This is a power point presentation provided to a workshop for Anti-Money Laundering professionals held in Bangkok, Thailand from June 24-26, 2008.

This conference focused on mobile telephones and their potential uses in money laundering schemes. The particular presentation I have linked to was given by the Korean Financial Intelligence Unit and it provides a number of case examples and statistics from that country.

Case 2 is called “Illegal cyber game money case” and it refers to the use of “cyber money” in a money laundering case. The perpetrators appear to have used some sort of intermediary, possibly an auction site or a gold farming operation, to launder what they are calling “Aden.” “Adena” is of course the currency of Lineage II which everyone knows is ridiculously popular in South Korea.

The total amount of the transactions involved in the money laundering schemes was $386,000 between October 26 and December 1, 2005. Since this is only a power point presentation it is unclear how much of it was laundered through this intermediary or was laundered using Adena, but it certainly appears that at least some of it was. I really wish I was there to hear the presentation.

This is interesting to me on a number of levels:

First, this isn’t as big as the $38 Million money laundering scheme that was reported recently by the English sites of Donga Il Bo via PlayNoEvil; however, $386,000 ain’t no chump change either. These are amounts that warrant some attention.

Second it’s really difficult to find credible, public record sources of this kind of activity involving virtual worlds/mmos. The Donga Il Bo article is a great example but it is only one source. All of the other research I’ve seen, including papers on SSRN, in the media and produced by various agencies refer to this activity as a “threat” or “theoretical” but there is very little in the way of actual case examples.

It is possible that the case example provided in this presentation could be hypothetical; however, the details are very specific and it would seem out of context with the rest of the presentation. In addition, this conference did indeed happen, this presentation was given by a representative of the KoFIU and the document is hosted on a World Bank site. At least the source of the information is definitely credible.

I now have two great examples, but if anyone has any additional ones and are able to share I’d love to get a copy of the documents.

Third, and this is more of an FYI, I only came across this when I started researching the use of the word “cyber money.” This was my own folly. I was using terms like “virtual currency”, RMT, “game money” and I even searched using the names of a number of the in-world currencies but I was hitting nothing but dead ends everywhere. Eventually I determined that “cyber money” is a term that is used in association with this phenomenon in other parts of the world.

Having benefited from the information provided on a number of different legal, gaming, academic and security sites, I hope that the community is able to benefit from this information as well.

Those readers who are interested in academic research on the study of Privacy as it relates to Privacy and Cyber Crime will want to check out The Privacy and Cyber Crime Institute at the Ted Rogers School of Management at Ryerson University.

This organization is partially funded by contributions from the Office of the Privacy Commissioner of Canada.

Best wishes for a prosperous 2009.

Magazine editor and California based private investigator Tamara Thompson published a recent article on the Law.com website concerning the use of social networking sites for due diligence. For those interested in the subject, I recommend the read.

Ms. Thompson also published a post on her blog called “Think Twice Before Going Undercover” which examines the implications that the Lori Drew case could have on conducting research on a social networking site using a fictitious profile. I know that the legal ramifications outside of the US are also the subject of some debate.

The legal pundits I’ve been reading believe that despite the fact that Drew has been convicted of the misdemeanor charges, this issue is not dead.

We’ll have to wait and see what this means to people who violate Terms of Service Agreements from now on.

In a study described in the Ottawa Citizen, University of Guelph PhD student Amy Muise, analyzed the Facebook habits of 300 undergrad students (aged 17 – 24) and made some interesting discoveries.

The first finding of interest relates to Facebook habits and personal traits. The study found that those who are inherently more self-confident are more likely to use higher privacy settings than those who are less self confident; as the article states “those who placed more importance on popularity were more inclined to share all online.”

The study also revealed some other interesting statistics:

*96% – would reveal their birthday
*84% – would reveal their home town
*81% – would reveal their relationship status
*72% – would reveal their school and program
*42% – would reveal their current city
*31% – would reveal their university residence
*24% – would reveal their phone number
*4% – would reveal their home address

The study will be published in The Journal CyberPsychology and Behavior. Thanks to Darrell Booth of Glencastle Security for alerting me to this article.

In other Facebook news, it appears that lawyers in Australia have successfully used Facebook to serve legal documents in two different and unrelated cases; one in the Australian Capital Territory (“ACT”) Supreme Court and one in the Victorian County Court.

This is in contrast to a decision made earlier this year in Queensland, Australia where a judge did not allow service by Facebook to occur.

The judge in the previous case argued that it was too easy to set up a fake profile on Facebook and that the person’s who created the “defendant’s profile” might not be the defendant at all.

In contrast, in the ACT Supreme Court case the lawyers involved, Jason Oliver and Mark McCormack, were able to convince the Court that the documents would arrive at the right place because profiles they were “serving” contained enough personal information (date of birth, common relationships) to verify that the individual of interest owned the profile.

Interestingly, according to the same article courts in that country have previously allowed judgements to be delivered by email and by text message.

I know from the feedback that I receive that intellectual property rights as they relate to social media is of interest to readers of this blog.

For those wishing a good introductory summary of some of the various types of social media sites and some of the intellectual property issues that relate to these platforms readers may wish to check out an article from the Ottawa Business Journal written by lawyer Nicolas Lupien of the firm Labarge Weinstein.

On October 7, 2008 British man Rachata Burasite pled guilty to a charge of Child Luring after having traveled to Canada to have sex with an 11 year old Canadian girl with whom he had been conversing in the virtual world Gaia.

After having exchanged messages on line and in text with the girl for two years, Burasite flew from England to Vancouver to meet the girl in person. A CBSA border guard interviewed Burasite as he entered the Vancouver International Airport and was suspicious enough that he or she requested that Burasite go undergo a secondary inspection.

During the secondary inspection by the CBSA, Burasite was discovered have pictures depicting the sexual abuse of children on his mobile phone. This led to the involvement of the RCMPs Integrated Child Exploitation Unit for further investigation which uncovered Burasite’s real intent for being in Canada.

Burasite had been in RCMP custody for two months prior awaiting his trial but he eventually he did have his trial in mid November. Despite having admitted guilt and receiving a six month sentence he was released for “time served” in recognition of the time he spent in jail prior to his trial.

According to the Times Online Burasite is now back in England. He was deported sometime in late November after receiving sentencing in Canada and upon his arrival in Britian he was taken to the Uxbridge Magistrates’ Court and placed on the UK Sex Offenders’ Register

As indicated by Virtual World News Gaia does not allow anyone under 13 to register, but apparently that system was defeated by the 11 year old girl. This is one of the reasons why the Internet is considered “hostile territory,” the checks and balances imposed by the service providers and platform owners don’t always work.

Parents are encouraged to be vigilant about their children’s activities on line and if you would like more information on child safety tips relating to Internet use, please visit Cybertip.ca.