E-Gold Admits Being Guilty of Enabling Internet Criminal Activity - Page 2

In 2006, BusinessWorld reported that the ShadowCrew—a 4,000-strong credit card fraud and identity theft ring operating in carder forums on the Internet—used E-Gold to launder some of their proceeds.

To anyone familiar with crime on the Internet, allegations of criminals using or manipulating E-Gold (or other services like these) are nothing new. E-Gold gives their customers the ability to transfer the value of gold, electronically. To transfer the gold's value—which has a cash value—all anyone needs is an e-mail address, account number, and password.

E-Gold type accounts are also prone to take-overs. This normally occurs when account numbers and passwords are stolen via what is known as phishing. Once the criminal compromises the account in this manner, they simply transfer the gold elsewhere. Phishing is accomplished using social engineering or sometimes with the help of malware (crimeware) that automatically steals all the information from a system using keylogging software.

Please note that, from what I've heard, people are never made whole (compensated) after this happens to them. Once the money is transferred, there is little or no recourse to be had by the account owner. Interestingly enough, E-Gold spins this as there are no chargebacks to worry about. Chargebacks occur when a financial institution discovers a financial instrument was used to commit fraud and the transaction is charged back to the merchant.

So far as the money laundering aspect, an anonymous service such as E-Gold can be used to move the proceeds of all sorts of crimes. People are known to be duped in job scams to launder money using a service like this. In cases like these, they are taking all the risks for a small portion of the rewards.

In most instances, anyone who gets involved in one of these scam activities is going to at the very least lose their shirt in the process. Of course, they can also get arrested.

The best thing to do is to be extremely careful when someone offers you riches, or "gold" over the Internet. There is a difference big between real gold and what is known as "fools gold."