s junior market AIM and was regulated by a financial services agency. Its books were audited by KPMG. It had major investors, including Goldman Sachs and HSBC. Its website openly declared that the company was in the business of money transfer services. Neiman also reminded the court that Neteller “cooperates historically with government investigations in the United States.”

  And anyway, Neiman argues, it is not the business of the pretrial services officer to do the work of the government in determining a defendant’s assets. Since this is a money laundering case, it would be a mistake for any client to disclose this information when there is a forfeiture case against him. “By the way,” Neiman reminds the judge, “the money laundering they claim exists is essentially … providing money transfer services to merchants over the internet, and the claim of the government is that providing those kinds of transfer services to internet gaming operations that are licensed and lawful in the places where they exist is nonetheless a violation of U.S. law. That’s an untested hypothesis of the government. We think there are strong arguments against it.”

  Then Neiman jabs at the flight-risk argument. He argues that Lawrence has arrived in New York as expected and on time, that he’s already posted four-fifths of his $5 million bail, in cash, even though he was required to pay only half by this juncture. Next, he admits that, yes, Lawrence is Canadian, but he has substantial ties to the U.S. When he was younger he worked in New York for a period of time. He currently owns one condo in New York and is in the process of buying a second. His wife, Perle, and toddler-age daughter, Audrey, are here now. He comes to New York regularly for both business and pleasure.

  Neiman presents a picture of Lawrence as a straight shooter: “if you think about what the business was as described in the complaint, it was a business of handling other people’s money in a trustworthy fashion and people relied on that business to do that in an honest fashion and there’s been no allegation by the government that it was ever done in anything but a fully honest fashion.” He says Lawrence is a good man who wants to stick around and clear his name.

  Lawrence is confined to the Southern and Eastern Districts of New York for the time being. His passport already surrendered, he is not allowed to go back to his home in the Bahamas or anywhere else outside the continental U.S. They argue back and forth over whether he should even be allowed, with sufficient notice, to move within the U.S. Treanor wants Lawrence to establish a track record before the government lets him move around. He says there is “hardly a white-collar case imaginable that would have more of a risk of flight than this case because this individual has the means.… We do not believe that Mr. Lawrence needs to be locked up in a prison pending the outcome of his case but we do want substantial assurances that he will remain here until the conclusion of the case against him.”

  Judge Eaton doesn’t buy the argument. Lawrence has bounced in and out of New York about a dozen times and been in the U.S. about one hundred days in the past year. It sounds like he has ties to New York, and he has never tried to conceal the fact that he was crossing into the U.S. He’s always taken some form of commercial flight, not his own personal jet, when traveling here. “I am basically going to go along with the recommendation of pretrial services,” says Eaton. “I don’t think the drug testing is needed on the present record. For the time being we will call it a strict pretrial supervision.”

  Lawrence gets to live in New York. He gets to travel within the U.S. so long as he tells the pretrial services officer exactly where he is going and where he’ll be staying each night. The judge even allows for the possibility of Lawrence’s business meetings superseding his weekly pretrial services meetings. He says the officer “should be flexible about that and allow you to report in person the next time you’re back in New York City.”

  Treanor is losing his case, but he gives it another go. He asks Eaton to insist there be U.S. citizen co-signers on the bail money so that if Lawrence says goodbye to the money he’ll put others on the hook. He says, “There’s not a lot of moral suasion. I would ask that some who are citizens and present in the United States be required, at least for a significant portion of the bond.”

  The judge tells Treanor that Lawrence has already coughed up four million bucks and has ties to the U.S. but no relatives, which might make it hard to find a U.S. citizen to agree to be on the hook for the other million or whatever the amount ends up being. He adds that while the government’s theory might be “novel,” he would leave it to the next judge to decide whether he in fact has left a loophole for Lawrence “to be playing games with the pretrial services” and to flee.

  Treanor takes issue with this characterization of the government’s position, which leads to a discussion of the other defendant, Lefebvre. Treanor argues,

  The government’s legal theory here is not in any way novel. The Court of Appeals has ruled that offshore internet gambling is an offense.… It’s plain on the face of the statute, not novel.… Your Honor, we conducted this investigation in a way that Mr. Lawrence would not have known the steps that we were taking and, in fact, we simultaneously arrested Mr. Lawrence in the Virgin Islands and his partner in Malibu, California.… Mr. Lawrence was arrested first and within five minutes Mr. [John] Lefebvre’s phone was ringing with the name of one of their other co-conspirators essentially, we believe, alerting him to flee the jurisdiction.

  Judge Eaton has no idea who this Lefebvre doppelgänger from Malibu is. He finds out both men had the same bail conditions imposed upon them. Treanor explains, “He was released on similar conditions to report here in the Southern District” and that as far as he knows, Lefebvre is now in the marshals’ custody and is expected to arrive on Monday. He adds, “We believe they did not think that they were under investigation, and we believe that if they had known that they were they would have fled the jurisdiction immediately.”

  Treanor continues,

  That’s why Mr. Lawrence positioned himself in the Bahamas and not in Canada, where gambling is illegal, or the United States, where unlicensed gambling is illegal. There is another defendant in this industry … arrested by the Eastern District of Missouri. He’s a British citizen. He’s been placed on house arrest with electronic monitoring, required to establish a residence there under conditions. A man of less means than Mr. Lawrence or Mr. Lef
ebvre and placed under greater restrictions than the restrictions that Your Honor has ordered here today.

  We would ask at a minimum that the restrictions of Mr. David Carruthers in the Eastern District of Missouri be placed upon Mr. Lawrence. In all honesty, Your Honor, we are not arguing that this individual be detained pending the outcome of this case. We are amenable to bail. We just don’t have a comfort level and knowing what we know from the investigation of this case and the fact that it played off of the strength of law enforcement’s inability to do certain things overseas that that is a tremendous risk of flight and we fear that we’re going to be left without the ability to prosecute this case on some level.

  Treanor has Eaton’s attention: “Mr. Carruthers has been placed on electronic monitoring,” Eaton says before asking, “what sort of security, if any, has he posted?”

  Treanor replies,

  Your Honor, I can’t tell you the size of his bond. I believe it’s smaller than the bond here. Mr. Carruthers was the CEO of a company called BetonSports.com, which is an offshore gambling business, one of the businesses Mr. Lawrence’s business facilitated. Mr. Carruthers was arrested when he flew through the United States on a warrant out of the Eastern District of Missouri. He’s been charged with a number of offenses, gambling offenses, racketeering offenses, and required to establish a residence in St. Louis. He was placed on house arrest there with electronic monitoring. He’s been given—initially I think it was two hours a day to leave the apartment to do certain things. I think it was expanded to two two-hour periods after they had—after he had established a record of complying with his pretrial requirements and he’s awaiting trial. He’s been indicted. I think the trial is scheduled for the early summer in St. Louis. And he’s been held under those conditions for exactly the reason that if he were to flee the United States that would severely hamper the prosecution.