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I. Social Effects
II. Fraud and
Gaming
Integrity
III. Lost Revenue
IV. Organized
Crime
V. Ban or
Regulate?
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Organized Crime
Money Laundering
Money Laundering may generally be defined as the process of hiding the illegal source of funds. Traditionally, illegal enterprises might split a large sum of money into relatively small deposits and mask them by making transfers for bogus services. The small amounts might then be recombined, making the true (and illegal) source nearly impossible to track.
Cyberspace has become an attractive means of money laundering for criminals. Online transactions, such as those involved in internet banking, are harder to track than traditional "offline" transactions. Internet gambling operations make tracking transactions even more difficult because the transactions are recorded on computers, typically offshore. The IRS has enacted a safeguard against laundering in legalized gambling operations. They are required to file a Currency Transaction Report Casino (CTRC) for transactions in excess of $10,000 for the purpose of detecting money laundering.
No such safeguard is present for non-regulated internet operations.
References:
- U.S. Dept. of Treasury, Internal Revenue Service, Currency Reporting - Money Laundering, at http://www.irs.gov/compliance/enforcement/
article/0,,id=113003,00.html
- BBC News, Money Laundering in Cyberspace, Feb. 2, 2001, at http://news.bbc.co.uk/1/hi/business/1149984.stm
- Sam Vaknin, Ph.D., Money Laundering in a Changed World, May 2005, at http://samvak.tripod.com/pp96.html
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INTERNET GAMBLING