Law enforcement agencies around the world are going to battle with companies providing online payment services who allow customers to use their services anonymously—making it nearly impossible to detect or trace money laundering activity.
Typically, companies who allow their customers to transfer funds (such as Paypal) must adhere to strict regulations, including the maintenance of customer identification records, filing reports of suspicious activities, and mandatory reporting on large transfers.
The anonymity of some online payment systems have created an atmosphere that some say encourages illicit use. Many of these services do not actually receive the cash transfers from the user. Instead, a third party receives and processes the transfer and then credits the system’s account. Users can easily remain untraceable in these systems as little more than a valid e-mail address is needed to create an account. The names and other information about the users can be easily fabricated. Those opposed to the widespread use of these anonymous systems are concerned that this “no questions asked” verification system attracts illicit activity.
Ernie Allen, the head of the International Center for Missing and Exploited Children, has been working for almost a decade to combat child pornography producers who frequently attempt to launder their profits. Allen and his organization have collaborated with global banks and credit card companies, along with internet service providers and payment processors, in an attempt to trace the money and find those profiting from the production and distribution of child pornography.
Global law enforcement officials and financial leaders have recently joined the fight against these anonymous online payment systems. Just last week, the operators of the Liberty Reserve currency exchange were indicted for laundering $6 billion—making it potentially one of the largest online money laundering cases in history.
Experts say that the proceeds from individuals committing a wide variety of federal and state law violations, such as weapons trafficking, drug trafficking as well as the selling of national and corporate trade secrets, make their way through these anonymous online payment systems every day. It is estimated that billions of illegal dollars travel through these anonymous payment systems. Although Liberty Reserve’s operations have ended, hundreds of other anonymous online payment systems are still operating at full steam.
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