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Secret Service Raids Gold-Age

michael posted more than 13 years ago | from the real-world-meets-cyberpunk-fantasies dept.

The Almighty Buck 277

Wired has a story about the Secret Service raiding one of the several firms that promise to exchange your old-fashioned greenbacks for even more old-fashioned gold - the idea being that E-gold is a better medium of exchange than those boring currencies backed by national governments. Unfortunately it seems that the primary use of e-gold seems to be turning stolen credit cards into cold, hard, ca.... errr, gold. (Update: 03/30 5:19 PM by michael : The headline has been changed to make it clear that the raided company is a company distinct from E-gold. The business relationship between the two companies is not entirely clear.)

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277 comments

Crap!! (5)

bjorky (78181) | more than 13 years ago | (#326232)

Does that mean my e-pyrite is worthless too?

-----

What a load of crap (5)

blazin (119416) | more than 13 years ago | (#326233)

The secret service should have to reimburse E-gold based on the average days' worth of business for each day that they had the equipment that kept the business from running.

What is the significance here? (2)

7dragon (33238) | more than 13 years ago | (#326234)

Is it economically dangerous because they offer gold or were they stealing credit cards?

Hmm... (3)

bdowne01 (30824) | more than 13 years ago | (#326235)

Does this give new meaning to the typical "Gold Card"? And when do Platinum card holders get their share?

theory (1)

Diplomat73 (323901) | more than 13 years ago | (#326236)

It seems that this theory has been tried out before. From what I know this did not work. The company was Crypto punks. This company was a pioneer in crypto in the early 90's. Anyway they told people that people could do transactions with them using crypto credits. I don't now what happened to this company. It was mentioned in the book Crypto . Does anyone know what happened??

Money Laundering comes to e-commerce (1)

swerdloff (16397) | more than 13 years ago | (#326237)

I'm failing to see why money laundering is slashdot worthy.

I thought the e- in a company name was no longer the only criteria for that sort of notice?

Mind you, online money laundering is a dot com startup that probably did pretty well for itself. Wish I'd thought of it back in the boom days.

this isn't e-gold's fault (5)

perdida (251676) | more than 13 years ago | (#326238)

The same government that is slavering over the lucrative uses of e-currency doesn't like it when an old technology such as credit cards comes into contact with electronic currency creates crime.

Well, fuck them. Go develop a more secure credit card system.

Or get rid of credit cards all together.

As I think about it, yes, please, do! The cred card has been one of the most abusable, fraud-prone forms of transaction since its inception. it creates lots of ways of creating debt that wouldn't otherwiose be there by encouraging people to spend money they don't have at exorbitant interest rates.

I do not have a single credit card. Contrary to popular opinion it has never stopped me from renting a car or getting a hotel room. I do have a credit history, too, if I need REAL credit like the kind for buying a house or other major investments.

Secret Service - in a RAID? (1)

SecretAsianMan (45389) | more than 13 years ago | (#326239)

I thought the job of the Secret Service was merely to protect the president. Is this wrong? If so, what exactly is their responsibility? If not, on whose authority did the raid take place, and why was it not the FBI? I'm a little confused here.

--
SecretAsianMan (54.5% Slashdot pure)

Re:Money Laundering comes to e-commerce (1)

FortKnox (169099) | more than 13 years ago | (#326240)

No kidding. The mafia has been doing this for years! They just haven't used the internet medium yet (at least no one knows that they have yet) ;-)

Secret Service (5)

Speare (84249) | more than 13 years ago | (#326241)

Before people ask, "why are the US President's bodyguards involved here?"

The Secret Service are a branch of the US Department of the Treasury.

A Secret Service [ustreas.gov] FAQ: The Secret Service has primary jurisdiction to investigate threats against Secret Service protectees; counterfeiting of U.S. currency or other U.S. Government obligations; forgery or theft of U.S. Treasury checks, bonds or other securities; credit card fraud; telecommunications fraud; computer fraud; identify fraud; and certain other crimes affecting federally insured financial institutions.

Re:Secret Service - in a RAID? (4)

Speare (84249) | more than 13 years ago | (#326242)

The Company in question... (5)

Cranston Snord (314056) | more than 13 years ago | (#326243)

The company in question is GoldAge, not e-Gold...if you take a look at the site, it does beg the question of legitimacy... http://www.gold-age.net/ga-post-index.html [gold-age.net]

Possible Money Laundering (2)

TwitchSGL (265659) | more than 13 years ago | (#326244)

It is entirely possible that some illegitimate clients are laundering thier money through the e-gold service. Especially if it's tax free - a very plausible way to dodge the IRS. The buisness is being investigated under the guise of credit card fraud - so they can look into clientelle that maybe using the service as a mony laundering scheme. Hmmm... sounds like a Tom Clancy novel.

Lemme Get This Straight (2)

zpengo (99887) | more than 13 years ago | (#326245)

So I type in some numbers off a piece of plastic into my web browser, and someone sends me chunks of gold?

Yeah, okay.

Re:this isn't e-gold's fault (2)

Sc00ter (99550) | more than 13 years ago | (#326246)

Then how do you get a rental car, or get a hotel room? Short of giving them cash of course.

I don't have a credit card either, but I do have a check card.


--

Credit Card ATMs -- no PIN required (1)

mr_gerbik (122036) | more than 13 years ago | (#326247)

I recently took a trip to Lawrenceburg Indiana to go on a gambling riverboat. To my suprise, all the ATMs in the place took credit cards without needing a PIN. The machine must have acted as a point of sale rather than a cash machine. So when it comes down to it, anyone with a stolen card could withdrawl money off the card with no PIN needed. The machine charged a percentage fee for each withdrawl.. unlike the regular $2.00 ATM fees. Off the top of my head I believe the charge was $2.00 + 2.9%. Anyways.. I found these ATMs shocking.. anyone have any experience using one?

-gerbik

Hmm... cross with Cryptonomicon... (2)

Catiline (186878) | more than 13 years ago | (#326248)

You know, that was an idea doomed for failure. Sure, anybody can just come up with e-currency, but backed by gold? Did I miss something here? Doesn't Cryptonomicon say gold is the death of value? After all, none of the big world goverments find in necessary to back their currency with real goods (be it metals, produce, etc). It's a real problem to do so. When you base your currency off of a real item, you can't just print more and more with impunity whenever you need some. And man, that really holds you back with e-cash, 'cause bits are reproducable for free!

Are they going to raid Lichtenstein too? (1)

HerrGlock (141750) | more than 13 years ago | (#326249)

Are the islands U.S. property? How do the agents know that e-gold has NOT reported over $5,000? If the details are not there, then they should bust ALL on-line banking firms, whether or not they are FDIC insured or credit union types who do not have a policy of reporting.

I'm sorry, without more information, this piece of news is just flamebait in and of itself.

Please post an addendum as soon as you get it.

DanH
Cav Pilot's Reference Page [cavalrypilot.com]

Credit Cards aren't all bad (1)

Dragonmaster Lou (34532) | more than 13 years ago | (#326250)

The problem with credit cards is that stupid people use them stupidly. I'm the kind of customer the credit card companies hate -- I never carry a balance and always make sure I have enough cash in my bank accounts to pay the bill in full. Actually, I used to use a debit card for everything instead of a credit card for this reason, but since I got one of those cards with cash-back bonuses, I use that more ofen.

bullies (5)

deran9ed (300694) | more than 13 years ago | (#326251)

Its no surprise the Secret Service has Gone too far [antioffline.com] , but what I see happening is, they may be concerned with persons, embezzling money than using companies such as e-gold, as a means of hiding their traces.

Regardless of what the company actuall does, for those who don't keep up on privacy issues I suggest you read up on James Bell and how his "Assassination Politics" [antioffline.com] paper landed him in jail for using the same kind of anonymouse untraceable methods in theory...

As for the Secret Service using "credit card" fraud as an excuse, how come they never raid the businesses of adult sites all over the Internet? Or Amazon when someone cards them? Shady tacticts...

Debit card (2)

perdida (251676) | more than 13 years ago | (#326252)

which i also hate, as it levies fees just to put my identity on my money when I spend it, which is not what I want to do anyway.

I never spend money I haven't got, except for on a major investment. The only time I did that was for student loans.

-perdida

How rational is this? (4)

zpengo (99887) | more than 13 years ago | (#326253)

People are trading credit card numbers not for gold, but for an electronic (i.e., imaginary) statement that their money went toward gold somewhere in the world? It's an absurd notion. Why trade something tenuous (a credit card number) for something even more tenuous (electronic gold)?

The world is becoming disturbingly postmodern. In the beginning there was bartering. Then people started using precious metals to represent the value of objects. Then they started using pieces of paper to represent the metals. Then they started using plastic cards to represent pieces of paper. Now they're trading that in for a number in a database.

Makes my head hurt.

Re:this isn't e-gold's fault (2)

MillMan (85400) | more than 13 years ago | (#326254)

My "check card" is actually a visa card. It just takes cashola out of my checking account. Works in any situation where you'd otherwise use a credit card (because as far as the business is concerned, it is a credit card).

Great way to get rid of the credit card need...it's nice to have the credit card around for emergencies, though.

Re:The Company in question... (2)

pug23 (167080) | more than 13 years ago | (#326255)

Just because they don't have a very professional looking website, doesn't mean it isn't legitimate.

Gold Bar (1)

dedair (238106) | more than 13 years ago | (#326256)

I thought it was illegal to own a gold bar in the United States. I know it says bullion, but it also states that the metals are also in bars. If the gold is stored outside of the U.S., are there legal issues?

Re:Money Laundering comes to e-commerce (1)

pcidevel (207951) | more than 13 years ago | (#326257)

I think the slashdot worthy part is in the article.. namely the fact that they were raided by the secret service and put out of buisiness but there were no arrests made and no proof that the buisness had done anything wrong.

Re:Secret Service - in a RAID? (3)

sacherjj (7595) | more than 13 years ago | (#326258)

They actually have more coverage than just government protection:

"The Secret Service was established as a law enforcement agency in 1865. While most people associate the Secret Service with Presidential protection, our original mandate was to investigate the counterfeiting of U.S. currency--which we still do. Today our primary investigative mission is to safeguard the payment and financial systems of the United States. This has been historically accomplished through the enforcement of the counterfeiting statutes to preserve the integrity of United States currency, coin and financial obligations. Since 1984, our investigative responsibilities have expanded to include crimes that involve financial institution fraud, computer and telecommunications fraud, false identification documents, access device fraud, advance fee fraud, electronic funds transfers, and money laundering as it relates to our core violations."
Source: http://www.treas.gov/usss/investigations.htm [treas.gov]

Seems to fall within their coverage to me.

Joe Sacher

Re:Debit card (2)

Sc00ter (99550) | more than 13 years ago | (#326259)

that still doesn't answer my question about renting a car or getting a hotel room..

You give them cash?


--

good riddance (1)

room101 (236520) | more than 13 years ago | (#326260)

Good riddance. I'm sick of the comertials. Who every thought that gold would be more stable than curency (even the US$) is just plain stupid. Just because you can put your hands on a piece of gold, doesn't mean that the price is stable.

bah!

Re:Money Laundering comes to e-commerce (2)

an_mo (175299) | more than 13 years ago | (#326261)

The interesting bit is the use of technology to set up a new gold-convertible currency (as when the Gold Standard [britannica.com] ? [everything2.com] was the rule).

If enough people trust it (and if this is really backed by gold there are no reasons not to) then paper money will become less standard (it won't disappear since it's legal tender) with potentially important consequences such as reduced importance of monetary policy as decided by the Federal Reserve.

Re:this isn't e-gold's fault (1)

Ymerej (12280) | more than 13 years ago | (#326262)

I don't know about hotel rooms, but cash won't work for rental cars. You have to give them your card number so they can put any extra charges on it, or charge you for damages, etc. They won't take just cash to rent you a car.

Re:How rational is this? (4)

pug23 (167080) | more than 13 years ago | (#326263)

The world is becoming disturbingly postmodern. In the beginning there was bartering. Then people started using precious metals to represent the value of objects. Then they started using pieces of paper to represent the metals. Then they started using plastic cards to represent pieces of paper. Now they're trading that in for a number in a database.

You say this as if it were something now. If you have a bank account, your money has been nothing more than a number in a database for tens of years.

Hmmm, Notice how our govt.... (2)

gwizah (236406) | more than 13 years ago | (#326264)

...Strongly opposes all forms of Alternate currency?
Our Government loves the fact that the american dollar (and all electronic variants of it) is one of the strongest forms of currency in circulation today. They will always find a way around allowing anyone to question its value. If the federal reserve declared gold worthless, would it matter? I think the feds have their heads (guess where?) and their hands (in your pockets?) in the wrong place.

hotels (1)

perdida (251676) | more than 13 years ago | (#326265)

I have only had to rent a car twice and both times they took the debit card.

Hotels, some places they take cash with photo ID, some places debit card. I think it is a lot easier out of the country as they really like getting american currency anyway

-- perdida (not wanting to be modded down as over-rated, hence unchecked the +1)

Secret Service's Job (1)

vor (142690) | more than 13 years ago | (#326266)

Not only do they protect the president, they have to fight anything that undermine's United States currency.. counterfeiting, credit card fraud, large money laundering, etc.

Re:What is the significance here? (1)

Monte (48723) | more than 13 years ago | (#326267)

The significance is this: Someone set up a way for people to move their wealth around securely, privately and without governmental knowledge, interference or permission. The government doesn't like what it can't control.

Bradley really ought to count his blessings - they didn't shoot his wife or set fire to the place. An uncommon show of restraint.

Re:Crap!! (1)

erayzer (307107) | more than 13 years ago | (#326268)

"Defenestration" is deforestation, and does not have anything to do with the German word for "window", i.e., "fenster".

Re:Secret Service - in a RAID? (1)

alen (225700) | more than 13 years ago | (#326269)

They are also tasked with investigating counterfeit currency cases and credit card fraud. Personally I don't know why they don't get rid of all federal police forces except the FBI. Give them the power to investigate all federal level crimes. Sounds more efficient to me.

Secret Service Electronic Evidence Guidelines (2)

Bob9113 (14996) | more than 13 years ago | (#326270)

The Secret Service's electrionic evidence guidelines are located here. [ustreas.gov] and include the following information that seems pertinent in this case:
1. * * Networked or business computers
* Consult a Computer Specialist for further assistance
* Pulling the plug could:
* Severely damage the system
* Disrupt legitimate business
* Create officer and department liability

Re:Crap!! (1)

eXtro (258933) | more than 13 years ago | (#326271)

defenestration (d-fn-strshn) n. An act of throwing someone or something out of a window. [From de- + Latin fenestra, window.]

Re:Credit Card ATMs -- no PIN required (1)

LordNimon (85072) | more than 13 years ago | (#326272)

That 2.9% is basically what the riverboat has to pay the credit card company (CC companies charge vendors 2 to 5% of the charged amount), and the $2 probably covers the cost of maintaining the ATM.
--
Lord Nimon

Re:What is the significance here? (1)

Phil-14 (1277) | more than 13 years ago | (#326273)

I wonder, when are the Feds going after Paypal or some other business that's also been a facilitator for people stealing credit cards?

WTF? (1)

sherpajohn (113531) | more than 13 years ago | (#326274)

"Defenestration" is deforestation??? Huh? in French, the word for window is fenetre (sorry I can't do the accent). Me thinks your brain is a bit woody friend.

Going on means going far
Going far means returning

Re:Secret Service (2)

sharkey (16670) | more than 13 years ago | (#326275)

Crimes such as using a $200 bill with Dubya's face on it to pay a $1.50 tab at the Kwik-E-Mart? I about ran off the road laughing when I heard about that one.

--

eF--k (3)

StoryMan (130421) | more than 13 years ago | (#326276)

Look, I know this is Slashdot and not f--kedcompany.com, but I think this proves my infamous August, 1992 hypothesis.

Let me recap: I was a new graduate student at the University of Michigan in Ann Arbor. I was sitting in a coffee shop -- Amer's Cafe on State Street for you fellow Ann Arbor-ites -- and had just ordered an 'Amer's Cap' and settled down to a nice, grungy table with a copy of Wheelock's Latin (for the requisite foreign language requirement), a copy of Hannah Arendt's 'Eichmann in Jerusalem', and a copy of Raymond Carver's collected stories (I was in the MFA program there and dutifully reading through all the Carver, Richard Ford, Tobias Wolf, Bobbie Ann Mason, Joy Williams I could find) and suddenly got a pain in my stomach.

It was an odd pain. And -- sorta like the Woody Allen character in one of his 1980's flicks (Hannah? Misdemeanors?) -- was convinced (beyond a shadow of a doubt) that the pain was, in fact, a tumor and that the death-watch clock had started.

I tried to drink my Amer's cappucino (sp?) without much success. I kept wondering about this weird pain in my gut. I gave up on Wheelock, tried Carver, and decided the pain -- whatever it was -- was driving me batty. It wasn't a bad pain, just a little one. The sort of mild pain that always -- I was certain -- into the sort of pain that caused doctors to say, "Look, it's nothing. Don't worry. Just relax. Come back in six weeks if it's still there." Of course after six weeks you'd be dead.

So I left Amer's, walked down State street, poked my head into Borders, bought a New York Times, and then headed straight for the doctor.

The doctor was an old fat guy who immediately slapped on a rubber glove and told me to pull down my pants and roll on my side.

After he'd done what had to be done he said, "Look, don't worry. You need to relax. Come back in six weeks if the pain is still there."

I walked to the grad library, found an empty desk on the fourth floor, and started to read the Times. I was in a bad mood -- the rubber glove didn't help much -- and I couldn't concentrate. I flipped to the NYTimes business section -- a section I never read -- and there it was in black and white: companies were registering domain names for $70 bucks (it might have been more, I don't remember) and that some of the names were wacky: they were misspellings of common words but the registrants were sure that one day these domain names -- and the web in general -- would be big. Really big. They were like the speculators in the Wild West.

I had a flash that maybe I should register Business.com (no kidding). But then I remembered I was a graduate student and seventy bucks was my walking around money for the *entire month*. So I let that idea slide. (That was my mistake.)

But then I had a second flash -- sitting there in the Harlan Hatcher library and staring out at the campus from my tiny window -- and I said to myself: you know, I bet every business is gonna try to put 'e' before their name. We'll have eLiquor.com. eBeer.com. eCoffee.com. (Since everyone was talking about e-commerce and the promises it heralded.)

And then I had my third -- and last -- flash -- the flash that would become my 1992 hypothesis: that any business with the 'e' in the title will surely be fucked. Maybe not in 1992. Maybe not in 1996. But one day, all these fucking eBusinesses are gonna be fucked. Fucked, fucked, fucked.

eThis, Chief.

And here, today, sitting at my desk, I remembered all this. Remembered my three flashes that morning on the fourth floor of the Harlan Hatcher Graduate library on the campus of the University of Michigan. Remembered my theory about the 'e' before the name. Remembered that it took me six weeks to get rid of that fucking pain in my gut -- three doctors, lots of aspirin and cranberry juice -- until one doctor -- the only one who didn't slap on a rubber glove and turn me on my side -- said, idly, "Have you tried taking some Pepcid?"

Re:e-currency? (1)

alen (225700) | more than 13 years ago | (#326277)

Read your history. During the period of the Articles of Confederation there was chaos.

.... (2)

Conspiracy_Of_Doves (236787) | more than 13 years ago | (#326278)

potential alternate currency systems.
----------

Re:How rational is this? (2)

Hollins (83264) | more than 13 years ago | (#326279)

The companies claim to have actual gold. %100 in support of the currency. Whether they actually do or not is a relevant question, but the nature of the raid as described in Wired indicates that there is some political motive in the actions of the Secret Service. Namely, shutting down an alternative currency that they do not control.

Re:Credit Card ATMs -- no PIN required (2)

Talisman (39902) | more than 13 years ago | (#326280)

"...anyone have any experience using one?"

I was at a strip club once and was sitting at the bar drinking a Corona. The ATM was about 5 feet away from where I was sitting. These two strippers walk over to the ATM with a stumbling drunkard supporting himself on their shoulders. They, stone sober, 'helped' him use his CC to withdrawl what had to be at least $1000. The weird part about this machine was that like the one you saw, it didn't require a PIN and it only allows the person to withdrawl $200 each time. And there's a $5.00 fee everytime you used it...

I swear what I saw was like watching someone getting mugged in an alley, but because it was two hot strippers committing the crime, it didn't seem so bad :)

Re:this isn't e-gold's fault (1)

walt-sjc (145127) | more than 13 years ago | (#326281)

FYI, many "check cards" have daily limits... I found this out with my BOA card. Had over $30,000 in the bank but spent over $700 in one day - the next $15 transaction was denied - I did have a credit card to fall back on, but that really pissed me off... Check with your bank to see if they are as incredibly stupid as Bank of America...

BTW, they do have "premier" accounts that have higher limits, but they still have limits. Bunch of crap IMHO.

Also, check cards do NOT share the same fraud protection as credit cards. That cash is GONE NOW, unless you can get a refund - way different than denying charges and refusing to pay the bill.

Bottom line is that check cards != credit cards in many ways. Check with your individual bank for more info as P&P is different for each bank.

yesterday at the E-Gold headquarters... (1)

TrollFeeder (396384) | more than 13 years ago | (#326282)

1pm: Nobody will catch me LOL ROTFL (Rolling on the floor laughing), gold is untraceable! Stupid Feds will never find me.

1:30pm: LMAO (Laughing My Ass Off) RAOTFL (Rolling Around on the Floor Laughing) All right, 50 more ccs. The rest of the world is stupid, they actually WORK for what they get. LOL.

--
"May the forces of evil become confused on the way to your house"

I met one of the E-Gold guys (2)

Plum (253578) | more than 13 years ago | (#326283)

This was about two years ago. We were sitting in the service lounge at a Honda dealership, and I was sporting my Espanol.com T-shirt. A guaranteed attention-getter back then, he started asking me all about the company, and I explained that we were an international e-commerce company, catering to Spanish speakers worldwide, etc, etc, etc. The company later bombed (reeeealy?), but that's obvious and unrelated.

The guy starts in on this philosophical pitch about the portability of currencies, and how the internet is going to pose serious challenges to consumers wishing to make transactions on a global stage, and how gold, of all things, is the world's best bet to unify the online shopping experience. As such, he entered into the E-Gold pitch, and I started hoping that the work on my Prelude would hurry itself up.

My initial verbal reaction to the E-Gold plan was "oh, yeah, that is an interesting idea", but in the back of my head, I was thinking "Yaaar MatEy, wE be KeeLhAuLin yEr GoLd" and I conjured up images of eyepatches and pirate ships. I wasn't even sure he was making any sense whatsoever, but then again, selling dog shit online [dogdoo.com] would get you VC money back in '99...

Image is vital (2)

Tassach (137772) | more than 13 years ago | (#326284)

I'm not going to trust my money to an online company that doesn't have the professionalism to present a decent image. A con artist can have a professional web page too, so image isn't the only thing to look for. If the bank's web site code is sloppy, what makes you think their accounting software is any better? A sloppy website is the online equivilent of a back-alley business, or wearing torn jeans & a tee-shirt to meet a prospective client.

wait a minute (2)

tvon (169105) | more than 13 years ago | (#326285)

Hey, Slashdot, perhaps you will remember some of the articles youve had in the past about headlines that make wild claims and then give the special circumstances in the fine print? Well, what the fuck are you doing now? The main point of the article about e-gold was NOT the credit card fraud, the owner even states that he stopped accpeting credit cards because of the fraud problem, the point was "why did the secret service raid e-gold?".


so...stop tossing around crap

# Tom von S.
# -------------
# "Nuclear weapons can destroy all life on earth,

Re:Secret Service - in a RAID? (3)

Plum (253578) | more than 13 years ago | (#326286)

If they really were in a raid, I hope it was raid 5.

The federal government... (3)

DavidTC (10147) | more than 13 years ago | (#326287)

has always hated the idea of some sort of personally owned monetary system, ever since (and now I sound like some sort of nutjob) they disconnected the pieces of paper called 'money' from gold or silver. (In direct violation of article 1, section 10 of the constitution, which forbids money from being anything but gold or silver, or exchangable for gold or silver.)

There are several books about people who have attempted to set up private monetarty systems. Pioneers of American Freedom and Men Against the State are two title I remember off hand. In all cases the US has managed to crush such setups using FUD, harrasment, and basically making up charges against the owners. Neal Stephenson has a short story about this, also.

Annoying, I have to get out the door before Atlanta rush hour, so I can't look up these URLs. But all you people who think this is about credit card fraud...it's not. In fact, it's a great thing if credit card thieves buy virtual cash. The credit card used to buy the gold was stolen? Return the cash to the credit card company, and take back the gold. It might be useful to impliment a 48 hour waiting period or something here, and that would be what the feds did if this was about credit card fraud. Of course, I have to wonder what it is people are buying with this, and why we just can't just track what the people have bought with the stolen gold? I mean, the turnaround time, no matter what, has to be faster with using the stolen card directly vs. using it to buy gold and using the gold to buy things. Why not treat it exactly like normal CC theft and arrest whoever pick it up where it's delievered?

However, this has nothing to do with fraud, that's just the excuse. This has to do with threating the power base. The government hates the idea we could stick all our money in inflation free bars of gold. It completely screws up how they think the economy should work.

Got to run, someone look up those URLs. I think disinfo.com has something about this, too. Long story short, the government has a very long history of trying to shut down private monies.

-David T. C.

Welcome to our police state, enjoy your stay (1)

oliphaunt (124016) | more than 13 years ago | (#326288)

"These people are presumptively innocent," said Godwin, an attorney who writes frequently about law and technology. "Even if they are subjects of a federal investigation, the Secret Service should know better than to swoop in and engage in disruptive searches of people they're not ready to arrest."

Sure, they know. But do they care? If a bunch of guys with guns [dupageco.org] show up at your house/place of business and invite themselves inside, does anyone really think that you could stop them from taking your computers?

Of course not. They'll take your computers and your silverware and anything else they feel like taking, because they can. Sure, it's against the law, but unless you can afford [ebay.com] to buy yourself [tompaine.com] a Senator [opensecrets.org] the laws aren't meant to protect you, and the courts [yahoo.com] know it.

What this country needs is a good, healthy, revolutionary war.

Sexy Cops, Again (2)

wardomon (213812) | more than 13 years ago | (#326289)

Isn't a bevy the official unit of measure for showgirls?

A bevy of agents from the Secret Service, Postal Service and local police...

Re:WTF? (1)

erayzer (307107) | more than 13 years ago | (#326290)

Sheesh, so it is... where the hell did I get deforestation from? Yes, Fenetre (missing accents) is French for window, but I was talking about German, and in German, window is fenster.

Attack the weaker targets first. (1)

bobv-pillars-net (97943) | more than 13 years ago | (#326291)

Interesting... If they had any real evidence against E-Gold, they'd attack directly. But since they don't, they attack one of the weaker (and by appearances, less professional) associates and try to intimidate them into turning state's evidence. Sounds like they didn't crack, though. Wonder who's next?

Typical ploy, worthy of the SS name.

Re:this isn't e-gold's fault (1)

t3mpest (187959) | more than 13 years ago | (#326292)

Not really, if somebody steals your credit card, you are not liable.

If somebody steals your check card, you are just out that much cash. That makes daily limits a good thing. Besides, a quality bank will raise it if you ask.

Scary... (3)

ethereal (13958) | more than 13 years ago | (#326293)

...Why does the Secret Service need the guy's birth certificate? How is that evidence of anything? I would be very wary of surrendering potentially irreplaceable personal documentation to any government agency, otherwise the government could quickly make you a non-person.

And another thing: is it really illegal to own gold bullion in the U.S.? What possible justification is there for that? I'm hoping that's an urban legend...

Its not as bad as you think (2)

powerlord (28156) | more than 13 years ago | (#326294)

Most places will take cash quite happily.

When I first started working in the workplace I ended up doing a lot of travelling. Having just gotten out of college I only had a credit limit of $600 (don't get me started).

Most of the hotels chains I stayed at (Marriott, Doubletree, Sheriton, etc.) were perfectly happy to accept Greenbacks in place of a creditcard. They sometimes fumbled through it a little (since they weren't used to it), but I never had a second glance. Most hotels will, at most, require a deposit. If they take a credit card imprint this covers them on the deposit.

Don't know about Car rentals, since I was under 25 and they wouldn't rent to me :)

Re:Money Laundering comes to e-commerce (1)

Petrophile (253809) | more than 13 years ago | (#326295)

The company in question was operating out of the Caribbean island of Nevis. You add it up.

Seizure (4)

Uruk (4907) | more than 13 years ago | (#326296)

Does it bother anybody else that the article clearly states that they've raided this guys place and taken all of his stuff, and then follows it up with "We haven't yet filed any charges"?

Whatever happened to "innocent until proven guilty?"

I'll freely admit I don't know the details of the case, but even totally guilty felons have constitutional rights.

owning gold in the US is now legal (4)

phr1 (211689) | more than 13 years ago | (#326297)

It was illegal in the US to own gold bullion from 1933 til 1974. So it's not completely an urban legend. But you're free to buy gold in the US now. Typing keywords like "legal gold bullion 1933 roosevelt nixon" into Google will find you a lot of references.

Re:Secret Service (3)

GeorgeH (5469) | more than 13 years ago | (#326298)

Ironically, it was during Abraham Lincoln's term that the SS was created. Too bad he didn't think to include "protection of president" in their list of duties. IIRC, they were originally created to stem the ammount of counterfiet currency being created in the reconstruction era.
--

Re:How rational is this? (1)

ranessin (205172) | more than 13 years ago | (#326299)


Of perhaps they're motivation is to thwart some crime. Why is it hard to believe that Gold-Age might be committing a crime? Why not wait at least till charges are brought before judging the actions of the Secret Service? Remember, the article only told one side of the story.

Ranessin

Biased description of article (1)

guinsu (198732) | more than 13 years ago | (#326300)

I'm not one to start flipping out about bias here on Slashdot, but that description of the raid seemed very biased against e-gold and made me thing that when I read the article it would indicate there was a very solid case against this company. Instead, it seems very ambiguous and more a case of the SS persecuting a business they don't understand because it disrupts their ability to keep tabs on people's money.

Re:What is the significance here? (1)

Mercaptan (257186) | more than 13 years ago | (#326301)

Also known as, what a wonderful way to launder money!

Re:What is the significance here? (1)

ranessin (205172) | more than 13 years ago | (#326302)


Or perhaps Gold-Age really is doing something illegal. We've only heard their side of the story.

Ranessin

Re:Debit card (1)

BVis (267028) | more than 13 years ago | (#326303)

Not always. In some states (Massachusetts being one) debit cards' users are afforded the same protection under the law as 'ordinary' credit cards, i.e. you can only be held liable for the first $50 of a fraudulent transaction.

MA gets a lot of things wrong in terms of government intervention but this is one case where IMHO it's a good idea.

Re:Scary... (2)

Anoriymous Coward (257749) | more than 13 years ago | (#326304)

is it really illegal to own gold bullion in the U.S.?

I don't know. I first heard this when I was a kind in England. I think Carter was president at the time. Pretty soon after that I read something similar in Heinlein. It didn't make sense ("you can have as many guns as you want but not one gold brick?") so I stopped worrying about it.

It seems to me that all the e-Gold is in London or Dubai, so it wouldn't seem that they can get this guy on that count.

--

Re:Debit card (2)

SquadBoy (167263) | more than 13 years ago | (#326305)

Keep in mind they *have* to take cash. As in can not refuse it. If you have the cash all they can ask for is someway to verify that you are who you say you are. Now they can also demand a deposit. But yes it is very possible to do with cash. Because to turn you away because you want to pay in cash would be against the law. This is the whole idea of legal tender.

Tom Clancy Novel (1)

monk (1958) | more than 13 years ago | (#326306)

Actually it's a Neal Stephenson novel. Cryptonomicon [amazon.com]

I don't want to give anything away, but if the idea intrigues you, read the book.

Dubya's $200 bill.. (1)

Trinity-Infinity (91335) | more than 13 years ago | (#326307)

Actually, that wasn't a crime in the jurisdiction of the SS. They can only pursue cases where actual US currency has been fraudulently produced/used/etc... since there's no $200, its just a 'dine & dash' essentially for the local constabulary to tend to.

But I loved that bill - whoever made it has to have a great sense of humor and no money!

Re:How rational is this? (2)

artdodge (9053) | more than 13 years ago | (#326308)

It's worse than that... they started using pieces of paper to represent the metals, and then they dropped the whole idea of "backing" currency and started using those pieces of paper to represent a share of the value/wealth of an economy (unless anyone out there is using silver-backs?). Then throw the abstraction of credit on top of that, and the abstraction of "e-wealth" on top of that.

Postmodern indeed. Is it any wonder every few years a politician shows up and talks about going back onto the gold standard? With the current system, one could get to thinking (rightly or wrongly) that their money is nothing but a consentual mass delusion...

Read Money Mischief (2)

Galvatron (115029) | more than 13 years ago | (#326309)

Money Mischief, Episodes in Monetary History, [amazon.com] by Milton Friedman, is a excellent book on how money works, and the various ways it has been screwed up over the centuries. In the beginning of it, he talks about a (true) society which used giant rocks as currency.

What you have to remember about money is that it is simply social contract. Instead of giving you a cow in exchange for your sheep, I'm giving you something that you know will allow you to obtain something of equal or lesser value from someone else. Gold, paper, computer digits, it doesn't matter as long as it's secure.

The only "intuitive" interface is the nipple. After that, it's all learned.

Re:this isn't e-gold's fault (1)

corbettw (214229) | more than 13 years ago | (#326310)

FYI, many "check cards" have daily limits.
Actually, if you call your bank and tell them it's really you, they'll usually put the charge through. Those limits are in place because, unlike credit cards, debit cards are pretty much cash. Once the money is out of your account, you can't get it back without suing the merchant. And no bank wants to be a part of that kind of hassle, which is why they don't absorb losses from debit cards like they do credit cards. So the limits are really for your protection.

Re:WTF? (1)

erayzer (307107) | more than 13 years ago | (#326311)

I am trolling.

Re:WTF? (1)

erayzer (307107) | more than 13 years ago | (#326312)

People find it really irritating if you say something retarded, as I did, they lunge in to slap you down and you immediately roll over, going "Oops, you're right." They've wasted valuable anti-troll energy!

Re:this isn't e-gold's fault (2)

ghjm (8918) | more than 13 years ago | (#326313)

Use a charge card, like AmEx or Diner's Club, instead of a credit card. The problem with a debit card is that it's exactly as fraud-prone as a normal credit card (and by "fraud" I include unapproved merchant rebills) - but if someone does something you don't like, YOU LOSE YOUR CASH until you fight it and win. Debit cards are horrible from an informed consumer's point of view.

Charge cards, on the other hand, don't involve interest or revolving debt, yet if something goes wrong, it's the bank's money outstanding while the matter gets resolved. Also, charge cards often carry many or all the tangential benefits of credit cards: warranty extension, travel & rental car insurance, reward programs, etc.

I have a Diner's Club card and it's worth every penny of the $80 annual fee, but I wish it was accepted at more places. What I'd really like is a charge, not credit, card that operates within the Visa or Mastercard network; i.e. it looks like a Visa or Mastercard but you have to pay your bill every month and there's no debt carried over. Does anyone know if such a thing exists?

(Of course, I could get a normal Visa or Mastercard and just choose to pay your bill every month...and this is what I've done. I just don't like the idea that in a fit of drunken insanity [or whatever], I could mortgage my life for the next five years.)

-Graham

Re:this isn't e-gold's fault (2)

Tassach (137772) | more than 13 years ago | (#326314)

I've been able to rent a car w/out a credit card in the past (granted, this was 10 or so years ago). When I did it, they had me write one check for the cost of the rental, plus another check as a security deposit ($500, IIRC). When I returned the car, they gave me the security check back and had me pay any extra charges. They don't deposit the security check if you return the car on time. Considering that they took a check as security, I'm sure they wouldn't have any problems taking a cash deposit. If you wrote a rubber check, they'd just sell it off to TeleCheck or another collection agency at a discount.

Beenz! *Yay!* Flooze! *Yay! E-Gold! *Pummeled* (1)

wolfpaws (112843) | more than 13 years ago | (#326315)

Basically, if your business model allows people convert stolen credit card dollars into Beenz/Flooze and let people buy worthless shit at the Disney store...The Secret Service is gonna leave your company alone. But if your business model allows people convert stolen credit card dollars into bulk precious metals, aka something of real value...You're in for it.

Re:Gold Bar (1)

onepoint (301486) | more than 13 years ago | (#326316)

I am not a lawyer. I believe the law your talking about is prior to 1967 or 1972. You can own gold in just about all types ( coin, bar and ball ). I think it just has to have a stamp of the purity and or the spamp of issue ( manufacture's stamp or country of manufacture ). At the World Trade Center in NYC there is a store that will sell you Gold coins, bars ( brand new freshly minted 999 purity ) all the way up to 6 troy oz.

In the USA you can get gold with a purity of 999 but when we had problems of trust with Russia, the russian gold was issued and tested at 9999. Most of that type of gold went to computer circuit board manufacture and surgical company's.

ONEPOINT

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The facts of the US economic scam (1)

Diesel Dave (95048) | more than 13 years ago | (#326317)

Who every thought that gold would be more stable than curency.

Fact: Gold has about the same approximate buying power today as it did 100 years ago. US currency has approximately 1/100th the buying power today as it did 100 years ago.

Fact: Since ~1950 the Federal Reserve note has not been backed by ANY hard currency; it is worthless fiat paper.

Fact: 'US Dollars' have not been in existence for 40 years now. (The last of them was the Kennedy era red seal, silver certificates)

Fact: The Federal Reserve is about as 'federal' as Fed Ex; it is a private corporation.

Fact: The current monetary system is illegal according to the US constitution

Point: Tell me again that fiat paper gives us a stable economy when Greenspan can swing our entire economic system with the Federal Reserve's arbitrary change of an interest point?

Re:How rational is this? (5)

servasius_jr (258414) | more than 13 years ago | (#326318)

The world is becoming disturbingly postmodern. In the beginning there was bartering. Then people started using precious metals to represent the value of objects. Then they started using pieces of paper to represent the metals. Then they started using plastic cards to represent pieces of paper. Now they're trading that in for a number in a database.

Currency is pretty useful stuff, though. When you come down to it, wealth is based on production. If you have wealth, it's probably based on something valuable you've produced, whether that's a good, or a service, or whatever. If you're bartering, you're trading whatever you produce, sheep or legal advice or whatever, for what you need, groceries for example. Obviously this isn't very graceful. Any other medium of exchange is simply something representing your power of production, in order to make getting what you need easier. (e.g., you don't have to find a grocer who happens to need legal advice or a sheep, and you don't have to get a whole sheep's worth of groceries at once.) So if the whole point is making things easier, why not use the medium of exchange thats the most flexible? Saying a shiny rock represents something valuable is, in the end, no more rational than saying a string of numbers represents something valuable. If the string of numbers works better, use it.

Re:this isn't e-gold's fault (2)

SquadBoy (167263) | more than 13 years ago | (#326319)

While it is true that the cash is gone now it is not true that you have no protection. This varies from bank to bank but I have had someone use my check card a couple of times. Both times the bank refunded my money. And both of them where under the $50 limit on credit cards. But of course my bank is well known for customer service. :) Just pick a bank with good terms.

Re:this isn't e-gold's fault (1)

corbettw (214229) | more than 13 years ago | (#326320)

I don't know about hotel rooms, but cash won't work for rental cars.

Techincally, you are correct. But you can leave a deposit in the form of a cashier's check, usually for the amount they would lock on your credit card (~$250 - $500).

Re:Hmm... cross with Cryptonomicon... (1)

magarity (164372) | more than 13 years ago | (#326321)

In 'Cryptonomicon', Goto Dengo says that General McArthur understood that gold is 'dead wealth'. What he meant by this is that gold is a storage place for work done in the past. It does not, in itself, take the place of new work (though it can be used in normal circumstances to buy work from people who will then themselves use it as storage).

Post-war Japan needed day to day work for the populace to rebuild the country, both in terms of physical infrastructure and morale, and not a just a bunch of gold... it's difficult to purchase from elsewhere the rebuilding an entire bombed out country.

Re:Lemme Get This Straight (1)

erayzer (307107) | more than 13 years ago | (#326322)

Yes. What is so difficult to understand about that?

Inflation (1)

skeptic (6226) | more than 13 years ago | (#326323)

Sir:

I recommend you do a little brushing up on your economics. Gold, silver -- any commodity for that matter -- are not immune to inflation .

The Mercantilist philosophy of the 16h and 17th centuries, which dominated international trade in Europe, proved that any monetary instrument experiences inflation if its supply increases at a rate faster than the rate at which it's demanded.

If we were to attempt to switch to a currency system based on any precious metal, the exact opposite would occur: immense deflation. There simply isn't enough supply for demand.

Peace.

Re:this isn't e-gold's fault (1)

SquadBoy (167263) | more than 13 years ago | (#326324)

They may ask for a card to put a deposit on but they do in fact have to take cash for the payment. They can *not* refuse to take cash.

Re:Crap!! (1)

bjorky (78181) | more than 13 years ago | (#326325)

Yes, I am quite aware that the German word for window is das Fenster (remember to capitalize nouns in German), but fenestration is the layout of windows and doors of a building, and from Merriam Webster [m-w.com] :
One entry found for defenestration.

Main Entry: defenestration
Pronunciation: (")dE-"fe-n&-'strA-sh&n
Function: noun
Etymology: de- + Latin fenestra window
Date: 1620
: a throwing of a person or thing out of a window
- defenestrate /(")dE-'fe-n&-"strAt/ transitive verb

also see The Defenestration of Prague [aol.com]

defenestration = deforestation? GAH!

-----

Re:Secret Service - in a RAID? (2)

SuiteSisterMary (123932) | more than 13 years ago | (#326326)

That gives you a single point of failure, unfortunately.

Re:Secret Service (1)

Geek In Training (12075) | more than 13 years ago | (#326327)

Crimes such as using a $200 bill with Dubya's face on it to pay a $1.50 tab at the Kwik-E-Mart? I about ran off the road laughing when I heard about that one.

It was a Dairy Queen in Danville, KY. And yes, it was an AP story; some guy convinced the chick at the counter that it was legal tender (the bill said "Moral Legal Tender"), and she gave him $198.xx in change.

I wanted to call Dairy Queen an just laugh at them hysterically for a few minutes, but believe it or not, there are two DQs in that city, and I didn't want to harass innocent residents of Danville, KY. ;)

And how rational is gold? (2)

samael (12612) | more than 13 years ago | (#326328)

And gold is worth money because??????

It's just lumps of metal, you know.
_____

A better question... (1)

TWX_the_Linux_Zealot (227666) | more than 13 years ago | (#326329)

... is "WTF is the secret service doing protecting the President when they're supposed to be dealing with money?!" Seriously, the Secret Service was drafted into the job after some assassination I think...

"Titanic was 3hr and 17min long. They could have lost 3hr and 17min from that."

Re:hotels (1)

Kwelstr (114389) | more than 13 years ago | (#326330)

Somebody mod this down. -1, Overrated.

Haha good one!

The shiny rock is different. (2)

Flying Headless Goku (411378) | more than 13 years ago | (#326331)

The shiny rock doesn't represent something valuable, it is something valuable. Nobody decided by fiat that gold would be money, it's just everybody's favorite stuff. Many people spend a rather absurd portion of their wealth on gold ornaments.

Similarly, copper, silver, and other coin metals are also much in demand, and small enough to be worth carrying around in your pockets for trade.

There's nothing at all irrational about a market based on the trade value of shiny things.
--
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