moneylaundering

Fair criticism regarding anonymity. You can disregard my comments if that is an issue, but I would prefer to engage on this topic on equal footing and put aside any claimed background, if that works for you. Can you explain what it is that you think is invalid regarding money laundering with fraud as the underlying crime? Or, if another point I made was invalid, what that was?

Yes, good faith bundling is just fine, just a business decision as far as I’m concerned, and if it reduces your chargebacks, good!

Circumvention and deception (which require clear intent, hence the emails) are the issue.

I think your complaint is fair regarding being lumped in despite a history of good citizenship, and I agree and add that the card networks were definitely a bit thoughtless during the adult crackdown in 2002. They have since offloaded most of this risk management process to specialty processors that do take good citizenship into account, rare as it is in Adult CNP. All high-risk means now is a couple thousand dollar startup fee and quicker turnaround through chargeback/fraud remediation programs.

Also, banks aren’t limited by anyone to a certain percentage of high risk merchant accounts currently, I am not sure if they had that limitation 10 years ago. There are certain banks, that I have interviewed extensively for my cases, that almost exclusively process cards for high-risk accounts.

Your assertion regarding adult CNP risk is incorrect, they do in fact have much higher levels of fraud and chargebacks. The card networks came down on this category because of chargebacks, not because porn is bad.

I would also point out Adult CNP is far from the only category to get this treatment, but they are one of the only high risk categories that have four major banks more than happy to take their business. Travel sites, dating sites, and other high risk CNP merchants don’t have the same benefit.

The techniques described in this article are exactly why issuers block transactions. Merchants are trying to force transactions that are likely to be charged back by engaging in increasingly elaborate, and likely illegal, schemes.

If you’re operating a legitimate adult CNP site, there are plenty of options available to you and the adult-focused processors will hold your hand through rejecting sketchy charges even if it means lower up front revenues.

I have seen bad actors open up fake porn sites to obtain processing for their illegal activities because adult processing for legitimate sites is that available.

Edit:typos

Oversimplified version of most statutes:

It has to be transferred AND (1)illegally obtained, or (2)intended for an illegal purpose, or (3)disguised and international but not in any way illegal.

He is correct. This is how I build my cases.

I would just be aware that any interaction with the financial system can quickly become criminal. Whether it does depends on a whole range of factors, but the option is always there. (Incidentally, the same goes for insurance companies. Can go criminal at any time.)

The elements for federal and state money laundering charges would be there. Lying to a bank, in a tri-partite merchant account agreement, email, or phone call, and then obtaining services from that bank, can come down on you as bank fraud, wire fraud, or mail fraud. Once you’re buttoned up on fraud, subsequent transfers of funds can be charged as money laundering. This is true for most states and under federal law.

In a hypothetical scenario where I saw this occurring, I would look for emails, texts, etc where you admit that you actually intend to sell memberships, and the T-shirt sales are merely to obtain payment processing services to get the fraud charges up.

Then I’d rack up the dollar amounts against you under money laundering statutes and stack them so you’d be looking at some pretty major prison time.

All this over selling some T-shirts to get a payment processor for your adult site? You bet! I’m working on very similar cases now.

I work on money laundering cases. What the poster admitted to doing, particularly in the comments section, reads like money laundering. I have used emails more vague than this write-up against defendants in money laundering cases. The underlying crime would be bank fraud, wire fraud, or mail fraud, or all three, depending on how a particular merchant account was opened, how transactions were processed, and who the parties to a contract are (if a financial institution, then bank fraud, and so on).