Money Laundering via digital books
13 May 2019 09:19
Diëgo Crijns, AMLC senior advisor
During money laundering training sessions I show a lot of examples of how you can use ordinary things for money laundering. I am often asked “do criminals really do that?”. Therefore, a special example that made the news in February.
A lot of people know that you can buy (expensive) books via facilities such as “Createspace” of Amazon, which books are then printed on-demand. That the author receives a part of the sales price may also be considered common knowledge. It appears that it is getting easier for criminals to misuse this type of service.
An author in the US received his annual statement from Amazon and appeared to have written a very expensive book ($555) that also sold very well. In twelve weeks sales totalled $24,000. However, he did not write this book! It emerged that an account had been opened in his name at Amazon, and that a book had been offered for sale on Amazon sites in various countries. The content of the book was a rubbish text generated by a computer.
By obtaining his social security number (which is not difficult if you consider how often you must provide a copy of your ID etc.) criminals succeeded in convincing Amazon that the sales proceeds of the new books were not to be paid via the publisher of this well-known writer, but directly to his own account. Sales went very well and Amazon rightly transferred 60% of the sales price. That is to say: to an account of the criminals and not of our well-known author. Nobody ever asks questions about this because a payment from Amazon in relation to sales is very normal. Of course, all the buyers’ bank accounts were in countries, other than the country of the recipient’s bank account, so it was difficult for banks, regulators and the police to check the transfers quickly. The buyers will not complain because they belong to the criminal organisation. In many cases the payments for the books came from bank accounts that had been hacked, but also from unknown foreign companies. You could discuss whether this was actually set up for the purpose of money laundering or whether the criminals only wanted to empty the bank accounts they had taken over illegally. But it is a simple way that can be used for both purposes. As already mentioned, who would wonder if an international transfer by Amazon with the description ‘sales proceeds books’ perhaps concerns criminal money?
However for the criminal the disadvantage of this
system is that you can follow the money trail (to the well-known, difficult to access foreign countries, of course, they don’t make it easy for us) and that 40% is lost due to ‘money laundering costs’.