From: Tim May <tcmay@got.net>
Date: Thu, 5 Jun 1997 02:28:01 +0800
To: cypherpunks@Algebra.COM
Subject: Cybernetic money laundering
Message-ID: <v03102800afbb60838612@[207.167.93.63]>
MIME-Version: 1.0
Content-Type: text/plain



Hey, we've been saying this for years. It appears the experts now admit we
were right.

The difference is that what they _worry_ about, we _embrace_.

--Tim


Wednesday June 4 10:07 AM EDT

Internet could help crime syndicates launder money

By Richard Waddington

LISBON - Big crime syndicates could soon be using the Internet to launder
dirty money and there might not be much authorities can do
about it, an international conference was told on Tuesday.

The international web, which already allows clients to shop and sell around
the globe, could become the perfect medium for the cocaine
barons of Colombia or the Mafia gangs of Sicily to make their ill-gotten
wealth respectable.

International police are already having a hard time keeping up with the
sophisticated maneuvers of criminals and fraudsters as they switch
funds from country to country, often making use of lax banking regulations.

But with the Internet and the coming introduction of electronic cash,
so-called E-cash, the authorities could lose what has been one of their
only advantages -- the need for criminal gangs to handle and at some stage
deposit big quantities of cash.
.....
E-cash could take the place of physical money in the same way that E-mail
has replaced the posting of letters. Huge sums could be
switched from person to person without the need to pass through any form of
banking system, experts said.

....

Backhouse said that experiments with E-cash, or digital banking, were
already being carried out in around 25 countries and the system
could become commonplace within five years or so.

"What is only a little trickle at the moment will become a roaring
torrent," he told Reuters.

But the ability to switch faceless funds effortlessly around the world was
not the only danger posed by the revolution under way in
international communications, experts said.

Organized crime could use the Internet to set up web-based companies
offering services of all types to act as vehicles for "washing" their
funds.

"The Internet is an ideal medium. It will be difficult to prove that such
companies and transactions are false," said Maclachlan.

Crime gangs could even go so far as to set up their own banking services as
accounts can be established with Internet banks using no
more than a photocopy of a driving license as proof of identity, experts said.

Global by nature, the network could be particularly difficult to police
because of the tricky question of territoriality. Which country has
responsibility when a bank can be based only in electronic space?

Copyright, Reuters Ltd. All rights reserved