Search
Who's Online
0 registered and 11 anonymous users online.
Newest Members
cdefgh156328, mnopqr755780, vwxyz{187162, pqrstu472017, vwxyz{651770
213 Registered Users
Forum Stats
213 Members
29 Forums
703 Topics
2954 Posts

Max Online: 208 @ 01/15/20 07:11 AM
October
Su M Tu W Th F Sa
1 2
3 4 5 6 7 8 9
10 11 12 13 14 15 16
17 18 19 20 21 22 23
24 25 26 27 28 29 30
31
Page 1 of 1 1
Topic Options
Rate This Topic
#17 - 10/13/07 01:44 AM E-GOLD
Michael45 Administrator Offline
Admin
old hand


Registered: 10/12/07
Posts: 803
Loc: San Antonio, TX
Here at Victims Against Scams we have been warning people and the government that E-GOLD has been used for scams and HYIP'S for years now. We first reported them back in 2000 and now it seems the wheels of justice have finally moved......

 Quote:

Owners of E-Gold indicted for money laundering
Service allegedly popular among child pornographers and other low-lifes
By Dan Goodin in San Francisco → More by this authorPublished Tuesday 1st May 2007 01:44 GMTUpdated [This story was updated on May 1 to include comments from E-Gold strenuously denying the charges.]

Three owners of online payment processor E-Gold and an affiliated company have been indicted for money laundering and related crimes for allegedly allowing sellers of child pornography, operators of investment scams and other types of criminals to send and receive payments related to their misdeeds. The company vigorously denied the charges and accused prosecutors of fabricating testimony.

In addition to E-Gold, the four-count indictment names Gold & Silver Reserve and company owners Douglas L. Jackson of Satellite Beach, Florida; Reid A. Jackson of Melbourne, Florida; and Barry K. Downey of Woodbine, Maryland. They are charged with one count each of conspiracy to launder monetary instruments, conspiracy to operate an unlicensed money transmitting business, operating an unlicensed money transmitting business under federal law and money transmission without a license under the District of Columbia.

Prior to the indictment, the defendants had already received a restraining order preventing them from dispersing assets. The US Department of Justice had also obtained 24 seizure warrants on more than 58 accounts believed to be property involved in money laundering and operation of unlicensed money operation.

According to prosecutors, E-Gold's status as the preferred payment method from some of Earth's lowest life forms was for good reason. The online service was purportedly backed by stored physical gold, and all that was needed to open an account was a valid email address. No other contact information or background information was necessary.

"Douglas Jackson and his associates operated a sophisticated and widespread international money remitting business, unsupervised and unregulated by any entity in the world, which allowed for anonymous transfers of value at a click of a mouse," said Jeffrey A. Taylor, US Attorney for the District of Columbia.

In a 1,900-word letter published online, Jackson offered a detailed rebuttal vigorously denying the charges and accusing the US Secret Service (USSS) of seriously bungling the case.

"With regard to child pornography, the government knows full well that their allegations are false, yet they highlight these irresponsible and purposely damaging statements in order to demonize e-gold in the eyes of the public," Jackson wrote. "e-gold, however, as a matter of incontrovertible fact, is the most effective of all online payment systems in detecting and interdicting abuse of its system for child pornography related payments."

He went on to accuse the USSS of deceiving a federal magistrate judge in December of 2005 in order to obtain search warrants in the case.

"Since this time, the government has been confronted with overwhelming evidence that the USSS had made a horrible mistake in its attack on the e-gold system and its repeated defamatory claims in the media that e-gold is anonymous, untraceable, and inaccessible to US law enforcement," Jackson wrote.

Three of the four counts each carry a maximum sentence of five years in prison. The count for conspiracy to launder money carries a sentence of up to 20 years.

The indictment is the result of a two-and-a-half year investigation by the US Secret Service, the Internal Revenue Service and the FBI.

The DOJ's press release is here. ®
_________________________
The posts on this forum are the opinions of the posters.

Top
#183 - 10/25/07 10:16 PM Re: E-GOLD [Re: Michael45]
Michael45 Administrator Offline
Admin
old hand


Registered: 10/12/07
Posts: 803
Loc: San Antonio, TX
E-Gold charged with money laundering
Robert Lemos, SecurityFocus 2007-04-30

UPDATE - Following a two-and-a-half year investigation, federal prosecutors charged online payment service E-Gold, its parent company Gold & Silver Reserve, and its three owners with four counts of violating the U.S. laws restricting funds transfers and money laundering, according to an indictment unsealed on Friday.



“ The advent of new electronic currency systems increases the risk that criminals, and possibly terrorists, will exploit these systems to launder money and transfer funds globally to avoid law enforcement scrutiny and circumvent banking regulations and reporting. ”

James E. Finch, assistant director of the FBI's Cyber Division The court filing claims that the companies' owners -- Dr. Douglas L. Jackson of Satellite Beach, Fla., Reid A. Jackson of Melbourne, Fla., and Barry K. Downey of Woodbine, Md. -- knowingly allowed criminals to use the service and profited from others' crimes. The indictment further claims that, because the service requires no identity verification outside of an e-mail address, E-Gold became the preferred method of payment for online scammers, identity thieves, and child pornographers.

"Douglas Jackson and his associates operated a sophisticated and widespread international money remitting business, unsupervised and unregulated by any entity in the world, which allowed for anonymous transfers of value at a click of a mouse," Jeffrey Taylor, U.S. Attorney for the District of Columbia, said in a statement. "Not surprisingly, criminals of every stripe gravitated to E-Gold as a place to move their money with impunity."

The digital-cash service denied the charges against the company and its owners and took particular exception to the government's allegations that the E-Gold service knowingly aided child pornographers.

"With regard to child pornography, the government knows full well that their allegations are false, yet they highlight these irresponsible and purposely damaging statements in order to demonize E-Gold in the eyes of the public," Dr. Jackson said in an e-mail statement sent to SecurityFocus, likening the use of child pornography charges to accusations of witchcraft. "In post 9-11 America, child porn and terrorism serve as the denunciations of choice. E-Gold, however, as a matter of incontrovertible fact, is the most effective of all online payment systems in detecting and interdicting abuse of its system for child pornography related payments."

In March 2006, E-Gold joined with 17 other financial institutions and the National Center for Missing and Exploited Children to limit the use of their services by child pornographers.

The indictment comes as e-payment companies are increasingly being used by online criminals to transfer the profits of their crimes. Using services such as E-Gold and WebMoney, groups that control malicious bot programs have offered to pay Webmasters and anyone with control of compromised Web sites typically $80 to $85 per 1,000 installs, according to sites advertising such partnerships. A number of groups that appear to be from China and Eastern Europe use the compromised Web sites to host nearly invisible IFRAME tags, which link to the attacker's site and infect visitor's computers.

Last month, one researcher investigated an online server used to store stolen digital identities and found that it also acted as an e-commerce service, selling the data for funds transferred to WebMoney. Other services occasionally used include Fethard and Western Union.

Yet, E-Gold allegedly has made no significant effort to curb the criminal use of its service, according to the indictment, handed down last Tuesday, but only unsealed on Friday. The service and its owners have purportedly allowed customers to continue using the service, even after other victims and companies flagged the activity as unlawful, the court document stated. In many cases, the database records of accounts would have notations that would imply that the company knew "the account holder was engaged in, including among other things, 'child porn,' 'Scammer,' and 'CC fraud,'" the indictment stated.

Other E-Gold customers have not even tried to hide their business, according to records seized by law enforcement officers and mentioned in the court filing. Thousands of accounts were allegedly opened using the abbreviation for high-yield investment programs (HYIP), a popular investment scam. The company did not include any prohibition on criminal activity in its user license agreement, according to the indictment.

E-Gold has become a popular way -- and possibly, the most popular way -- for online identity thieves, bot masters and fraudsters to transfer money.

Online criminals have tried to sell stolen bank account credentials, credit-card numbers, denial-of-service attacks, and even the holographic dove stickers needed to make counterfeit credit cards, designating E-Gold as the method of payment, said Mikko Hyppönen, chief research officer for antivirus firm F-Secure.

"E-Gold is anonymous and irreversible, which makes it attractive to the the underground as a method of payment," Hyppönen said.

In 2005, the company advertised that in one 24-hour period it transfered more than $6.36 million between E-Gold members accounts, a rate that would add up to more than $2 billion annually.

The company, founded by Dr. Jackson, a board-certified oncologist, and Downey in 1996, was raided in December 2005 by FBI and Secret Service agents. At the time, the U.S. government seized about $800,000 in assets from E-Gold's parent company G&SR, according to Dr. Jackson. On Friday, law enforcement agents seized another $762,000 from E-Gold and $736,000 from G&SR, stated Dr. Jackson in the e-mail statement sent to SecurityFocus.

"Having taken virtually the entire operating funds of G&SR and E-Gold Ltd., that is, the E-Gold in both companies' own E-Gold accounts, it is unclear if the government has even a basic grasp of the operations it has been investigating for three years at a taxpayer expense in the millions," Dr. Jackson stated.

The indictment filed on Friday names the U.S. Secret Service as the primary investigators on the case with the aid of the FBI and the Internal Revenue Service.

"The advent of new electronic currency systems increases the risk that criminals, and possibly terrorists, will exploit these systems to launder money and transfer funds globally to avoid law enforcement scrutiny and circumvent banking regulations and reporting,” James E. Finch, assistant director of the FBI’s Cyber Division, said in a statement. "The FBI will continue to work closely with the Department of Justice and our federal and international law enforcement partners to aggressively investigate and prosecute any, and all, persons or organizations that use these systems to facilitate child pornography distribution, to support organized crime, and to perpetrate financial crimes.”


E-Gold's parent company, Gold & Silver Reserve, is a Delaware corporation, but the company claims the payment service is based in Nevis, West Indies. In the indictment, investigators stated that all the company's files and assets are based in Melbourne, Fla.

United States authorities have obtained a restraining order against the companies' owners to prevent them from moving their assets as well as warrants enabling law enforcement agents to seize more than 58 accounts.

Federal prosecutors have charged the company and its owners with one count of conspiracy to launder monetary instruments, one count of conspiracy to operate an unlicensed money transmitting business, one count of operating an unlicensed money transmitting business and one count of transmitting money without a license. The money laundering conspiracy charge has a maximum sentence of 20 years, while the three other charges each carry a maximum penalty of 5 years in prison.

The charges of conspiracy to launder money and conspiracy to transfer money without a license allow the U.S. to seize all assets resulting from the profit of the alleged crime.

Top
#184 - 10/25/07 10:17 PM Re: E-GOLD [Re: Michael45]
Michael45 Administrator Offline
Admin
old hand


Registered: 10/12/07
Posts: 803
Loc: San Antonio, TX
FOR IMMEDIATE RELEASE
FRIDAY, APRIL 27, 2007
http://WWW.USDOJ.GOVCRM
(202) 514-2007
TDD (202) 514-1888

Digital Currency Business E-Gold Indicted for
Money Laundering and Illegal Money Transmitting
WASHINGTON – A federal grand jury in Washington, D.C. has indicted two companies operating a digital currency business and their owners on charges of money laundering, conspiracy, and operating an unlicensed money transmitting business, Assistant Attorney General Alice S. Fisher of the Criminal Division and U.S. Attorney for the District of Columbia Jeffrey A. Taylor announced today.

The four-count indictment, handed down on April 24, 2007, and unsealed today, charges E‑Gold Ltd; Gold & Silver Reserve, Inc.; and their owners Dr. Douglas L. Jackson, of Satellite Beach, Fla.; Reid A. Jackson, of Melbourne, Fla.; and Barry K. Downey, of Woodbine, Md., each with one count of conspiracy to launder monetary instruments, one count of conspiracy to operate an unlicensed money transmitting business, one count of operating an unlicensed money transmitting business under federal law and one count of money transmission without a license under D.C. law.

Subsequent to the indictment, the Department of Justice also obtained a restraining order on the defendants to prevent the dissipation of assets by the defendants, and 24 seizure warrants on over 58 accounts believed to be property involved in money laundering and operation of an unlicensed money transmitting business. The restraining order does not limit the E‑Gold operation’s ability to use its existing funds to satisfy requests to exchange E-Gold into national currency for customers of non-seized accounts, or its ability to sell precious metals to accomplish the same, once approval has been received.

According to the indictment, E‑Gold’s digital currency, “E‑Gold,” functioned as an alternative payment system and was purportedly backed by stored physical gold. Persons seeking to use the E‑Gold payment system were only required to provide a valid email address to open an E‑Gold account – no other contact information was verified. Once an individual opened an E‑Gold account, he/she could fund the account using any number of exchangers, which converted national currency into E‑Gold. Once open and funded, account holders could access their accounts through the Internet and conduct anonymous transactions with other parties anywhere in the world.

The indictment alleges that E‑Gold has been a highly favored method of payment by operators of investment scams, credit card and identity fraud, and sellers of online child pornography. The indictment alleges that the defendants conducted funds transfers on behalf of their customers, knowing that the funds involved were the proceeds of unlawful activity; namely child exploitation, credit card fraud, and wire (investment) fraud; and thereby violated federal money laundering statutes. The indictment further alleges that the defendants operated the E‑Gold operation without a license in the District of Columbia or any other state, or registering with the federal government, and thereby violated federal and state money transmitting laws. The indictment alleges that this conduct occurred at various times from 1999 through December 2005.

“As alleged in the indictment, the E-Gold payment system has been a preferred means of payment for child pornography distributors, identity thieves, online scammers, and other criminals around the world to launder their illegal income anonymously,” said Assistant Attorney General Alice S. Fisher of the Criminal Division. “This indictment demonstrates that the Department of Justice, in cooperation with its law enforcement partners, will aggressively identify and prosecute those who knowingly enable and profit from transmitting the proceeds of criminal activity, online or offline.”

“Douglas Jackson and his associates operated a sophisticated and widespread international money remitting business, unsupervised and unregulated by any entity in the world, which allowed for anonymous transfers of value at a click of a mouse,” said U.S. Attorney Jeffrey A. Taylor for the District of Columbia. “Not surprisingly, criminals of every stripe gravitated to E-Gold as a place to move their money with impunity. As alleged in the indictment, the defendants in this case knowingly allowed them to do so and profited from their crimes.”

“Today's indictment is the result of a two and a half year investigation by the U.S. Secret Service Orlando Field Office into an alternative payment system which has largely operated outside of normal banking industry regulations,” said Secret Service Assistant Director for Investigations Michael Stenger. “This system has been exploited for more than 10 years by criminals who operate primarily via the Internet. Cooperation among investigators, including the IRS, the FBI and other state and local law enforcement, has enabled us to more effectively address emerging threats and evolving criminal methods, such as the use of electronic or digital currency to facilitate trafficking in illicit goods and services.”

“The advent of new electronic currency systems increases the risk that criminals, and possibly terrorists, will exploit these systems to launder money and transfer funds globally to avoid law enforcement scrutiny and circumvent banking regulations and reporting,” said Assistant Director James E. Finch, of the FBI’s Cyber Division. “The FBI will continue to work closely with the Department of Justice and our federal and international law enforcement partners to aggressively investigate and prosecute any, and all, persons or organizations that use these systems to facilitate child pornography distribution, to support organized crime, and to perpetrate financial crimes.”

“This is a new twist on laundering money through unlicensed money transmitters but it is nothing new for financial investigators,” said Eileen Mayer, Chief of IRS Criminal Investigation. “The combined investigative skills of the law enforcement partners under the St. Cloud IRS Criminal Investigation and Secret Service Task Force proved to be a brick wall for E-Gold. We are proud to bring our financial expertise to this type of investigation that ultimately unravels fraud.”

The conspiracy charge in the case relating to money transmitting carries a maximum sentence of five years in prison. The federal law violation of operating an unlicensed money transmitting business carries a maximum sentence of five years in prison. The D.C. Code violation for money transmission without a license carries a maximum sentence of five years. The conspiracy charge relating to money laundering carries a maximum sentence of 20 years in prison.

The case is being investigated by the U.S. Secret Service with the assistance of the IRS and the FBI. The case is being prosecuted by the U.S. Attorney’s Office for the District of Columbia and the Computer Crime and Intellectual Property Section of the Criminal Division. Assistance is also being provided by the Child Exploitation and Obscenity Section and the Asset Forfeiture and Money Laundering Section of the Criminal Division.

An indictment is merely an accusation and the defendants are presumed innocent unless and until proven guilty.

Top
Page 1 of 1 1


Moderator:  Michael45, Ekid 
Hop to:

Generated in 0.026 seconds in which 0.007 seconds were spent on a total of 14 queries. Zlib compression enabled.

Copyright 2001-2011 Victims Against Scams LLC