NETeller co-founder released on bail

NETeller co-founder John LeFebvre was released Wednesday morning on $5 million personal-recognizance bail.

The 55-year old Malibu, Calif. resident was arrested Monday and faces money-laundering charges for his role in the founding and operating of e-wallet service NETeller.

LeFebvre, who appeared before a Los Angeles magistrate Wednesday morning, was forced to surrender his passport and agree to pre-trial supervision. He must remain in the central district of California unless traveling to southern New York to face trial, said Rebekah Carmichael, spokesperson for the U.S. Attorney's office in New York City.

Fellow NETeller founder Stephen Lawrence, also arrested Monday on the same charges, appeared in a U.S. Virgin Islands court Tuesday, Carmichael said.

Carmichael did not say if Lawrence was offered or posted bail.

Both men are scheduled to appear in the Southern District of New York Court on January 26, Carmichael said.

In other NETeller news, the largest online gambling "e-wallet" indefinitely suspended its popular "Instacash" option to U.S. players.

The Instacash option allowed online gamblers the ability to access electronic funds transfers (EFT) without having them first clear their financial institution.

Instacash was popular with online gamblers because players could use the deposited money instantly for a service charge. Traditional deposit methods force players to wait as many as 3-5 business days for the EFT to clear.

NETeller has also suspended the player's ability to fund their accounts instantly via credit card transactions. According to NETeller's Web site, players can still deposit money using traditional methods.

All withdrawal methods will continue to function normally, NETeller announced.