BASSETERRE, St Kitts, April 30, 2007 – The bosses of an offshore company registered in Nevis are facing money laundering charges in the United States.
They were charged Friday with four crimes involving conspiring to launder monetary instruments or operating unlicensed money-transmitting businesses from 1999 to December 2005.
Assistant Attorney General Alice S. Fisher of the Criminal Division and US Attorney for the District of Columbia Jeffrey A. Taylor allege that E-Gold Ltd and Gold & Silver Reserve Inc have been operating an Internet based business offering a currency exchange called OmniPay which could be used for money transfers, paying bills, and issuing cheques. The company said its reserves were backed by actual gold bullions which are deposited in Dubai and Switzerland.
The concern by the American authorities is that the unregulated operation caters to criminals moving around money.
They say that there are no checks and balances. Customers needed only to provide an e-mail address to open an account. The indictment, handed down in Washington DC by a grand jury, accused some customers of using fictitious names such as “Mickey Mouse,” “Donald Duck” and “No Name” and could conduct international transactions without any government oversight.
The charges follow a December 2005 raid on the company’s offices and seizure of electronic records detailing millions of accounts, said James Glendinning, of the Secret Service’s Orlando office. The probe, he said, was a spinoff of a 2004 international crackdown on Internet identity thieves who also used E-gold to receive payments.
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 four-count indictment, handed down on April 24, 2007, and unsealed Friday, charges E-Gold Ltd; Gold & Silver Reserve, Inc.; and their owners Dr. Douglas L. Jackson, of Satellite Beach, Florida; Reid A. Jackson, of Melbourne, Florida; and Barry K. Downey, of Woodbine, Maryland, 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 DC law.