Cyber criminals are using online gambling websites to launder money, according to research compiled by McAfee. Their head security researcher Brian Krebs believes that these cyber criminals are targeting gambling sites as part of their scheme of laundering money through legitimate bank accounts all around the world.
Banks are now more vigilant about online money movement, and have methods in place to catch laundering, which is where online gambling sites come into the picture. By laundering dirty money through these websites, criminals come out the other side with legitimate money that can be tracked, authenticated and approved by major banks all around the world.
Authorities are able to track such transactions through licensed gambling operators, but they do not have a chance when it comes to unlicensed gambling sites. And with unlicensed sites outnumbering the licensed ones, the online gambling world is a money launderer’s paradise. There are 25,000 unlicensed sites out there, and all of them could be targets for laundering millions of dollars on a monthly basis.
Two Laundering Methods:
With so many unlicensed gambling sites on the market, many of whom allow the use of Bitcoin and other anonymous payment methods, tracking how users fill up their accounts is next to impossible. After an account is filled up, the “gambler” can place the requisite number of bets necessary, win or lose some money, and withdraw the rest into a legal bank account with no one being the wiser.
The second method for laundering money through a gambling site involves using the sites as a tool to pay for illegal goods. For example, someone can purchase items by transferring their gambling winnings to the account of the seller. This allows the seller to claim the received money as tax free gambling winnings, when it is actually payment for goods or services.
While a few gambling sites may be in on the schemes, most companies are unaware that their site is being used to launder money.
For a detailed look at these money laundering schemes, click here to read the original PDF document published by McAfee.