Cyberlaundering. How Anonymous E-money Originates
As it has been already discussed, cyberspace gives many opportunities to money launderers because of anonymity available on the net. Ecash, unlike real cash is very hard to trace.
So – anonymity. This is why money launderers are particularly interested in dealing with electronic funds.
Mark Bortner (Anonymous Digital Cash and Money Laundering, 1996) provides a typical common scheme of how it happens usually:
Doug Drug Dealer is the CEO of an ongoing narcotics corporation. Doug has rooms filled with hard currency which is the profits from his illegal enterprise. This currency needs to enter into the legitimate, mainstream economy so that Doug can either purchase needed supplies and employees, purchase real or personal property or even draw interest on these ill-gotten gains. Of course, this could be accomplished without a bank account, but efficiency demands legality. Anyhow, Doug employs Linda Launderer to wash this dirty money. Linda hires couriers (”smurfs”) to deposit funds under different names in amounts between $7500 and $8500 at branches of every bank in certain cities. This operation is repeated twice a week for as long as is required. In the meantime, Linda Launderer has been transferring these same funds from each branch, making withdrawals only once a week, and depositing the money with Internet banks that accept ecash. To be safe, Linda has these transfers limited to a maximum of $8200 each. Once the hard currency has been converted into digital ecash, the illegally earned money has become virtually untraceable; anonymous. Doug Drug Dealer now has access to legitimate electronic cash.