I find Amazon’s response to being informed about this “incident” particularly shocking.
Based on the information presented on Krebs’ blog, it should be obvious to Amazon that this is not just a case of a client dispute, but a situation involving a number of serious crimes. Considering how Amazon’s own platform facilitates these crimes, should their reluctance to assist this particular victim not open them up for a liability claims, maybe even for complicity in illegal conduct?
Taking it one step further, Amazon appears to have gained, and still gain a significant percentage from each of these transaction. In plain words: Amazon itself gained profits from criminal proceeds. It also appears to not be bothered all that much with structurally eliminating this practice. Doesn't that make Amazon itself a criminal organization, by definition?
Unless Amazon puts an immediate stop to all this, and distance itself from all profits so far made on it, why would it not be branded a criminal organization? Because they provide jobs? Because they provide innovative new business opportunities? Because they also gain profits though legal ways? Those same things can be argued for many criminal organizations, even including the Italian mafia.
Indeed. It looks like pretty cut-and-dry failure of KYC compliance. When acting as a marketplace, Amazon is a money transmitter and needs to follow KYC procedure for all sellers receiving funds. It seems like their KYC is very loose, to say the least.
Unfortunately as I age and gain experience in this industry, I've come to the conclusion rules like that do not apply to companies the size and breadth of Amazon.
They may get a slap on the wrist, but if a small company did this the principles involved would be in prison.
Perhaps a day in jail would make Bezos care. Money laundering is currently a big deal. Using Amazon to launder money is no different than selling stolen merchandise to a pawn shop.
In order to get a money transmitter license, Amazon must comply with KYC regulations, which are at best minimal protection against fraud. By failing to even meet such a minimum, Amazon may be demonstrating willful negligence.
That is why money launderers do it right? They get a cut of the money laundered, and in this case that is 30%.
When I read the Krebs article I was struck by how similar it was to the way in which World of Warcraft Gold sellers would "launder" their gold by sending it through the auction house. In that case they would have their customers put up a specific worthless item for a high fee on the AH and then one of the gold farmer accounts would come along and buy it. As a 'legit' transaction it was hard for Blizzard to catch.
No doubt this is a pretty ancient scheme, you could use a swap meet for example to launder a lot of cash this way as well. Amazon just makes it easier. Of course it would be easier still if Amazon accepted blockchain currencies. Then you could create your own mixer without any work at all. :-) That makes me wonder if there were people selling silly things on Silk Road back in the day for large amounts of coin.
Amazon is in a difficult position. If their response to being informed was, instead, to re-issue the IRS form with a declaration that the account owner did NOT receive the money as income, then they have instead invented a way for people to dodge taxes by fraudulently claiming they are a victim of a money laundering scheme.
Also, fairly obviously, Amazon is not criminally liable because when the transactions happened they were, as far as they knew, simply selling books legally. Amazon had no criminal intent. This is the big difference.
Money laundering is also a difficult thing to deal with, since there are 'tipping off' crimes a lot of places, so you are not allowed to reveal that you are investigating.
When you forcibly enter a building with dozens of firearms, put people at gunpoint, and order them about/to the ground, that's, at minimum, approaching violence.
Comments
I find Amazon’s response to being informed about this “incident” particularly shocking.
Based on the information presented on Krebs’ blog, it should be obvious to Amazon that this is not just a case of a client dispute, but a situation involving a number of serious crimes. Considering how Amazon’s own platform facilitates these crimes, should their reluctance to assist this particular victim not open them up for a liability claims, maybe even for complicity in illegal conduct?
Taking it one step further, Amazon appears to have gained, and still gain a significant percentage from each of these transaction. In plain words: Amazon itself gained profits from criminal proceeds. It also appears to not be bothered all that much with structurally eliminating this practice. Doesn't that make Amazon itself a criminal organization, by definition?
Unless Amazon puts an immediate stop to all this, and distance itself from all profits so far made on it, why would it not be branded a criminal organization? Because they provide jobs? Because they provide innovative new business opportunities? Because they also gain profits though legal ways? Those same things can be argued for many criminal organizations, even including the Italian mafia.
Indeed. It looks like pretty cut-and-dry failure of KYC compliance. When acting as a marketplace, Amazon is a money transmitter and needs to follow KYC procedure for all sellers receiving funds. It seems like their KYC is very loose, to say the least.
Unfortunately as I age and gain experience in this industry, I've come to the conclusion rules like that do not apply to companies the size and breadth of Amazon.
They may get a slap on the wrist, but if a small company did this the principles involved would be in prison.
Perhaps a day in jail would make Bezos care. Money laundering is currently a big deal. Using Amazon to launder money is no different than selling stolen merchandise to a pawn shop.
Exactly. The pawn shop doesn't commit a crime by buying stolen goods in good faith. Neither does Amazon here.
In order to get a money transmitter license, Amazon must comply with KYC regulations, which are at best minimal protection against fraud. By failing to even meet such a minimum, Amazon may be demonstrating willful negligence.
That is why money launderers do it right? They get a cut of the money laundered, and in this case that is 30%.
When I read the Krebs article I was struck by how similar it was to the way in which World of Warcraft Gold sellers would "launder" their gold by sending it through the auction house. In that case they would have their customers put up a specific worthless item for a high fee on the AH and then one of the gold farmer accounts would come along and buy it. As a 'legit' transaction it was hard for Blizzard to catch.
No doubt this is a pretty ancient scheme, you could use a swap meet for example to launder a lot of cash this way as well. Amazon just makes it easier. Of course it would be easier still if Amazon accepted blockchain currencies. Then you could create your own mixer without any work at all. :-) That makes me wonder if there were people selling silly things on Silk Road back in the day for large amounts of coin.
Amazon is in a difficult position. If their response to being informed was, instead, to re-issue the IRS form with a declaration that the account owner did NOT receive the money as income, then they have instead invented a way for people to dodge taxes by fraudulently claiming they are a victim of a money laundering scheme.
Also, fairly obviously, Amazon is not criminally liable because when the transactions happened they were, as far as they knew, simply selling books legally. Amazon had no criminal intent. This is the big difference.
Money laundering is also a difficult thing to deal with, since there are 'tipping off' crimes a lot of places, so you are not allowed to reveal that you are investigating.
I am surprised that the IRS hasn't done a no knock raid - I am assuming they have the equivalent on Anton Piller order in the USA.
Just do it to the HQ on a day when Jeff is in the office - they will get the message
I'm pretty surprised to see multiple comments on HN calling for police violence on a large tech company/its elites.
I'm more surprised I don't disagree.
The IRS and HMRC are not the police they have more powers :-) ad simply enforcing a warrant is not violence.
When you forcibly enter a building with dozens of firearms, put people at gunpoint, and order them about/to the ground, that's, at minimum, approaching violence.