A common approach until recently was to use the Costa Rican digital currency service called Liberty Reserve. This converted dollars or Euros into a digital currency called Liberty Reserve dollars or Liberty Reserve Euros, which could then be sent and received anonymously — one of the few services to allow this. The receiver can then convert the Liberty Reserve currency back into cash for a small fee.For those with any professional interest in the subject, the full 19-page report (pdf) is worth a read.
In May this year, however, the US authorities shut down the service and charged its founder and various others with money laundering.
But Richet says the closure of Liberty Reserve is unlikely to end these practices because there so many alternatives. These include WebMoney, Bitcoins, Paymer, PerfectMoney and so on.
Another increasingly common way of laundering money is to use online gaming. In a growing number of online games, it is possible to convert money from the real world into virtual goods services or cash that can later be converted back into the real thing. “Popular games for this type of scam include Second Life and World of Warcraft,” says Richet.
Then there are the money mule scams. Most people will be familiar with the spam in which a high level official from a developing country asks your help to transfer significant amounts of money and are prepared to pay well for your services. But first, they require your banking details which they promptly use to empty your account and then disappear.
In a growing number of cases, however, the criminals do actually transfer large amounts of money into your account and then ask you to forward it. However, since this involves stolen funds that are being laundered, you are accountable for the crime.
Another scam is to offer people jobs in which they can make a substantial income working from home. However, the ‘job’ involves accepting money transfers into their accounts and then passing these funds on to an account set up by the employer. In other words, money laundering!
Sunday, October 20, 2013
Online money laundering: Tricks of the trade
Via the MIT Technology Review, I was interested to run across this United Nations analysis (pdf) of online money laundering. Some of these methods I'd heard of - including the use of export goods and employment forums to launder drug money - but the manipulation of multiplayer online gaming communities Grits had admittedly never considered. Here's a notable excerpt from the MIT Tech Review: