Money Laundering Through Virtual Worlds

I'd mentioned this to a friend not long ago - the potential for money laundering through a virtual world such as SecondLife - so I was sort of surprised to find 'Virtual money laundering now available on the world wide web', related to SecondLife:

...There is even a method offered by the virtual universe provider to increase the ceiling on how much cash can be withdrawn at one time. Are they facilitating money laundering? We cannot say, but imagine this scenario:

• I open 15 to 25 accounts at the virtual universe website, all with counterfeit identification. I fund the accounts with narcotics proceeds cash, all patiently deposited at the available ATMs by my smurfs.
• I then purchase some virtual real estate from a co-conspirator, as a partnership of my bogus identities, and funnel all the virtual purchase money into his account.
• The "seller" can then access these funds, either through ATMs, or through a bank. Perhaps I open a small bank account, using bogus ID,and obtain cashiers' cheques with my now-converted "virtual" profits. Is this a great way to move criminal profits ? You bet it is.

Have they created a " financial institution" as the term is defined in the USA PATRIOT Act of 2001 ? It would seem that the answer is yes. Let us see just how long regulators and law enforcement allow this scheme to exist before taking action...

It is true to an extent. Is it happening? Maybe, but I doubt it is a very practical method for people to launder money easily - the limits. At best, an account can purchase $10,000 US but sell only $5,000 US a day. So - if we say 25 accounts are opened, as suggested, the limitation means only $125,000 can be withdrawn per day, while $250,000 can be purchased. That sort of activity going through PayPal is bound to get some attention from someone- and in the long term could be a risky venture because each bit of counterfeit identification and credit card information is a liability. In other words, it doesn't seem very credible. There are other time tested ways.

Construction of skyscrapers, like in Panama, is probably a better way to handle things still. If you're dealing in big numbers and don't want to get caught, a big project is the way to go. Down in Trinidad and Tobago, we see it when people get caught - which seems to be as often as when governments change.