E-Gold Fraud!
Published by: Codrut Nistor, in News
July23rd2008
If someone asks me about the online payment service to use, I would answer "PayPal" without any hesitation, but things weren't always this way for me. In the past, when I had no access to PayPal, being able to work with E-Gold proved a real life saver. I know I may have been lucky, but I had no problems with E-Gold, unlike others. After all, it doesn't matter if we talk about E-Gold, PayPal or another similar system because, in the end, it all gets down to user attention and experience on the Web, when talking about protecting one's own money. Today, news about a new E-Gold fraud reached me, and the most interesting part is that the heads of this company are being the ones accused!
The long story made short looks like this: E-Gold decided that its transactions management approach, by using the price of gold as a reference, does not make them a financial institution. The bad part is that the US prosecutors didn't buy that, and filed charges of conspiracy to engage in money laundering, as well as conspiracy to operate an unlicensed money-transmitting business, indicting three of the company's directors last year, and now the guilty pleas, submitted yesterday, could prove to be extremely expensive for them, and E-Gold's users.
While Douglas Jackson, E-Gold's principle director, could end up in prison for 20 years, the two others can go as bad as 5 years in prison and $25,000 fines, but the worst part is that the company could get $3.7 million in fines, possibly leading the entire online payment service to a sudden end, but let's hope it doesn't get that far...
On the 21st of July, Douglas Jackson posted on the E-Gold site an article entitled "A New Beginning," explaining some things, but it seems this may be too little, too late, at least for him. For those that were used to use E-Gold for not-so-clean deals, here's the most relevant part:"we acknowledge that e-gold is indeed a Financial Institution or Agency as defined in US law and should be regulated as a Financial Institution. E-gold Ltd. has submitted an application to FinCEN to be registered as a Money Services Business and will be seeking licensure in all states that require it. Most importantly, working in conjunction with US government agencies, we will be exerting every effort to bring e-gold into compliance with US law and regulation as quickly as possible."
Need I say more? "No matter where you are, who you are, we're watching you. Beware!"
The long story made short looks like this: E-Gold decided that its transactions management approach, by using the price of gold as a reference, does not make them a financial institution. The bad part is that the US prosecutors didn't buy that, and filed charges of conspiracy to engage in money laundering, as well as conspiracy to operate an unlicensed money-transmitting business, indicting three of the company's directors last year, and now the guilty pleas, submitted yesterday, could prove to be extremely expensive for them, and E-Gold's users.
While Douglas Jackson, E-Gold's principle director, could end up in prison for 20 years, the two others can go as bad as 5 years in prison and $25,000 fines, but the worst part is that the company could get $3.7 million in fines, possibly leading the entire online payment service to a sudden end, but let's hope it doesn't get that far...
On the 21st of July, Douglas Jackson posted on the E-Gold site an article entitled "A New Beginning," explaining some things, but it seems this may be too little, too late, at least for him. For those that were used to use E-Gold for not-so-clean deals, here's the most relevant part:"we acknowledge that e-gold is indeed a Financial Institution or Agency as defined in US law and should be regulated as a Financial Institution. E-gold Ltd. has submitted an application to FinCEN to be registered as a Money Services Business and will be seeking licensure in all states that require it. Most importantly, working in conjunction with US government agencies, we will be exerting every effort to bring e-gold into compliance with US law and regulation as quickly as possible."
Need I say more? "No matter where you are, who you are, we're watching you. Beware!"
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One comment on E-Gold Fraud!
On 11/24/2009 at 6:27 pm Matt said:
My advice to anyone would be to stay far clear of E-Gold. E-Gold is a company based solely on fraud and deceit. Oh sure, you are able to set up an account with them, deposit funds at an outrageous commission rate through a broker, and then even transfer those funds to other accounts with whom you wish to do business. But that is where the buck (or in this case gold) stops, so to speak. Try and withdraw your money! E-Gold offers no such easy facility to do so. In order to actually cash out, you have to go through yet another broker who will again charge you an outrageous commission to do so. In short, you lose big time as you pay more than 15-20% commission on the transaction, not to mention the huge additional "holding fees" which E-Gold charges on the funds they hold for you, which can amount to as much as 10% of your balance per month. Yes, believe it! So again my advice is to stay way clear of E-Gold and the group of criminals which run it.
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