Virtual money laundering now available on the world wide web

Money launderers can now move illicit cash through the growing number of virtual reality role-playing games, and convert that cash into real currency before withdrawing it from ATMs worldwide. One wonders just how many laundrymen have tumbled to this cyberlaundering opportunity. Compliance officers at financial institutions please note that their banks may be guilty of money laundering if it facilitates deposits or payments in these virtual worlds, for there is no functional due diligence on players or recipients. Read original article.

You have heard all about these virtual reality universe games, where players actually travel throughout, buying and selling virtual property, goods and services. As a role-playing diversion, it has a wide appeal on the internet. If it is limited to cyberspace, and never enters the real world, it poses no financial crime threat.

Unfortunately, some of these games allow one to convert real dollar deposits to virtual dollars, and back to real dollars at a fixed exchange rate of, for example, ten to one, and to withdraw those funds, using many of the automated teller machine services available globally. Players are given an ATM card,(in essence a re loadable debit card) by the game manager and pay regular service charges on the same to the operator of the virtual reality website.

This is now a potential money laundering problem, as one can set up an account, send in identification, such as a bogus drivers' license and altered utility receipts, fund the account with the proceeds of crime, and have an associate on the other side of the world withdraw funds as profits, or even as working capital for a criminal enterprise. One even has the option of withdrawing the funds from a financial institution. This is playing with fire.

There is even a method offered by the virtual universe provider to increase the ceiling on how much cash can be withdrawn at one time. Are they facilitating money laundering ? We cannot say, but imagine this scenario:

• I open 15 to 25 accounts at the virtual universe website, all with counterfeit identification. I fund the accounts with narcotics proceeds cash, all patiently deposited at the available ATMs by my smurfs.
• I then purchase some virtual real estate from a co-conspirator, as a partnership of my bogus identities, and funnel all the virtual purchase money into his account.
• The "seller" can then access these funds, either through ATMs, or through a bank. Perhaps I open a small bank account, using bogus ID, and obtain cashiers' cheques with my now-converted "virtual" profits. Is this a great way to move criminal profits ? You bet it is.

Have they created a " financial institution" as the term is defined in the USA PATRIOT Act of 2001 ? It would seem that the answer is yes. Let us see just how long regulators and law enforcement allow this scheme to exist before taking action.