Money laundering is a process for concealing the origin of funds generated by illegal means. People generally associate money laundering with drug trafficking, gun smuggling, or corruption. But funds misappropriated by identity theft, phishing, and carding also have to be “laundered.” Today, the mushrooming of virtual money (or e-currency) makes the job easier when you need to eliminate traces of suspicious actions. In the past, E-Gold and WebMoneyÂ were frequently under suspicion and had to respond to serious allegations of having been used to transform “dirty money” into “clean money.”
But they are not unique; ECUMoney, Liberty Reserve, PerfectMoney, Pecunix, etc. are also on the scene. As with all digital gold currencies, these exchangers offer nonreversible transactions, which is a primary advantage when you want to manipulate money.
Today, websites proposing virtual money exchanges are numerous on the Internet. They are profitable for their owners because they are subject to significant exchange commissions. It is also relatively safe for the people offering these services. In the past, malware authors explained they created their programs only for educational purposes and were not responsible for any inappropriate use. Today administrators of such websites are trying to claim they are not liable for the origin of the transmitting money.
Here too, the network is turning professional, and many former crooks are now specializing in this field. In October 2004, the U.S. Secret Service arrested people said to be responsible for a set of credit card and identity thefts that had plagued Internet users. It was the result of Operation Firewall. Most of them frequented ShadowCrew,Â a worldwide marketplace where thousands of members traded stolen credit cards and debit cards, as well as bank account numbers and counterfeit identification documents, such as drivers’ licenses, passports, and Social Security cards.
One convicted person, using Voleur (French for “thief”) as a pseudonym, set up a special payment system for cybercrime transactions. For a 10 percent commission, he exchanged cash for E-Gold, the well-known and controversial digital gold currency. Voleur laundered money for dozen of deals of forum members, moving amounts ranging from $40,000 to $100,000 per week. With about twenty other individuals, he pleaded guilty in November 2005, was sentenced in June 2006, and was released later on.
At that time, Voleur’s work was not institutionalized. But today, I believe, this individual is again in business and manages some websites specialized in giving advice for digital currency activities. One of them is named “Voleur Financial Services”; that’s a tall order!
On another site from the same origin (same administrators), we can see some examples of current fees:
Many people want to seize power in this fruitful business, and there are no holds barred. Enemies of Voleur often spread stories of him on the Internet and do not hesitate to reveal bank account numbers.
U.S. nationals are not alone in this business. At the time of Operation Firewall, an Eastern Europe married couple (he is Russian, she is Ukrainian), Â their son, and several other people were arrested after they moved more than $35 million in suspect funds through their company, a pioneer of virtual money exchange. Their office was originally located in the Empire State Building, in New York City. Approximately $20 million flowed through E-Gold digital currency accounts.Â It is also estimated they purchased approximately $15 million worth of Webmoney digital currency.
Now, from the Manhattan House of Detention, the main prisoner/offender keeps his blog, gives security advice, and is visited by compassionate countrymen. Â Some of his friends (I suppose) still manage such exchange sites from Russia. From one of them, these screen shots show transfer fees and how easy it is to remain anonymous in the world of money transfers.
When you visit the website, you will discover a touching interview made in a U.S. jail and the (presumed) building housing the actual company: a bit empty, but nonetheless prestigious in the New York area.
In early April, at an annual conference ofÂ the Association of Russian Banks, Finance Minister Alexei Kudrin explained that many small banks are now “engaged in money laundering”. It seems that many suspicious online companies are also engaged in this business both in and outside of Russia.