Barney Frank, Internet Gambling, Safeguarding America w/Financial Investigations

[WhiskeyGirl]

In October 2000, ICE agents in New Jersey opened a money laundering investigation after learning that possible drug proceeds were being laundered through a local bank.

The doleiros established U.S. bank accounts where they would receive and send wire transfers, with one of these accounts opened at Merchants Bank of New York, a division of Valley National Bank of New Jersey. Incoming and outgoing wire transfers were credited to the doleiros accounts from different entities, including businesses and individuals in the United States, Brazil and elsewhere, for payments in Brazil and the United States.

In August 2006, indictments were brought in this case against 16 corporate entities and 34 individuals for operating a money transmitting business without a license.

Red Flag Indicators

Large amounts of wire transfers sent and received from different business entities.

Large amounts of currency were sent and received into the target account, but the company was a shell company and nonexistent. Know-your-customer rules should help determine if a company has a physical location and is actively engaged in its stated business purpose.

The companies were incorporated offshore, but the individuals and contact information were located in Brazil.

A heavy volume of wire transfer activity with little or no corresponding cash deposits into any of the related accounts.

Even though a company has business accounts at a financial institution, personal accounts are being used for business purposes.

http://www.ice.gov/pi/cornerstone/reports/csreport_1008_page6.htm

How would anyone engaging in internet gambling 'know their customer'?  Any teeth in that bill to identify the customers?  E-Verify?  Ensure they are paying taxes before they are gambling away their money?

How does anyone identify drug money laundering?  Money from human trafficing?  Illegal activity?

Maybe E-Verify the players?  Ensure the play has a valid Social Security or other number and is legally able to gamble?  Anyone keeping track of how much these folks will be spending?

Internet gambling seems like a made for money laundering activity.

How do you keep the internet honest?  Players?  Internet gambling sites honest?

Something just doesn't add up here...

If I send the government (IRS, state) a penny, does that mean I'm done paying taxes?  I can keep the rest for myself?

jmho

[WhiskeyGirl]

New Trends: Combining Internet and Money Transfers

One of the trends the Netherlands has seen is the combination of the unlimited possibilities of using the Internet for fraud schemes. The underlying predicate offense is a very simple fraud scheme: products are sold through the Internet, money is collected and in the end the purchased goods are never delivered. The attractiveness of this scheme is that both Internet and money transfers are anonymous and it is a “clean” criminal offense. It enables the criminals to leave very little information compared to the use of bank accounts and high contact crimes, like human trafficking and drugs. Most cases are still under investigation.

How about substitute 'gambling is allowed' 'product are sold'.  In the end, there was no entertainment, it was about transferring money.

A fictitious product is posted for sale on a legitimate online auction site, such as eBay. Usually the focus is on high price articles, such as computers or watches, or high-value collector’s items. The product must be paid for before it is shipped to the buyer. The purchase is never shipped, so the buyer never receives the product.

Instead of a 'fictitious product', sell entertainment 'internet gambling'.  No limit on the amount of money you can win or lose...   

Payment through credit card.  No need to ship anything.  The rewards are waiting on the other end - the internet casino, gambling site.

Underlying this simple scheme the following actions take place:

Fraudster had Romanian nationality;
 
Buyer sends a money transfer to the Netherlands;

Cash withdrawal in the Netherlands;

Victims are in another country, like U.S. or Canada;

Use of false identity (identical address, but various individuals); and

Use of false ID cards (identical ID cards, various ID card holders).

http://www.ice.gov/pi/cornerstone/reports/csreport_509_page8.htm

With all the problems of identity theft, how would Americans be protected?  Anyone lay out some solutions?  Use E-Verify?  Fingerprints?

Are there any reporting requirements?  Report all transactions over $100 dollars, over 10 per day, who would keep track?

[WhiskeyGirl]

What in the Frank bill prevents internet gambling from exploitation by criminals?

Gambling may have some role in society.  How are policymakers, regulators and law enforcement guarding against the vulnerabilities of internet gambling and the related transfers of money?  Where are protections for the the financial system?

Will information on all money transfers be used to detect possible criminal abuse?  Money laundering?  Drug smuggling? 

Who's guarding the hen house?  Congress?  The White House?

The conclusion -

http://www.ice.gov/pi/cornerstone/reports/csreport_509_page9.htm

[WhiskeyGirl]

How do you keep the internet honest?  Prevent fraud?  Prevent internet terrorism?  Web attacks?