July 22, 2008
e-Gold Pleads Guilty To Money Laundering
The Internet currency firm e-Gold and three of it's owners have plead guilty to money laundering. e-Gold is similar to Pay-Pal but in my experience is a bit shadier in it's operations. It is known to be a destination for "carders" and most everyone who needs to move money around on the sly. I'm not surprised that it is used by a criminal element but I am surprised that the owners of the company were involved to this degree (and that the Dept. of Justice was able to make a case stick).
Why is this important you ask? Because when crackers and organized crime steal credit card information through virus's and malware they need a place to turn that credit into cash, e-Gold is one of many such places that are abused to make this happen. The 40 million accounts stolen in the Card Systems Hack and the 45 million accounts stolen in the TJX Hack are symbolic of the desire for credit card information by the criminal element online.
FINcen and the United States Secret Service are just a couple of the many organizations that monitor and track electronic fraud in the United States. Even with the assistance of non-governmental organizations, both on the corporate level and non-profits like Shadowserver I still believe the problem is far from being under control. Identity theft (and eFraud) have been continually on the rise, there were an estimated 15 million victims in 2006 with an average of one new victim every two seconds.
It has also been proven that terrorist organizations are using malware, carding and online money laundering to procure funds for battlefield supplies, travel expenses and general funds. Younis Tsouli and his mates are the primary example of using this activity for terrorism financing to date.
The standard for this sort of thing is that the card data gets stolen, mostly "cashed out" (the available funds removed) and then the accounts start trickling into the more common (and easily found) carding channels on the assorted IRC networks. Still not convinced? Go on over to SearchIRC or any other IRC server search engine and search for words like "cashout", "visa" or anything else to do with credit cards and prepare to be amazed at the blatant fraud.
(Disclaimer: the information above is for educational purposes only, if you go screwing around on IRC in the assorted carder channels you can and will get pwned, you have been warned.)