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E-Gold Indicted

For Money Laundering, Conspiracy

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

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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.


12:43 am on May 4, 2007 (gmt 0)

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E-gold is located in Nevis in the Caribbean. I believe it used to be incorporated in Panama.

Any indication that the three principals can be found?

7:31 am on May 4, 2007 (gmt 0)

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wow, i guess e-gold comprise real threat to the government they afraid to lose influence on money market. Instead of helping them find the scams they blame them.
11:35 am on May 4, 2007 (gmt 0)

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It was the closest thing to cash in the online world. (that I've heard of.) Eventually, the US would like to do away with cash in the real world.

They need to know what people are buying so they can tax. (oh, and stop drugs, terrorists, child pornographers, and bake sales.)

3:05 pm on May 4, 2007 (gmt 0)

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I have a feeling that they are going to come down hard on these guys (and rightfully so if the charges are true).
3:55 pm on May 4, 2007 (gmt 0)

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The most important quote in this article is:

The restraining order, according to the DOJ, does not limit the e-gold company's ability to use its existing funds to satisfy requests to exchange e-gold into national currency for customers of nonseized accounts

Basically, any system has their bad apples. I am sure these fraudsters had bank accounts somewhere, so the banks have been told to release info and freeze assets as well. Only banks are real careful about this information, it will ruin their reputation. Ironically, this article is a praise to eGold.

4:58 pm on May 4, 2007 (gmt 0)

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If you read up on what fiat currency is, why governments love it, the meaning behind the term "petrodollar" and the on-going attempts to prevent people using gold as currency, and this makes perfect sense!

I must admit I presumed it had to have some kind of hidden scam to be legal and allowed to operate, which is why despite my strong approval of using gold over print-at-will "currency", I've never used Egold.

Now it would appear they were on the level - and had to be closed down.

Don't hold your breath waiting for other banks that "launder" money or ignore illegal activity to be closed.


7:17 am on May 7, 2007 (gmt 0)

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Other banks may have been involved at some point in the lines of 'business' you describe, however I suspect that many cooperated with the govt to stop this kind of thing.

Wouoldnt have thought it holds much water if the people that own it are clever and cant be found.

8:20 am on May 7, 2007 (gmt 0)

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An Essex boy eh? Me too, though no longer living in the UK.

If from England you may have heard of the "direct lending online" thing?

I'm half expecting that to be closed down in time, for the exact same reasons - it's competition to the banks.



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