I have been in the drug peddling business for as long as I have been an adult. When I started the business, my headache was usually how to “launder” my “dirty” money. In the beginning, laundering money was a physical effort; I was forced to conceal the existence, the source, or application of my income, and then disguise that income to make it appear legitimate. I needed to have physical means to transport the hard cash. The trick was, and still is, to avoid attracting unwanted attention form the KRA or any other government agencies.
That was the "lo-tech" world of money laundering; the process of cleaning "dirty money" was limited by the creative ability to manipulate the physical world. Other than flying cash out of one country and depositing it in a foreign bank with less stringent banking laws, I had to make do with bribing a bank teller, or discretely purchasing real or personal property. I would also structure my transactions and employ platoons of couriers to assault the lobbies of banks throughout East Africa and Europe with deposits under the minimum requirement to avoid raising eye brows.
The Anti Money Laundering Law attempts to close the loopholes in law that allowed for the structuring of transactions to flourish. In criminalizing the structuring of transactions to avoid reporting requirements, they thought they had me. Hah!
As the physical world of money laundering began to erode, I developed the tendency to use electronic transfers to avoid detection. I have never looked over my back again. Electronic transfers of funds are known as wire transfers. Wire transfer systems allow criminal organizations, as well as legitimate businesses and individual banking customers, to enjoy a swift and nearly risk free conduit for moving money between countries. Considering that an estimated 700,000 wire transfers occur daily in the United States alone, moving well over $2 trillion, illicit wire transfers are easily hidden.
However, I have this feeling that the privacy of wire transfers is being compromised, due to burdensomely detailed record keeping regulations, electronic surveillance of transfers, or other potentially invasionary tactics. I have since made changes. I leapt into cyberspace. That virtual universe where the demand for efficient transactions has led to the birth of electronic cash. E-cash, or digital money, is a series of numbers that have an intrinsic value in some form of currency. I love it because of anonymity.
My first experience was the best, and unforgettable. Three years ago today, my palacious room in Mombasa was filled with hard currency. This currency needed to enter into the legitimate, mainstream economy so that I could either purchase needed supplies or even draw interest. Of course, this could be accomplished without a bank account, but efficiency demands legality. I employed Linda Launderer to wash this “dirty” money. Linda hired couriers to deposit funds under different names in amounts less than the limit required for filling in several East Africa cities. This operation was repeated twice a week for as long as is required. In the meantime, Linda was transferring these same funds from each branch, making withdrawals only once a week, and depositing the money with Internet banks that accept ecash. To be safe, these transfers were also limited to a maximum less than the reporting requirement. Once the hard currency was converted into digital ecash, my money was now virtually untraceable; anonymous. What’s more, I had access to legitimate electronic cash.
Even though Linda and her army of couriers are violating structuring regulations by depositing small amounts in regular bank accounts, how will you to apply current money laundering law to get her. Remember, cyber-banks are not registered in Kenya, hence cannot be regulated within. Further, they are not insured, hence the depository regulations do not apply. Still, the cyber-bank, even if registered and regulated, will not automatically be required to file report since transactions are under the limit. Now, the government can only hope that an employee of the Internet bank has a suspicion of structuring, and then the bank files a report.
With no mandatory compliance with the filing regulations contained within the Money Laundering Act, cyber-banks are able to operate outside the reach of current regulations, laundering on the Web is hence blooming.
Remember that once the e-cash account has been established, I can access my digital funds from any computer that is properly connected to the Internet, including the World Bank Library Computers. Linda was very creative; she actually accessed funds via telnet. (a basic command that involves the protocol for connecting to another computer on the Internet). Thus, she transferred illegally earned funds from her laptop on the Whiteland Hotel; telneting to her account leased from any unknowing Internet Service Provider in Kenya and had her leased Internet account actually call the bank to transfer the funds, thus concealing her true identity. What a trail for law enforcement!
On the Internet, anonymous e-cash would allow for anonymous purchases of personal property. This fact yields at least two separate, but interrelated advantages to me and of course a nightmare to Ali’s Boys. First, both Linda and I are able to discretely use our “legally” obtained profits to legitimately purchase property. Second, the temptation for property dealers to become players in the game for anonymous e-cash is overwhelming. If a seller or dealer understands that it can not possibly trace who spent e-cash at its establishment, the fear of becoming involved with dirty money is drastically reduced. If the purchaser's identity is anonymous, and even the bank can not trace the spent e-cash, the force of the Anti Money Laundering Law is withered into mere words on a page.
In summary, Linda Launderer and I knowingly structured financial transactions so as to avoid reporting requirements. Under current law, we are in violation of Law. However, if the cyber-banks in which she has e-cash deposits are outside the reach of current banking regulations, these banks have no duty to file any currency transaction reports. Nevertheless, assuming that cyber-banks which accept anonymous e-cash are somehow subject to the same laws and regulations which financial institutions in the tangible world are, Linda must first be caught before she can be found guilty (then maybe, she will tell them where we met, if at all we met). This is where anonymous e-cash may save Linda from fines and jail time. Even if cyber-banks are required to file transactional reports pertaining to e-cash, the reports will be virtually useless, as the banks have no knowledge as to which funds are Linda's. Thus, Linda and I MUST enjoy the benefits of completely anonymous money laundering.
That is, unless our “hardworking” parliament and “progressive” Minister for Information could attempt to legislate in this new area of commerce, digital money and virtual banking; or Central Bank, given its “transparency”, is granted the constitutional authority to secretly monitor all cyber-banking transactions, despite its lack of accountability to the general population.
Remember, I still have the "right to be let alone". At the bottom of all these is the battle between the right to privacy by means of anonymous digital cash verses the desire of law enforcement to ferret out crime. Complete anonymity guarantees money laundering whereas the lack of it means “no protection for personal data” online. Traceability.
The principles of Privacy in the constitution require me to give consent for disclosing information in my financial records. Also, in order to obtain my financial records from my bank, the government must serve a subpoena before or concurrently with service on the bank and on doing so, it must show that the records are related to a "legitimate law enforcement inquiry," and notify me to take steps to block the bank's disclosure of the records. Finally, I am protected against unauthorized interception of electronic communications and from an electronic communications service provider from knowingly divulging the contents of a communication while in electronic storage.
If the government believes that e-cash is overflowing with money launderers, a "legitimate law enforcement inquiry" into the situation would likely allow access to e-cash account records. But even the bank can not trace e-cash to a user, who will? You must be thinking of new laws, regulations and polices; not to mention special "investigatory software" to flag suspicious e-cash accounts.
Source:
In a article I read that "According to KPMG's Fraud Barometer over £1.1 billion of fraud came to UK courts in 2008. This was the second highest level in 21 years. (KPMG, February 2009). The Chairman of the Cybercrime Working Party of the Fraud Advisory Panel Cyberlaundering is currently (2006) estimated to be running at $50 billion each year"(https://secure-web2.secondlife.com/statistics/economy-data.php?d=2009-04-12)..
It is very amazing for me, over £1.1 billion in one year...
I have two questions which come in to my mind:
Why there are no appropriate laws for casinos to prevent these crimes? Because I found that in online casino we can find more unsecure area for these kinds of crimes because there is no requirement to provide identity and authenticate and there is little or no record and these elements can lead to activities which is out of control
My second question is that with these secure and full control electronic payment systems which working with many restrictions like CIMB Bank and all limits that they have how these crimes happens?