Slashdot Mirror
E-gold Owners Plead Guilty To Money Laundering
Ian Lamont writes "The three owners of Internet currency service e-gold have pled guilty to money laundering in the U.S. District Court for D.C.. The service is based in the West Indies, but the directors apparently live in Florida. They haven't been sentenced yet, but potentially face decades in prison and millions in fines. In addition, the principal director posted a blog entry yesterday saying that 'criminal activity will not be tolerated,' and pledging to eliminate the loopholes that allowed money laundering to thrive on the service. He also claims that e-gold has more transaction volume in a single quarter than all of the first-generation Web currency services like Cybercash, Beenz, and Flooz completed over their lifetimes. Ironically, one of the reasons that contributed to Flooz's demise in 2001 was rampant money laundering."
This royally sucks because e-gold was actually a very simple and easy way to purchase gold with very few and simple fees, and none of the tax burden.
Nw if the federal authorities could get the same concession from PayPal......
The real "Libtards" are the Libertarians!
E-gold is an online currency service that is backed up by gold. You cannot buy directly from them though, you have to buy through a redistributor, some of which are questionable and only takes certain forms of payment. The nature of the having a third party buy from egold and then sell to another person creates a web of denial effect for money launderes. One of the largest schemes e-gold is used for is in the credit card theft hacker rings, where it is easy to get credit card info, it is harder to "cash out". This is where "cashiers" come in, usually charging a 50 point take on cashing out for someone else. Egold, since it was in a different country, denies US Government requests for transaction records for accounts. E-gold may be in trouble, but for every e-gold there is another replacement, e-platinum, webmoney, and large handful of others. Oh yeah, btw, I didnt RTFA either, I just thought Id share what I know about e-gold, and I might be wrong about some of it.
"It's ok, I'm completely secure as long as my iron is off"
e-gold has tried spam as a marketing tool. When they stopped that, other spammers started following suit, phishing for account info--and e-gold's response was always "it's not our problem."
They've been actively aiding money laundering, and claiming they can't control what their customers do. Even now, Douglas Jackson is talking about fixing the flaws in an otherwise good system--despite the fact that he's likely going to jail for a few years.
e-gold is a dirty operation run by dirty crooks. It should be buried deep underground, and the gold reserves (if they really exist) used for something constructive.
"People who do stupid things with hazardous materials often die." -- Jim Davidson on alt.folklore.urban
For whatever reason, there are times when people pay cash and have no desire to reveal who they are to the folks with whom they are doing business. (I used to relish, back in the day, going to Radio Shack and refusing to give them my zip or other information as long as I was paying cash. They thought I was weird. I thought being forced to identify myself to buy batteries was just too stupid to put up with.)
So is there any way to anonymously pay for things online? I can think of only one: buy a pre-paid credit card for cash and use it online. Non-reloadable gift cards can be purchased for cash and activated for use online under any name you can think up; there's no verification.
However, that method is inconvenient. Do the slashdot hordes know of a better, easier way that remains anonymous?
Pegging the value of money to the value of metal is stupid. Metal only has the value that we assign to it, and there's no practical difference between saying "This banknote is worth $1000" and "This piece of gold is worth $1000". As for the government printing money to pay its bills, look at Zimbabwe. Inflation, in small doses, is a good thing because it encourages you to use your money rather than hide it under the mattress where it loses value. And as for comparing inflation to serious decades, try going back several hundred or thousand years rather than basing them off the post-Depression years, and then talk to me about pegging currencies to precious metals.
[FUCK BETA]
"The only thing that makes ANY currency worth ANYTHING is that people are willing to accept it"
Gold has been accepted by virtually all civilizations for thousands of years, probably because it can be worked, is beautiful, doesn't tarnish etc. I and many many others will take gold any day as it is more likely to keep its value than most anything else you can name.
Picking up on useful (to the prisoner community) trades can be beneficial to your safety as well. Jailhouse sign-language, as many gangs need people to communicate with the other tanks (50-man sectioned off units), but cannot do so themselves. Also, getting an outside trustee status can enable you to smuggle in tobacco products (or even marijuana if you're brave) with which you can both make money and friends on the inside. You'd also be surprised to find how many friends you can make by smuggling Kool-Aid and cookies from the kitchen back to the tanks, if you've been lucky enough to obtain a trustee position there. The list goes on.
Actually, you've just figured out a ballpark figure of how much the dollar has been devalued since we left the gold standard, when the value of the dollar was set at 1/20th of an oz of gold, eg: 1oz Gold = $20.
Another example I once read was that 1oz of gold, at $20, used to be enough to buy a very nice suit. Today, with 1oz of gold costing ~$900, it's still enough to buy a very nice suit. The value of the gold and the suit haven't changed much, it's the dollars that are worth less.
If we wanted to go back onto the gold standard, then yeah, we'd have to divide the number of dollars in circulation by the ounces of gold the government has left, and that'd be the exchange rate. It's probably not too far from $900/oz, which the gold-trading market has already set as a fair exchange rate between gold and US dollars. You got the order of magnitude right; you were only off by a factor of two.
Another example is what happened to Spain after they discovered Central and South America. Extracting gold from the natives was significantly cheaper than mining it themselves, and their economy went nuts for a while due to all of the surplus gold they imported.
It's been a while since I actively used e-gold, but as I recall, unlike such brain-damaged systems as ACH, it was impossible for anyone but the account holder to initiate a transfer out. On the other hand, if you were foolish enough to hand out your account password to random people you were doing business with, well, hopefully you learned your lesson and won't do it again.
There are times which violence ensues. Perhaps one prisoner snitched on anothers' contraband locations - he'll get a bar of soap in a sock to the head or something of that nature. For those people who are just there doing their time and minding their own business, it's not so bad.
There are a few bad eggs (more so than the rest) who are just prone to violent acts, but it is rather rare outside of maximum security facilities.
As for "rape", aside from people who did something to justify being punished in such a way (there's an unwritten code of conduct. "honor among thieves" if you will), the only intra-prisoner sex going on is consensual.
Bottom line, be nice, mind your own business, don't act like you're scared of everything and everyone around you, and you'll be just fine.
As a commodity, the supply of gold via mining is self-regulating. If the price of gold is higher than the cost of mining it (per unit mass) then mining will continue until the price decreases--or the cost increases--such that mining is no longer profitable. In the long run, mining gold is no more or less profitable than any other enterprise. The "commodity producers" thus don't bother me; under normal circumstances they have no incentive, or even ability, to flood the market with newly-mined gold.
As for the commodities market, anyone can play at that. If you feel you're overextended on cash -- which is what gold would be under a gold commodity currency -- then trade for some other commodity to distribute your risk. In any event, under a gold currency there wouldn't be a significant gold commodity market -- you'd just be trading gold for gold, which is kind of pointless. The only fluctuations would be in the value of refining and/or minting, not the gold itself.
The only groups that have traditionally been involved in manipulating the supply of gold are governments and their close allies, national central banks. Their actions with respect to commodity currencies are at least limited to the amount of such currencies they actually possess; these are, after all, the same groups that have complete control over the supply of fiat currency. Your options for controlling intervention in the money supply are exactly the same under a commodity currency as under a fiat one.
"The state is that great fiction by which everyone tries to live at the expense of everyone else." - Bastiat