Fake Stores "Transaction Laundering" Online Gambling Funds

Published Friday, June 23, 2017 - Online-Casinos.com
Fake Stores "Transaction Laundering" Online Gambling Funds

A recent report that the Reuters News source has published has exposed what appears to be a network of fake online stores that offers household goods but has instead been used for internet gambling transactions. Regulators and card companies are dealing with the strategy known as "transaction laundering" described as when one online merchant processes card payments representing another, which can disguise the real nature of the payment.

These phoney outlets are part of a multinational system to disguise payments for the estimated $40 billion online gambling industry, which is illegal in some jurisdictions and some American states. Reuters exposed a number of web domains that are linked to this form of gambling funds transaction. The article and investigation has raised a number of questions about the policing of global e-commerce and how the banks and credit card firms are handling it.

Dan Frechtling, Head of products at G2 Web Services, a financial compliance company said, "Transaction laundering is serious misconduct, often criminal," It was suggested by other experts in the field that Reuters questioned that transaction laundering helps online merchants trade in areas that credit card issuers and banks may otherwise call "high risk."

Ron Teicher, CEO of Evercompliant, a cyber-intelligence firm commented, "It is the digital evolution of money laundering," adding, "The only thing is it is much easier to do, and much harder to get caught."

Evercompliant found the fake store were part of what they called an "ecosystem" consisting of nearly fifty linked websites, owned by firms in countries ranging from Georgia to Latvia.

Pointing out the severity of this issue Gregory Lisa, a partner at international law firm Hogan Lovells which has worked with the U.S. Treasury Department's Financial Crimes Enforcement Network said, "Illicit finance is incredibly creative," adding, "It is a very difficult arms race between the government and illicit actors and their financiers."




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