Cybercriminals are increasingly using online gaming and micro-payments to launder money, according to a report by security researcher Jean-Loup Richet.
Richet -- who is Information Systems Service Manager at Orange and Research Associate at ESSEC Business School -- analysed forums to identify how people were moving their money around online through anonymous transactions. "Millions of transactions take place over the internet each day, and criminal organisations are taking advantage of this fact to launder illegally acquired funds through covert, anonymous online transactions," Richet explains in his paper. "The more robust and complex the various online marketplaces become the more untraceable methods criminals are finding to pass 'dirty' money into online accounts and pull 'clean' money out of others."
Richet said that we "all know" the oldest physical placement methods of money launderers, including cash smuggling, casinos and other gambling venues, insurance policies and shell corporations, but that a number of new web-based systems are emerging.
Richet observed large online hacker forums and communities looking for keywords related to payment solutions and black markets.
He found that online role playing games provide "an easy way for criminals to launder money". This tends to involve opening numerous different accounts on various online games -- such as Second Life and World of Warcraft -- to move money. These games use credits that players can exchange for real money. By using the virtual currency systems, criminals can send virtual money to associates in another country, which can then be transferred into real money.
A second growth area is "micro-laundering" via sites like PayPal or using job advertising sites. Micro-launching involves moving a large amount of money in small amounts through thousands of electronic transactions. One way of doing this is using mobile banking systems such as MPesa, Kenya's mobile wallet, which allows you to send money from prepaid mobile cards to criminal partners that will convert the credit into cash anonymously.
Similarly online job marketplaces with escrow services (money is paid to the platform before being paid out to the person who completes the freelance job) such as Freelancer.com and Fiverr can be used to conceal money via a money mule system. Users can create an account and post a job request asking for a service that would cost the amount of money they need to clean up. They can then sign up on the same freelancing site using a different IP address and bid on their own job offer. The first account can then select the second account to carry out the invented job, and can inform the job marketplace to release the funds to the second account.
Richet also flagged up some more "traditional" ways of laundering money online. These include using Costa-Rica-based digital currency service Liberty Reserve to transfer money anonymously. Liberty Reserve was seized by the US authorities in May for laundering $6 billion.
The research also makes reference to money mule scams, a slight variation on the rich Nigerian benefactor scam. It involves someone asking you to help them transfer money to your country. For your help you will receive a percentage of the transfer. Instead of trying to steal your money, they might try and transfer large sums of money stolen from other accounts to you. You'll then have to send the money to an alias account of theirs in exchange for a cut.
You will then be held responsible for the laundering.
More than $7 billion (£4.3 billion) is laundered every year through Colombian corporations from Mexican and Colombian drug cartels through the Black Market Peso Exchange or BMPE. This is a covert system of banking that lets drug dealers exchange American dollars for pesos.
These dollars are then bought by Colombian businessmen and used to buy American goods which are then sold back in Colombia. This traditional crime is enhanced with web technologies, through online black marketplaces and cryptocurrencies. "As we spend more time and money online, opportunities for criminals to involve us in their money laundering scams will only continue to grow. This will create an increasingly difficult situation for the various law enforcement agencies that are already being put to the test by the cunning of such criminals and the myriad untraceable means they have discovered to launder illegally obtained money," concludes Richet.
You can read the full paper here.
This article was originally published by WIRED UK
