Fraudster – Anonymous T on Online Money Laundering

In this 12th episode of our Cat & Mouse podcast, we spoke with yet another online fraudster we met on the dark web.

We’ll call them Anonymous T, and as you will read in these excerpts, they focus on money laundering.

Here are five key things we learned from the interview:

#1 Money Laundering Tactics Adapt to Geography

One of the reasons Anonymous T is successful in money laundering is thanks to their understanding of local legislation. As they put it: 

“It depends on where you are. It’s really up to the tax authority and how much research they do on individuals. Let’s say in places such as the Canary Islands or the United Arab Emirates, or I would say in some Middle Eastern countries, you can have a source of income outside from the country and they don’t really make you account for it. They don’t really get into that as long as you are there.”

#2 Crypto and Coin Tumbling is a Big Part of Their Operation

One of the key goals for modern money launderers is to convert profits into cryptocurrencies as soon as possible.

“If you are into any kind of carding or you offer a service and if you get paid in crypto such as Bitcoin, then you’re in a good position because turning bitcoin or crypto into legitimate-looking funds is rather easy.”

But cryptocurrencies by themselves aren’t necessarily enough. You also need to hide your tracks, notably using coin tumbling services, which charge 2 to 3% of the money converted.

#3 Turning Coins Back Into Forex is Also Part of the Challenge

Converting and tumbling funds into crypto is only a small part of the money launderer’s task. They then need to make these coins liquid by converting them back into real-world currencies.

“You can meet up in person with someone who provides cash for the coins. There’s a risk and of course because you have to launder some of the money in a way that the tax authority won’t see it. If you buy an expensive house or car, then you have to be accountable for those expenses and then if you are not accountable then you can be a target for the tax authorities.”

#4 Laundering is Ubiquitous on Gambling Sites

One good way to launder money, according to Anonymous T, is to target iGaming websites such as online casinos.

“ So, they know that if they invested a specific amount, they get back like 94% in the long run. If they lose a certain percentage, it’s okay because it’s still a legitimate source of income.”

A problem is that gambling sites can sometimes be complicit:

“When you get flagged, some gambling sites might not even talk to authorities in that sense because they think that, you know, it’s a person who is just spending their money. It is also their business, their interest, to keep the customer journey quite frictionless and the user experience high. So, they tend to ask questions when it’s ultimately only really necessary.”

#5 Laundering Money Businesses are Part of the “Old-School”

At least according to Anonymous T, fewer money launderers go through the hassle of creating an entire fake operation to appear legit.

“It’s quite heavy in terms of manual effort heavy because then, you have to create fake invoices, fake customers, etc… Some people might not even go that length if they think that it’s easier for them to just set up a business in a more relaxed jurisdiction like Cyprus and the EU or you can go to other countries around the world even Hong Kong, Indonesia or the UAE and they allow you to create a business with really low taxation and ownership structure. As long as you don’t appear in things like the Panama Papers, you should be fine.”

Key Takeaways – Keeping an Eye on AML in iGaming

If we are to believe Anonymous T, money laundering is present everywhere. But there’s one particular place fraud managers should stay focused on: online gambling sites. It’s something we’re very proud to help with here at SEON, whether it’s by monitoring transaction volume, or by supporting a complete user profiling during iGaming onboarding.

Click here to learn more about how SEON can help with AML fraud detection.

You might also be interested in reading about:

• SEON: How to Use KYC Verification for Fraud Detection & Prevention
• SEON: Identity Proofing: What Is It & How Can It Prevent Fraud?
• SEON: Alternative Credit Scoring: What is it & How it Works

Learn more about:

Data Enrichment | Browser Fingerprinting | Device Fingerprinting | Fraud Detection API | Fraud Detection with Machine Learning & AI