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Friday, 2 February, 2001, 17:36 GMT
Money laundering in cyberspace
![]() International experts on money laundering say the internet is especially vulnerable to abuse by criminals
by BBC News Online's David Schepp
In a tactic as old as banking itself, criminals have always used banks as a sure-fire way to launder money gained through illegal means. But with the advent of internet banking, "following the money" to locate and prosecute money launderers and criminals has become more difficult than ever. Money laundering, which involves disguising the origins of illegally obtained cash and then transforming it into apparently legitimate investments, is bolstered by the near anonymity that can sometimes be achieved through internet communication.
But, the group says, in the case of internet banking, the difficulties "are increased if the procedures for opening [accounts] are permitted to take place without face-to-face contact..." International access FATF, set up by the G7 group of major industrialised nations, also noted that worldwide access further complicates detection of fraud. It is not always clear whether an account is accessed from a country other to where the money is held, and account managers may simple be too busy to monitor all the activity of individual account holders. Gambling with illegal cash It isn't just online banks that are vulnerable. Internet-based gambling operations can also act as a haven for illegal cash-washing operations. The FATF said there is evidence that criminals are using online casinos to commit crimes and launder the proceeds. Aside from the problems inherent in internet banking, online casinos further complicate tracking of questionable transactions because gambling records are software based and at the gambling site - often located offshore. That makes evidence gathering more difficult because the records are harder to find and may not exist at all. Combatting cyber crime In issuing its report, the FATF said countries could take several measures to counter money laundering. They include:
In June, members of the G7 group of industrialised nations published a list of countries that made money laundering easy, and threatened tough action and sanctions if their governments failed to join international efforts to crack down on the criminals.
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