bobothecat - 11:58 pm on May 3, 2007 (gmt 0)

A federal grand jury last week indicted the three owners of two companies operating a digital currency business on charges of money laundering, conspiracy, and operating an unlicensed money transmitting business. All three face a maximum sentence of 35 years in prison if found guilty.

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 fund 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.

The case is being investigated by the U.S. Secret Service with the assistance of the IRS and the FBI. It 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.

Hmm... doesn't sound good for e-gold.

[informationweek.com...]