iByte

e-Gold, an internet money and payment service, has found itself in legal trouble in the United States after being charged with conspiracy to engage in money laundering and conspiracy to operate a money-transmitting business without a license.

As well as the companies being charged, key members of the exective side were also charged with felonies including the CEO of e-Gold, Douglas Jackson as well as Barry Downey and Reid Jackson, two other key directors for the service.

Douglas Jackson faces a prison term of 20 years with a fine of half a million dollars on the money laundering charge and a sentence of five years and a fine of $250,000 on the operation of an unlicense money transmitting business charge.

The two companies could face a fine upwards of $3 million dollars at sentencing.

e-Gold provided digital currency services at e-gold.com and Omnipay.com where users were not required to provide their true identities in order to create an account and, despite knowing that their services were being used for criminal activity, e-Gold assigned employees with no prior background in fraud and abuse prevention to monitor hundreds of thousands of user accounts.

As part of the plea bargain, e-Gold must create a comprehensive abuse and fraud detection system that verifies user identity and reports suspicious and/or fraudulent activity.