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EGOLD in TROUBLE

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Posted by: golddust

E-gold Major Agents’ Accounts Seized By US Government and 1MDC Is No Longer Operational.





Quote:
It now appears this morning that all large e-gold exchange agents doing business with US clients have had their e-gold accounts seized by US court order.

Here is what we know as of this morning.

1. Icegold, AnyGoldNow, 1mdc, Omnipay and other large exchange agents have all had their accounts blocked by a US government agency court order.
2. When attempting to log in on these accounts, the e-gold server responds that the account does not exist. It appears the accounts have been seized by the US authorities.
3. It is now not possible to unbail (withdraw) bars from e-gold Ltd.

http://www.1mdc.com/


Posted by: golddust

Now this:

Digital Currency Business E-Gold Indicted for Money Laundering and Illegal Money Transmitting
2007-04-27 21:39:19 -

http://www.pr-inside.com/digital-cu...ted-r107629.htm WASHINGTON, April 27 /PRNewswire-USN



Quote:
-- A federal grand jury in Washington, D.C. has indicted two companies operating a digital currency business and their owners on charges of money laundering, conspiracy, and operating an unlicensed money transmitting business, Assistant Attorney General Alice S. Fisher of the Criminal Division and U.S. Attorney for the District of Columbia Jeffrey A. Taylor announced today.

The four-count indictment, handed down on April 24, 2007, and unsealed today, charges E-Gold Ltd; Gold & Silver Reserve, Inc.; and their owners Dr. Douglas L. Jackson, of Satellite Beach, Fla.; Reid A. Jackson, of Melbourne, Fla.; and Barry K. Downey, of Woodbine, Md., each with one count of conspiracy to launder monetary instruments, one count of conspiracy to operate an unlicensed money transmitting business, one count of operating an unlicensed money transmitting business under federal law and one count of money transmission without a license under D.C. law.

Subsequent to the indictment, the Department of Justice also obtained a restraining order on the defendants to prevent the dissipation of assets by the defendants, and 24 seizure warrants on over 58 accounts believed to be property involved in money laundering and operation of an unlicensed money transmitting business. The restraining order does not limit the E-Gold operation's ability to use its existing funds to satisfy requests to exchange E-Gold into national currency for customers of non-seized accounts, or its ability to sell precious metals to accomplish the same, once approval has been received.

According to the indictment, E-Gold's digital currency, "E-Gold," functioned as an alternative payment system and was purportedly backed by stored physical gold. Persons seeking to use the E-Gold payment system were only required to provide a valid email address to open an E-Gold account - no other contact information was verified. Once an individual opened an E-Gold account, he/she could fund the account using any number of exchangers, which converted national currency into E-Gold. Once open and funded, account holders could access their accounts through the Internet and conduct anonymous transactions with other parties anywhere in the world.

The indictment alleges that E-Gold has been a highly favored method of payment by operators of investment scams, credit card and identity fraud, and sellers of online child pornography. The indictment alleges that the defendants conducted funds transfers on behalf of their customers, knowing that the funds involved were the proceeds of unlawful activity; namely child exploitation, credit card fraud, and wire (investment) fraud; and thereby violated federal money laundering statutes. The indictment further alleges that the defendants operated the E-Gold operation without a license in the District of Columbia or any other state, or registering with the federal government, and thereby violated federal and state money transmitting laws. The indictment alleges that this conduct occurred at various times from 1999 through December 2005.

"As alleged in the indictment, the E-Gold payment system has been a preferred means of payment for child pornography distributors, identity thieves, online scammers, and other criminals around the world to launder their illegal income anonymously," said Assistant Attorney General Alice S. Fisher of the Criminal Division. "This indictment demonstrates that the Department of Justice, in cooperation with its law enforcement partners, will aggressively identify and prosecute those who knowingly enable and profit from transmitting the proceeds of criminal activity, online or offline."

"Douglas Jackson and his associates operated a sophisticated and widespread international money remitting business, unsupervised and unregulated by any entity in the world, which allowed for anonymous transfers of value at a click of a mouse," said U.S. Attorney Jeffrey A. Taylor for the District of Columbia. "Not surprisingly, criminals of every stripe gravitated to E-Gold as a place to move their money with impunity. As alleged in the indictment, the defendants in this case knowingly allowed them to do so and profited from their crimes."

"Today's indictment is the result of a two and a half year investigation by the U.S. Secret Service Orlando Field Office into an alternative payment system which has largely operated outside of normal banking industry regulations," said Secret Service Assistant Director for Investigations Michael Stenger. "This system has been exploited for more than 10 years by criminals who operate primarily via the Internet. Cooperation among investigators, including the IRS, the FBI and other state and local law enforcement, has enabled us to more effectively address emerging threats and evolving criminal methods, such as the use of electronic or digital currency to facilitate trafficking in illicit goods and services."

"The advent of new electronic currency systems increases the risk that criminals, and possibly terrorists, will exploit these systems to launder money and transfer funds globally to avoid law enforcement scrutiny and circumvent banking regulations and reporting," said Assistant Director James E. Finch, of the FBI's Cyber Division. "The FBI will continue to work closely with the Department of Justice and our federal and international law enforcement partners to aggressively investigate and prosecute any, and all, persons or organizations that use these systems to facilitate child pornography distribution, to support organized crime, and to perpetrate financial crimes."

"This is a new twist on laundering money through unlicensed money transmitters but it is nothing new for financial investigators," said Eileen Mayer, Chief of IRS Criminal Investigation. "The combined investigative skills of the law enforcement partners under the St. Cloud IRS Criminal Investigation and Secret Service Task Force proved to be a brick wall for E- Gold. We are proud to bring our financial expertise to this type of investigation that ultimately unravels fraud."

The conspiracy charge in the case relating to money transmitting carries a maximum sentence of five years in prison. The federal law violation of operating an unlicensed money transmitting business carries a maximum sentence of five years in prison. The D.C. Code violation for money transmission without a license carries a maximum sentence of five years. The conspiracy charge relating to money laundering carries a maximum sentence of 20 years in prison.

The restraining order does not limit the E-Gold operation's ability to use its existing funds to satisfy requests to exchange E-Gold into national currency for customers of non-seized accounts, or its ability to sell precious metals to accomplish the same, once approval has been received.

The case is being investigated by the U.S. Secret Service with the assistance of the IRS and the FBI. The case is being prosecuted by the U.S. Attorney's Office for the District of Columbia and the Computer Crime and Intellectual Property Section of the Criminal Division. Assistance is also being provided by the Child Exploitation and Obscenity Section and the Asset Forfeiture and Money Laundering Section of the Criminal Division.

An indictment is merely an accusation and the defendants are presumed innocent unless and until proven guilty.

Source: U.S. Department of Justice



Just a few comments;


"One count" is almost admitting there is not quite enough there to make the count at all, (when you consider the likes of Martha Stewart or Joe Nachio of Quest, with multiple counts);

"one count of operating an unlicensed money transmitting business under federal law and one count of money transmission without a license under D.C. law",
...yet also state "unsupervised and unregulated by any entity in the world";

"Cooperation among investigators, including the IRS, the FBI and other state and local law enforcement,"....

... so much for mentioning the cooperation egold has given over the last 1.5 yrs. Now let's see if they can fit the round peg into the square hole.

"The restraining order does not limit the E-Gold operation's ability to use its existing funds to satisfy requests to exchange E-Gold into national currency for customers of non-seized accounts, or its ability to sell precious metals to accomplish the same, once approval has been received."

Approval by who???

Absolutely a fine example of the FED at work.http://img.photobucket.com/albums/v...ies/neutral.gif


Posted by: Vera250

Any suggestions on what we...normal folks should do with our E-Gold.....

Move it...where....???

Let it rest in our accounts????

Exchange it...which exchanger???

Any experts here???

Vera


Posted by: clifton

I've listed few exchangers which still work here: http://hywd.info/article834_Bad-Pro...ith-E-gold.html

I would not be panicking too much, but in general it's good idea not to keep large amounts in e-gold


Posted by: golddust

Many programs are now adding ebullion to their accepted currencies; this is largely held to be a 'safe' currency, with an ecurrency card and excellent security features.
I have to agree with Clifton, though this sort of thing 'has been coming' since egold was raided over 1.5 yrs ago, I don't think anyone should panic unless your account is targeted by the investigation.
YOU KNOW WHO YOU ARE, but it's probably too late, if that's the case.
I expect the US is going to require US citizens to provide SS#s now, and/or other ID for US account holders.

golddust


Posted by: Hardlyworkin

As you said golddust a lot of HYIP'S are now in the process of adding ebullion as their primary payment processor and many are useing that as a reason not to pay until the impementation of ebullion.


Posted by: golddust

I am sure it is an excuse to not pay for some programs, but adding an ecurrency processor does involve scripting a payment interface with ebullion and the host must be able to accommodate the change. In most cases neither should be a big problem.


Posted by: bigwoo




Posted by: Hardlyworkin

Thanks for the update bigwoo. For little guys like us this whole egold think probably will have little or no impact, it's the big guys that are going to suffer the most.


Posted by: forwardone

Looks like the Feds have taken a `guilty until proven innocent` stance with e-gold.


Posted by: Hardlyworkin

But they do that with everyone and everything don't they?


Posted by: forwardone

Guess so, but as a non-American I`m no expert on the goings on with them.


Posted by: golddust

Dr. Jackson's response is accurate on so many levels, and he would not be able to make such a statement without having "cooperated" with all the FED agencies he mentions over the last 18 or so months. Nice how the Indictment fail to mention this. This fact is public information.
If you think about it, alleging "ONE" count of a criminal charge is like the FED saying, this is the 'best' they could come up with, and it is usual that 'one count' against anyone in any matter is dismissed, or up for negotiation between attorneys.
The DoJ is protecting its "turf", even if it's sinking sand. They have failed to make their case against egold, they have statutory problems with doing so, and it looks like the other agencies mentioned are doing a pitiful job as well. The fact is Dr. J has bared the facts and now the DoJ is going to proceed with "vigor" because he did.
It is really pathetic to think they have taken over 2.5M in revenue from egold. The criminals mentioned in Dr. J's reply take in and launder these kinds of funds in a day.


golddust


Posted by: Doro Ajani

Considering the current circumstances regarding e-gold's indictment, there are many exchange agents who are holding on to their reserves of other digital currencies in order to be able to process exchange requests that carry less risk.

This means that a number of them aren't buying e-gold right now, and a number will be selling as much of it as they can until a final legal determination is made about E-Gold, Ltd.

While tis makes sense for those exchange agents, there are going to be a lot of e-gold account holders who'll be having a difficult time getting exchange requests for their e-gold into other digital currencies, or national currencies, fulfilled as a result.

It took me a day to figure out a way to securely address that problem for those e-gold account holders that are affected, but people will have to contact me privately. I'm not posting this method in any public discussion forum.

Here's a transcript of a motions hearing that took place in Dec. 2005:

http://www.e-gold.com/docs/Transcripts122905.pdf

With respect to HYIP admins and posters in HYIP forums in general:

Looks to me that a lot of people have only been using e-gold to the exclusion of other digital currencies, like e-bullion, pecunix or e-dinar, and are just now starting to explore alternatives.

There are some who have maintained accounts with multiple digital currencies and online payment services for years, just in case something like this happens.

Think about the number of digital currencies and online payment services that have gone out of business in the last few years:

OSGold
Standard Reserve
Evocash
IntGold
EMO

The founders of Neteller were indicted, as well as the founders of Gold Age.

It seems that the moral is not to keep all of your gold in one vault.


Posted by: golddust

Not surprising the next release from the DoJ:



Quote:
FOR IMMEDIATE RELEASE
THURSDAY, MAY 3, 2007
WWW.USDOJ.GOV
TREASURY CONTACT: MOLLY MILLERWISE
PHONE (202) 622-2960
DOJ OPA (202) 514-2007

2007 National Money Laundering Strategy Released

WASHINGTON – The U.S. Departments of Justice, Treasury and Homeland Security today joined together in issuing the 2007 National Money Laundering Strategy, a report detailing continued efforts to dismantle money laundering and terrorist financing networks and bring these criminals to justice.

“The 2007 National Money Laundering Strategy is a direct result of close cooperation by the Departments of Justice, Treasury and Homeland Security, along with our foreign counterparts, and signifies our collective commitment to fight money laundering,” said Assistant Attorney General Alice S. Fisher of the Justice Department’s Criminal Division. “Implementation of this strategy will greatly assist in efforts to seize and forfeit millions in illegal proceeds that flow through the international financial system.”....

read more


Posted by: Doro Ajani

I think that e-gold/OmniPay were set up for this indictment by the US government.

Issue 1: There was never a final determination made by the US government as to whether or not OmniPay was required to register as a money services business and/or acquire a money transmitter's license.

As an exchange agent, OmniPay was routinely fulfilling exchange orders for other exchange agents and general e-gold accountholders by bank wire to and from the e-gold system. They were engaged in this business for several years.

I find it hypocritical that they are being prosecuted for not having either now, but I'm not suprised.

You've got a privately issued digital currency backed by precious metals, and the accounts are private. Managed properly and used in conjunction with a good quality stored value debit card, with or with out the MasterCard or Visa logo, along with a network of reliable exchange agents, every e-gold accountholder could greatly reduce, if not eliminate, the need for the use of a personal bank account or credit card.

How many more people would it take to figure out how to do this, before the US government starts to have serious concerns about this situation? E-gold and OmniPay have been in operation for about 11 years.

Issue 2: The servers that maintained the e-gold system should never have been physically located in a place under US jurisdiction. This tactical error is what allowed for the 2005 raid by the Secret Service. The Florida location should have been a field office to handle customer service issues.

My conclusion: For e-gold to survive, they must be legally domiclied in another jurisdiction. If there is an attempt to remain in the US, they will be destroyed, either by conviction on the charges in the indictment, or through being bankrupted in the process of defending against the charges.


Posted by: Hardlyworkin

Very well put Doro Ajani.


Posted by: golddust

Yes, I agree Doro, but egold will remain a 'puppet' until legal due process is complete. Oh and as to this:
Quote:
If there is an attempt to remain in the US, they will be destroyed, either by conviction on the charges in the indictment, or through being bankrupted in the process of defending against the charges.

It is not uncommon for the US to make baseless charges in order to prolong the process, requiring liquidation. Guess who all the booty would belong to then? Don't forget, the US has already looted egold's bank account for a measly $1.7M.
Unless I'm missing something, I have to assume egold is operating on the 'thin' side right now.



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