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0 pointsakanet7y ago0 comments

Your mistake is in thinking that the money laundering is achieved by, say, generating a credit card charge for FOO when the item sold was BAR. Not so - the money laundering is in opening many merchant accounts purporting to be for selling FOO, generating profit sanitized as "clean," moving those profits between banks, and essentially deceiving payment processors to generate a profit.

This was, in fact, one of the actual mechanisms brought to bear against Backpage. Certainly the indictment was motivated by, you know, underage sex trafficking, but the enforcement mechanism used to achieve a verdict was mostly money laundering. You can read the indictment yourself: https://www.justice.gov/file/1050276/download. How many counts of trafficking vs money laundering do you see?

And finally, no, they are not "selling different content through other processors." These processors' entire business model is to create "legitimate," totally unrelated transactions to the credit card authorities, to take a cut, and pass back the funds to the merchant. I believe Backpage was instructing people trying to purchase ad inventory to go to a portal to purchase dog food for a while.

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vilhelm_s7y ago

No, this is not what Backpage was prosecuted for. If you look at the indictment in your link, the money laundering counts for Backpage were:

Counts 53-62, Concealment Money Laundering "conduct ... a financial transaction which in fact involved the proceeds of ... unlawful activity knowing that the transaction was designed ... to conceal and disguise the nature ... of the specified unlawful activity"

Counts 63-68, International Promotional Money Laundering "transported ... funds .. with the intent to promote the carrying on of ... unlawful activity"

Counts 69-93, Transactional Money Laundering "engage in a monetary transaction in criminally derived property"

The point is that all of these require an underlying unlawful activity. Prostitution is illegal, and therefore it is also criminal to handle money in a way that hides that it's related to prostitution. But selling porn is legal, so the chain payments would not violate the same laws.

caruana7y ago

My point is the issue is not as black and white as you are making it out to be (hence, don't be an alarmist). All things are subject to interpretation and your position attempts to definitively categorize this activity as fraudulent behavior based on a 1000 word essay by a developer.

moneylaundering7y ago

I work on money laundering cases. What the poster admitted to doing, particularly in the comments section, reads like money laundering. I have used emails more vague than this write-up against defendants in money laundering cases. The underlying crime would be bank fraud, wire fraud, or mail fraud, or all three, depending on how a particular merchant account was opened, how transactions were processed, and who the parties to a contract are (if a financial institution, then bank fraud, and so on).

caruana7y ago

You created your account 3 hours ago, with a creative name and then annonymously post you work on money laundering cases ... As if that is supposed to add credit or show some sort of background. You are anonymous, don't try and take some high ground to reinforce an invalid argument.

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akanetOP7y ago

Cascade billing was literally named by the Backpage prosecution as money laundering.

nwsm7y ago

What if they just default to the last method? Is it then no longer 'cascade billing'?

Or are you saying the psuedo-crypto currency is money laundering?

bumholio7y ago

> essentially deceiving payment processors to generate a profit.

That's not an illegal act, unless you can cite relevant statutes being broken. It's a contract breach.

Your whole analogy to Backpage breaks down without the initial illegal action that produces the revenue stream and sets in motion the need to launder the money.

akanetOP7y ago

You are being silly - breach of contract to deceive payment processors IS wire fraud and bank fraud, which are specific named federal crimes which cover exactly this use case. If you like, here's an excerpt from the Backpage indictment:

"the People now allege that Defendants conspired to orchestrate a bank fraud by misrepresenting to credit payment processors that they were not processing transactions from Backpage, and this misrepresentation would trigger a release of funds from banks. The overt acts alleged clarify that Defendants created multiple classified websites, and when applying for (at least one) merchant account, Defendant Ferrer omitted any reference to Backpage, despite intending to process Backpage transactions through the account. The People allege that credit payment processors, along with American Express, would not have knowingly processed the payments for Backpage and the banks would not have released funds absent Defendants’ trickery."

I encourage you to look through the sections concerning money laundering in the California indictment: https://www.oag.ca.gov/system/files/attachments/press_releas...

bumholio7y ago

I think you should carefully read your quote - it includes the word "Backpage" four times, as in the illegal source of funds that created the laundry opportunity. Breach of contract with payment processors is certainly NOT wire fraud by itself, that's an absurd statement.

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0 pointsakanet7y ago0 comments

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vilhelm_s7y ago

No, this is not what Backpage was prosecuted for. If you look at the indictment in your link, the money laundering counts for Backpage were:

Counts 63-68, International Promotional Money Laundering "transported ... funds .. with the intent to promote the carrying on of ... unlawful activity"

Counts 69-93, Transactional Money Laundering "engage in a monetary transaction in criminally derived property"

caruana7y ago

moneylaundering7y ago

caruana7y ago

3 more replies

akanetOP7y ago

Cascade billing was literally named by the Backpage prosecution as money laundering.

nwsm7y ago

What if they just default to the last method? Is it then no longer 'cascade billing'?

Or are you saying the psuedo-crypto currency is money laundering?

bumholio7y ago

> essentially deceiving payment processors to generate a profit.

That's not an illegal act, unless you can cite relevant statutes being broken. It's a contract breach.

Your whole analogy to Backpage breaks down without the initial illegal action that produces the revenue stream and sets in motion the need to launder the money.

akanetOP7y ago

I encourage you to look through the sections concerning money laundering in the California indictment: https://www.oag.ca.gov/system/files/attachments/press_releas...

bumholio7y ago

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