[e-gold-list] Re: e-gold pleads guilty of money laundering charges

[Pete Chown]

Hi Jim,

> I believe there are limits to what a defendant in a criminal case of
> this sort can, or should, say about it.

I wouldn't know -- plea bargains are illegal here.

> To say that the criminal charges have been resolved is just as accurate
> as saying that there has been a plea agreement entered.

Of course it was accurate to say that the criminal charges had been 
resolved.  That's why I said it was "spin" rather than "a lie".

> Personally, I believe e-gold's statement is accurate, and the rather
> extreme maximum sentencing guidelines which are reported in the press
> release are puffery, at best.

That's quite encouraging.  It's probably easier for you to read between 
the lines, as an American!

> I believe that, as well.  Indeed, I think the ways in which the
> "criminal justice system" deals with people, most especially with
> merchants, represents a completely psychotic anti-property world-view
> that was fashionable in the last century and which is completely
> mistaken in many ways.

Yes -- one of the worrying things is the rise of victimless crimes.  E-
gold seems to be accused of not registering as a money transmitter, for 
example.  Something has gone wrong when you can go to jail for not 
filling out a piece of paper.

> The rules that the Treasury Department promulgated on this point seem
> fairly clear, to me.  A jewelry store that buys gold from the public and
> sells gold to the public, and does more than $50,000 of business per
> year, is in effect a money transmitter. The precious metals value of
> palladium or platinum in catalytic converters creates a similar
> situation for car dealers.

Wow...  Obviously I'm remembering the story wrong, then.  I thought the 
argument was that e-gold didn't have to register as a money transmitter, 
because it dealt only with gold, and to the government gold is not money.

What if it isn't jewellery that you deal with?  What if I started "e-
blackgold" which would allow people to buy goods in exchange for oil 
futures, for example?  In fact, all sorts of commodities could be used as 
money.  All you need is something that has a liquid market, so you know 
the value of your holding.  How is the government going to distinguish 
between barter and money transmission?

> And, I think the e-gold case further
> cements the view now prevalent that innovations in online payments are
> going to happen in Russia, or Malaysia, or New Zealand, but not in the
> USA.

You're probably right, and sadly I don't think innovation will be 
happening here in Britain either.  We didn't buy into the online gambling 
ban, but apart from that we have similar levels of paranoia about money 
laundering.

> I would suggest that one path forward for 1MDC users would be for them
> to form a group, hire a law firm like the one that now represents the
> Liberty Dollar people, and pursue a recovery.  I have been talking to
> quite a few people about whether this idea might be feasible.

Good luck!  I seem to remember that there were people with substantial 
balances in 1MDC, so I hope you do get them back.  Even if 1MDC had 
committed a crime, the people who deposited funds with them hadn't (in 
general at least).

> Well, you can almost certainly use it to buy into an online gambling
> site without violating British law.

That's right, and I wonder how safe e-gold is, as the American company 
which is caught in the middle.  Using e-gold to finance trade with Cuba 
would be another (contrived) example.  Perfectly legal for me, but it 
might be illegal for e-gold to help me.

Pete



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