[E-Lang] Fw: U.S. Secret Service raids E-Gold currency exchanger

[Jonathan S. Shapiro]

----- Original Message -----
From: "David Farber" <dave@farber.net>
To: <ip-sub-1@majordomo.pobox.com>
Sent: Saturday, March 31, 2001 1:55 AM
Subject: IP: U.S. Secret Service raids E-Gold currency exchanger


>
> >Date: Fri, 30 Mar 2001 14:18:56 -0500
> >From: Declan McCullagh <declan@well.com>
> >
> >http://www.wired.com/news/politics/0,1283,42745,00.html
> >
> >    Secret Service Raids E-Gold
> >    by Declan McCullagh (declan@wired.com)
> >    11:10 a.m. Mar. 30, 2001 PST
> >
> >    WASHINGTON -- The Secret Service has raided a New York state business
> >    that exchanged dollars for grams of the digital currency called
> >    e-gold.
> >
> >    A bevy of agents from the Secret Service, Postal Service and local
> >    police recently detained the owners of Gold-Age, based in Syracuse,
> >    and seized computers, files and documents from the fledgling firm.
> >
> >    U.S. Attorney Daniel French said Friday that the investigation
> >    involved charges of credit card fraud. "We haven't brought charges
> >    yet," French said. "We're in the investigative phase."
> >
> >    Gold-Age owner Parker Bradley says that during his eight-hour
> >    interrogation on March 12, the Secret Service seemed less interested
> >    in credit card fraud and more interested in the mechanics of e-gold.
> >    Until last year, Bradley accepted credit cards and paid out e-gold,
> >    but said he quit because too many people used stolen credit cards
when
> >    conducting business with him.
> >
> >    "The interrogation became less about me and more about politics and
> >    e-gold," Bradley said. "They were trying to get me to blame e-gold
for
> >    fraud. Just to be blunt, these guys have no clue about how e-commerce
> >    works, how e-gold works or what I was doing."
> >
> >    E-gold is a 5-year-old firm based on the Caribbean island of Nevis
> >    that provides an electronic currency backed by physical metal stored
> >    in vaults in London and Dubai. The company says it has 181,000 user
> >    accounts and stores about 1.4 metric tons of gold on behalf of its
> >    customers.
> >
> >    Bradley's Gold-Age company, which he ran with his wife out of their
> >    home until the raid, was one of about a dozen e-gold currency
exchange
> >    services: He took dollars and credited grams of gold, silver,
platinum
> >    and palladium to a customer's account, less a modest fee.
> >
> >    [...]
> >
> >    Still unclear is why the raid took place. French indicated that it
> >    could be more than a routine credit card investigation, saying "at
> >    this point, it's being investigated as a credit card fraud."
> >
> >    One possibility is a broader investigation directed at some users of
> >    e-gold, which is less anonymous than cash but more anonymous than
> >    credit cards. Former Treasury Secretary Lawrence Summers has warned
of
> >    malcontents using the Net and encryption to dodge taxes, and it's
> >    possible that the feds don't exactly approve of a system that's more
> >    privacy-protective than the heavily regulated banking system.
> >
> >    Current federal regulations require banks and credit unions -- about
> >    19,000 in all -- to inform federal law enforcement of all
transactions
> >    $5,000 and above that have no "apparent lawful purpose or are not the
> >    sort in which the particular customer would normally be expected to
> >    engage."
> >
> >    Because e-gold is not a bank that lends money -- it's more akin to a
> >    warehouse that stores gold on behalf of its customers -- it's not
> >    covered by those rules.
> >
> >    Mike Godwin said the raid evokes memories of the notorious Steve
> >    Jackson Games raid by the Secret Service a decade ago, which led to
> >    the formation of the Electronic Frontier Foundation.
> >
> >    [...]
> >
> >
> >
> >
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