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Egold Under Seige By FEDS

Tuesday, June 7 2011 :  After a guilty plea, a civil action is going after almost $9 million in remaining accounts
 
The United States Attorney for the District of Maryland is in the headlines again, with the Baltimore media reporting that the enforcement agency is behind a civil forfeiture action filed this week against e-Gold Limited, a payment processor that exchanged currency for valuable e-metals in electronic credit form, enabling international value transfers between its members.
 
The facility was used by a number of online gambling operations as a means of payment and deposit.
 
The US Attorney apparently collaborated with the Washington field office of the United States Secret Service in investigations into the e-metal payment system, according to affidavits filed in the court documents this week.
 
eGold Limited apparently pleaded guilty to operating an illegal money processing business in Washington DC in 2008, conceding that the value of all of the e-metal accounts remaining on its books was subject to forfeiture. It further agreed that it would assist enforcement officials in identifying any of its client accounts that might be traceable to criminal activity.
 
The company has since fulfilled its undertakings to the enforcement community, allegedly helping to identify a substantial number of accounts traceable to "child pornography, credit card fraud, identity theft, investment fraud, and the sale of stolen or non-existent goods on the internet."
 
The US government has already seized over $19 million in enquiries associated with the investigation, according to the affidavit requesting further forfeitures, and the current claim seeks to confiscate almost $9 million remaining in 609 accounts.
 
Giving background on the case, Assistant United States Attorney Stefan Cassella, who is handling the civil forfeiture for the government, reveals in his affidavit that e-Gold Limited began offering its services as a digital currency in 1996
 
Digital currency is used for online commerce or for funds transfers between individuals for private purposes, the affidavit informs. In general, an EGL customer opened an e-gold account, and then could use the Internet to transfer the value in his or her account to any other EGL customer anonymously and instantaneously anywhere in the world.
 
Because of the ease with which customers could purchase and transfer e-gold anonymously, outside of the confines of the traditional banking system, trading in e-gold became popular among persons looking for a way of laundering criminal proceeds and/or transferring criminal proceeds to third parties, the document claims.
 
"In particular, e-gold was widely accepted as a payment mechanism for transactions involving credit card and identification fraud, high yield investment programs and other investment scams, and child exploitation. E-gold was not widely accepted by large or mainstream vendors," the affidavit explains.



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