On of the issues that continues to bug me in relation to money laundering is the potential for (and almost certainly the actuality of) the use of various online non-bank payments services for money laundering purposes.
There must be tens, if not hundreds, of ways of moving funds around the globe while creating a good cover story to explain the movement and thus wash the funds.
A good example would be to use eBay and PayPal – if I needed to move funds from (say) Australia to Hong Kong it would be easy for my counterparty in Hong Kong to arrange an auction for a seemingly valuable, if fake, item (say an antique of some description) then I bid for the item, a fair way over its true value – using a second account (or another associate) to ensure the bidding goes high enough to transfer the funds I need to.
At the close of the auction I arrange payment for the item and it is shipped to me. Total costs of transfer – shipping for the vase (if you think it needed) and seller’s premium on eBay. Result – funds transferred with good cover story if the Australian Federal Police ever come knocking. If you want to totally cover your tracks (and maybe make an insurance claim) just break the vase.
The in-game transfers in the MMPORGs (such as Second Life) have been blogged on before, notably by Chris Skinner, as has eGold. While large, one off-transfers are likely to get picked up on these I would have thought that frequent, low value transfers would not. All you would need to move large numbers around the planet would be several accounts, possibly under multiple names.
The question then comes down to: should they be regulated like other money transfer services and, if so, how? Often there will be no physical presence of these firms in a country and blocking them in some way would cost a fair amount, be ineffective in any case and eliminate a legal business.
The only real way I can think of doing it is the way that the US attacked the online gambling industry – cutting out transfer to the business involved. In this case it would not be to cut them out, but to make them reportable.
Most popular