I'm having trouble getting sed to see \n

I'm trying to write a script to delete specific lines from a file, i.e.:
sed -e 's|'$1' yes\n||g' < /etc/ftpchroot > /etc/ftpchroot.new

But it doesn't seem to interpret the \n as a newline character, in the
search expression.

If I remove the \n from the above expression, it works, but a blank line is
left in the text file.

Ideas?

jam