Little Lost Linden

I'd have to agree. It would be interesting to see the documentation on something like this, even if it was just a local newspaper or tiny clipping. I could understand if it wasn't listed however though too. I doubt all the website takedowns are published anywhere (unless they are ICE related - those seem to get published all the time). Same with sim closures.

I must admit though, this cc laundering is the last thing I would think of when it comes to bot owners profitting from a sim. I was almost sure it was just related to gaming the traffic numbers in some way.

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Yoshiko Fazuku

Well i am not gonna talk about specific instances. That is for those other grids to decide whether they want to do so.

What i will do is tell you what i know about the scam thats usually done.

They create a lot of throw away accounts to buy L with stolen credit cards. Then take that money and send it in little chunks to other accounts that then send it to yet other accounts then those accounts withdraw the money into pay-pal and then send it to a debt card thats used to withdraw out an atm. They also use the L for random purchases or funnel though fake in world biz to further obscure things to make it hard to tell what transactions are real and what are fake. They don't care about fees, costs and % becuse its all free money anyways they work with volume. They have plenty of out of work people who will sit in an internet cafe in Egypt or other Arab country for a few dollars a day moving money around.

There are a lot of similar CC scam operations on the internet. Its a lot like gold farming in china on WoW except its much more profitable to the people running the scam because its real money. Anywhere you cant create an acount with phony credentials and/or fake banking info is ripe for abuse for these types of scams. Unfortunately it also makes it harder to use those kinds of services by law abiding people and means more hoops to go though to get accounts and other things and more privacy to give up in verification and even then it doesn't stop the criminals from using well crafted fake identities and credentials.

But anyways, yes this does happen and though i don't know for certain in this instance this is what is happening....It a strong possibility. if they sold the land at the end due to the traffic numbers that would just be icing on the cake. Its still something that if noticed by a employee of LL lab that should be investigated. all they have to do is look at the transaction info on the accounts of the bots to see with who and what is being done.

Elysium Hynes

Ok may i ask how did you gain this knowledge, and if you have ever adressed anyone at LL about it?

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LeeHere

The right tool at the right time and well used. I love those irresistible little moments.

Anya Ristow

I've theorized the exact scheme Yoshiko described. LL could look for this kind of activity by looking for closed networks of money transfer. They may be large, but as a programming problem that doesn't make it any more difficult. Basically, for money laundering to happen there'd have to be a small number of accounts buying linden dollars and a small number of accounts cashing out, with a large number of accounts transferring money indirectly from the one group to the other, with little or no spending or income outside the network.

That's how it'd work if it was being done by someone otherwise uninterested in SL. But if it was someone involved in SL (or even a group of residents) there may be leaks (spending on personal use accounts) and fronts (resident businesses) involved. Still not impossible to find, as their network would still be less leaky than could be explained away.

If it's happening it's inflating U2U transactions bigtime.

And if *I* was doing it, there wouldn't be a box of bots involved. They'd be all over the grid, and they'd move around.

Yoshiko Fazuku

I am gonna choose to not talk about or name names of my sources out of respect for them being candid with me. I just have interesting people in my social circles. Some are programmers, 3d creators, opensim devs, others own grids, some might even be goverment, law enforcement, and hackers.... and just a few might even know people who juggle cats (Steve Martin reference). I hear about lots of things just being a fly on the wall at times. Some times what i hear is true, some times its rumor while other times its some one bragging for the sake of bragging. But i can say with 100% confidence that the type of scam i told you about has happened, is happening, and will happen many times in the future.

As far as what LL is doing or knows i cant comment on becuse honestly i dont know for sure and i rarely log on to SL anymore. This is a common biz issue that they have to deal with in there own way. Any business that deal with money or product has to deal with fraud in some form or fashion. some choose to combat it directly, while others choose to write it off as "shrinkage"

Innula Zenovka

So what do you actually say?

That you know that they using bots to launder stolen credit cards and you know know this because the people running these bots been caught doing this on other grids?

Or that you don't have any more idea than does anyone else here about who is running these bots or why, but that you theorise that it's entirely possible that they're running some sort of money-laundering operation of the type you describe?

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Yoshiko Fazuku

One thing i have found over the years is criminals rarely think anything though or if they do, things never go as planed and they just start winging it. Eventually something stupid is missing from their plan and they fail else they wouldn't had been caught. ...then again we only know about people who are caught. If a crime isn't caught did it ever happen in the first place? well of course it did and sometimes they get away with it. but criminals rarely do other than due to just plain dumb luck.

Yoshiko Fazuku

Im saying it has been done and most likely being done and will be done in the future. whether this particular incident is that i dont know for sure but its a plausible explanation and thats what every one seems to be looking for in this thread. I simply submitted a possible reason based on the info known in this thread and what i know about other incidents where this was the case. and as i said i choose not to talk about those particular incidents. for all intents this is a educated guess/theory but backed up with previous knowledge of other incidents. In a nut shell take it as an idea as something to look into if you feel it important enough to explore.

Leah Mayo

I think Youshiko is saying that those bots pretty much look like a part of meantioned scam scheme. To me it sounds plausible.

Elysium Hynes

I honestly just don´t see how this is any of my business tbh. It could be a lot of things, could be gamming traffic, could be money laundering, could be a fancy.

The best way to act seems to me for who ever finds this to AR it for whatever they think it is and let LL deal with it as they see fit.

Innula Zenovka

I agree it's wholly possible, though I share Anya's reservations about why anyone would go to the trouble, if not expense, of setting up a sim and drawing attention to their operations by setting all the bot there when they could just as well, and far less obtrusively, station the bots on parcels of abandoned land all over the grid.

I take the point about criminals rarely thinking things through, or at least the ones who get caught, but it does seem to me a bit odd that someone would be able to put together so complex a series of transactions, and thus far avoid trigging the automatic transaction alarms (which, as I know all too well, is easy enough to do even with innocent transactions), without it crossing their mind that buying a sim, albeit with stolen money, to house all your bots was an unnecessary, and probably counter-productive, complication.

In my day job we do like a bit of evidence before we accuse people of criminal offences. Certainly looks like it would be worth LL's while investigating but I wouldn't be inclined to put it any higher than that.

Qie Niangao

They not only rented a full sim for those bots, but opened it to the public and listed it in Search with a parcel description full of Middle Eastern terms. That would be an awfully elaborate way to hide in plain sight.

As long as we're playing Clouseau, do we know why there's a nondescript little Mainland parcel with much the same description as this sim? (I wonder if it had that description before the NWN popular sim listing.)

SimonLeo

Even though I do not like the absence of any form of proof from Yoshiko I can say that credit card fraud in SL happens and that the m.o. is indeed to spread money to several accounts.

I have experienced it first hand in our L$ exchange(cost my company about 500 US$'s).

The end result was that we stopped using Paypal as a payment method (they believe the buyer no matter how much proof the seller provides).

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IsisAlexander

There is only one problem with this. Number one that in 2010 the Bank Secrecy Act was updated to say that any virtual world that uses a transfer system into real world currency must be treated as a Money Service Business. Traditionally a MBS is a business that does types of wire transfers ie Western Union, money orders, prepaid debit cards etc. There is a whole host of Anti-Money Laundering regulations these businesses have to abide by.

LL has has had issues with the law in the past. I highly doubt they would allow these types of transactions to go on unchecked. Linden Labs is the largest virtual world. They have an Anti Money Laundering staff to monitor and stay in compliance with the Bank Secrecy Act. They do not want any more negative publicity. Second Life cant afford it.

Then there is the issue of CC companies. Every transaction that is done on a credit card is monitored. If there is ANYTHING unusal about it, that transaction is blocked ie out of state or country, large dollar amount, suspicious activity.

In other smaller virtual worlds this may be an issue. Especially if it is run by a smaller group. Here is a pamphlet from an attorney advising small virtual worlds and offering his services in this issue...

http://www.virtualworldlaw.com/Virtual%20Currency.pdf

The chances of this happening in Second Life on a large scale is extremely small.

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IsisAlexander

PayPal has the most fraud of any financial entity that I have ever experienced. I have experienced ALOT in my profession.

But because of how they process transactions and their policies they dont acknowledge the fraud in the same manner a bank would have to.

Anya Ristow

There are the things you mention, and also the smallness of the SL economy, which lead me to believe that if it's happening, it's done by a few geeks with access to stolen credit card numbers, doing it for a few thousand, or at most, tens of thousands of dollars each.

A few years ago there was someone in the midwest attaching home-printed barcodes to LEGO sets so he could buy then cheaply, and then re-selling the parts in an online LEGO marketplace. It's something he did legitimately for a while before he thought to do the barcode thing. That is, he was a hobbyist that got greedy and had a brilliant plan.

If money laundering is happening in SL, I doubt it's by foreign crime syndicates. It'd be small-scale stuff by people already interested in SL.

Inhandra

I don't understand how a dogpile of bots can turn into money laundering. No matter how many times the L changes hands, wouldn't the Lab still be able to track it?

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Anya Ristow

On the other hand, my bank hates LL so much they automatically de-activate my card every time I use it to buy linden dollars. There's got to be a reason for that.

Anya Ristow

Yes, if they were looking for money laundering. I described how above. If you thought you could get away with it, though, you'd need a large network of bots. A deep enough network that was willing to spend money outside the network, and set up quality shops to take in money from outside the network, might even escape detection. But who other than people already interested in SL would have the expertise to do it convincingly?

A box of bots passing money between themselves wouldn't cut it unless LL was totally daft.

Dickie Swansong

Please, these are the same people that can't figger out how ta make group chat work, or wtf SL is for in teh first place.

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IsisAlexander

It could be simply because it is an out of state transaction. If you rarely purchase lindens it could be flagged as unusual activity. It doesn't necessarily mean there is an issue with LL.

IsisAlexander

This is a good point.

Even with stolen credit cards, in LL there would be a paper trail a mile long, for this kind of money laundering. It wouldnt take much to catch it.

Most of the CCs would be shut down before it even got off the ground.

Innula Zenovka

Depends on what you're trying to do with the money, I guess, and how deep investigators dig. A single cash deposit, or bank transfer, of US$10,000 to your bank account may well trigger some automatic alarms, thus leading to closer inspection, if it's unusual for your account. The fact the source is an established company, LL, will allay many suspicions, particularly if you explain it's the proceeds of your successful in-world business.

Meanwhile, LL's alarms are far less likely to be triggered by 100 different, apparently unrelated, accounts each buying $US100 worth of L$ and it all ending up, after several intermediate transactions, in one person's account, where they cash it out, than are they by one person trying to buy that amount of L$ and giving to a friend.

Yes, it's all discoverable, as is any fraud or money laundering operation, if a sufficiently thorough audit is conducted. But successful frauds and money laundering operations work by hiding their true nature behind several layers of apparently legitimate transactions.

Fluffy

Sadly, if I've learned anything from my time in SL, it's that you should never underestimate the daftness of the people in charge of it!

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