Although Stephen Lawrence and John Lefebvre are charged with money laundering, there was nothing sneaky about their "conspiracy." In 1999 the two Canadians co-founded Neteller, an online payment processing company, now based in the Isle of Man, which openly specialized in serving online gamblers.

The FBI's investigation of Lawrence and Lefebvre, who were arrested last month and face a preliminary hearing in New York on Feb. 14, consisted mainly of reading their public statements and using Neteller to bet on a couple of football games — a vice that in this country has to rank up there with eating a second slice of Mom's apple pie while listening to "The Star-Spangled Banner." Yes, the feds really blew the lid off this publicly traded company that never made a secret of who its customers were or what it did for them.

The impressive thing about the case, part of the Justice Department's legally shaky crusade against online gambling, is not the evidence but the government's sinister spin on it. The feds pretend they're pursuing criminals while prosecuting honest businessmen for providing services Americans want.

The money laundering charges against Lawrence and Lefebvre — which carry prison sentences of up to 20 years, 10 times the maximum penalty for the offense they supposedly facilitated — are based on the government's claim that Neteller transferred money into and out of the United States "with the intent to promote the carrying on of specified unlawful activity." According to Michael Garcia, the U.S. attorney for the Southern District of New York, the "unlawful activity" was taking online bets from Americans, which he describes as "a colossal criminal enterprise masquerading as legitimate business."

Others, including the millions of Americans who use the Internet to bet on sports or play games of chance, the companies that serve them and the foreign governments that license and regulate the companies, see things differently. They see a legitimate business that bluenoses with badges are determined to tar as a criminal enterprise because they can't stand the idea that somebody in Westchester County might be playing poker in his pajamas.

Garcia cites the Wire Act of 1961, which makes it a federal crime, punishable by up to two years in prison, to accept bets on "any sporting event or contest" via a "wire communication facility." The act does not make it illegal to place the bets, and it does not mention any other forms of gambling.

Online bookmakers based in other countries argue that the Wire Act does not apply to them because they are not accepting bets on U.S. soil. A similar argument can be made regarding state gambling laws, which Garcia also cites.

Last year's Unlawful Internet Gambling Enforcement Act, which forbids processing payments for illegal online gambling but does not say which forms of online gambling are illegal, did not clarify matters. In any event, it did not exist when Lawrence and Lefebvre were involved with Neteller (which recently stopped serving American gamblers).

Yet Garcia claims Lawrence and Lefebvre knew the betting Neteller abetted was illegal. As evidence, he cites the prospectus that was given to investors when Neteller went public in 2004, which notes the possibility of legal trouble in the United States.

This attempt to use Lawrence and Lefebvre's candor against them is pretty amusing, given that the same Justice Department has accused the Costa Rica-based BetOnSports of committing fraud by advertising itself as "legal and licensed." As far as the federal government is concerned, no matter what people involved with online gambling say about the industry's legal status, it proves they're guilty.

In any case, mentioning that anti-gambling crusaders might bend the law into a crowbar and wallop Neteller with it is not the same as believing such an assault is justified. It is merely acknowledging that some people entrusted with government power may abuse it in a vain attempt to police the recreational choices of their fellow citizens.

Jacob Sullum is a senior editor at Reason magazine, and his work appears in the new Reason anthology "Choice" (BenBella Books). To find out more about Jacob Sullum and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate Web page at www.creators.com.

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